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United Capital’s gross earnings spike on increased investment income

United Capital Plc, an investment group in Africa, has defiled all odds to record an uptick in total revenue amid a volatile and tough operating environment, thanks to increased investment income.

The impressive performance was driven by the investment house’s growing market share, efficient execution of key mandates, effective cost control measures, and improved operations and IT capacity.

For the first six months through June 2017, United Capital’s gross earnings increased by 5.73 percent to N3.87 billion as against N3.66 billion recorded in June 2016.

The growth in total revenue was underpinned by 16.86 percent increase in investment income to N2.10 billion.

A breakdown of investment income showed that investment securities was up 14.75 percent to N1.40 billion as fixed income deposits rose by 23.61 percent to N608.87 million.

Despite the macroeconomic challenges that tipped Nigeria to its first recession in 25 years, United Capital’s profit before tax dropped by just 3.38 percent to N2 billion in the period under review, from N2.07 billion the previous year.

The company was cost efficient as operating expenses for the period under review rose to N809.25 million as against N518.29 million as June 2016.

Nigeria’s output contracted by 0.52 percent in 2016 and inflation in the economy stood at 16.25 percent, according to a report by the National Bureau of Statistics (NBS).

The manufacturing, banking, telecoms, airline, oil and gas, insurance and agric sector have been grappling with a severe dollar scarcity that shrunk cash flows.

Foreign portfolio investors jettisoned naira assets because of an unstable monetary policy as the Central Bank imposed capital controls, banning 41 items from the official window.

However, there is light at the end of the tunnel for United Capital as the new foreign exchange window introduced by the apex bank has boosted liquidity in the foreign exchange market.

The aim of the new policy is to attract foreign funds, alleviate the adverse impact of dollar shortages, and revise the lull experienced in the capital market due to an economic downturn.

The Nigerian Stock Exchange (NSE) main index for equities has gained 24.41 percent this year. This was driven by bank stocks as data from the country’s bourse showed that the NSE banking index has gained 48.43 percent this year.

United Capital’s total assets were valued at N149.15 billion as at June 2017; shareholders’ fund was N14.62 billion.

According to a statement by United Capital, the company remained committed to providing finance solutions for domestic and international investors with a keen understanding that its business model must evolve to complement clients’ financial objectives.

“While the challenges in the market may have proved disruptive to various aspects of the economy, it has also opened an avenue for the development of innovative investment banking products/solutions for United Capital,” the statement said.

The post United Capital’s gross earnings spike on increased investment income appeared first on BusinessDay : News you can trust.

This post was syndicated from BusinessDay : News you can trust. Click here to read the full text on the original website.

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