Photo caption: Jalo-Waziri, the CEO of CSCS Plc (middle), making a point at the AGM in Lagos, with him is the chairman, Oscar Onyema (right).
Shareholders of the Central Securities Clearing System Plc (CSCS), on Friday, May 6, 2022, in Lagos unanimously approved the board’s proposal of N3.7bn in total dividend payout for the year ended December 31, 2021.
The obviously elated shareholders commended the company’s management for what they described as an incredible performance that resulted in the 83.7% payout ratio, despite the challenging operating environment, which was reflected in the lower trading activity on most exchanges in the Nigerian capital market.
According to the result laid before the meeting, CSCS diligently pursued its earnings diversification drive, leading to a growth in revenue from core operations and ancillary services by 39.2% to N6.4bn, from N4.6bn in 2020, helped by the almost quadruple income from ancillary services from N526m in 2020 financial year to N2.2bn.
Addressing the shareholders, Oscar Onyema, the company’s chairman highlight the improved earnings fundamentals at a time when “the equity market recorded one of the weakest secondary market activities in the past few years, with the average daily trade value of N3.9bn, some 10% below the trading activity recorded in 2020 financial year, explaining the tepid transaction fees.”
The performance, he added, “reinforces the capacity of the management in delivering on the Board’s vision result of diversifying the business and enhancing the value accretion prospect to shareholders in a sustainable manner. More importantly, my colleagues and I on the board of your company, are excited at the prospect for new offerings arising from strategic partnerships and new initiatives. In our oversight role, we are working with the Management to invest relevant resources towards exploring new frontiers for growth, especially as these initiatives are expected to foster retail investor penetration and broader capital market growth.”
On the outlook for the business, the Chairman noted that “typical of a pre-election year, 2022 comes with its unique macro challenges but I am optimistic on the earnings capacity and overall resilience of our business, as we hope to consolidate on the strong foundations and extract synergies opportunities with our participants and partners in sustaining the positive trajectory of the business. Hence, with the support of shareholders and other stakeholders, CSCS would continue to deliver superior performance and create wealth for shareholders.”
Also commenting, Haruna Jalo-Waziri, the Chief Executive Officer, CSCS Plc noted that the Nigerian capital market remained active through the prolonged COVID-19 crisis, reflecting the ingenuity of “participants and more importantly quick adoption of new remote access technologies.
“The collaboration of our regulator and participants has been incredible in sustaining our operational protocols and IOSCO PFMI standards,” he stressed.
“Though clearing and settlement activity waned by 10.2% due to lower participation of foreign investors in the Nigerian equity market and a host of macro challenges, we are excited at the growth in our depository assets by 6.1% to N23.0tr, reflecting new listings of securities across our multiple Exchange partners as well as issuers’ and investors’ confidence in the safety and secured accessibility of our systems.
“Despite the average inflation rate of 17.0% during the year, we sustained our cost efficiency strategy, leading to a 1.6% decline in operating expenses. Overall, we achieved N5.8bn and N4.4Bbn Profit Before Tax and Profit After Tax respectively, underpinning the resilience of the business and commitment of my colleagues and I, in delivering on our pledge to sustainably create value for shareholders and our broader ecosystem.
“It has been twenty-five years of meritorious service, as the infrastructure for the Nigerian capital market. We have pioneered a number of initiatives and efficiencies in the market and have enjoyed the best of collaborative engagements with different stakeholders. Whilst we relish our progress working with other stakeholders in transforming the Nigerian capital market, we reckon there is a long way to go in bridging the gap towards our aspiration of positioning the Nigerian capital market as the hub of securities services in Africa and one of the leading capital markets, globally.
“To this end, we have reinvigorated our strategic thrust with the development of a medium-term playbook that would enhance our capabilities in executing new initiatives towards deepening the Nigerian capital market and strengthening our business growth frontiers for the mutual prosperity of all our stakeholders,” he further assured.