Investment Income Boosts African Prudential Revenue, As Net Profit Rises By 59%

Picture caption: From left to right, Tony Anonyai, Co-CEO & MD Strategic Advisory Services, Planet Capital Limited; Bola Ajomale, Managing Director, Nigerian Association of Security Dealers (NASD); Mrs. Oluwatoyin Sanni, Group CEO, United Capital Plc; Chief (Mrs.) Eniola Fadayomi, Chairman, Africa Prudential Plc; Babatunde Obaniyi, Director, Capital Markets, United Capital Plc; and Peter Ashade, Managing Director/CEO, Africa Prudential Plc at the Stakeholders Forum 2017 organised by Africa Prudential Plc, in Lagos on Friday, October 20, 2017.

In what is certainly an confirmation that the decision to diversify revenue stream from its traditional company registrar business was a forwarding looking and smart one, the board of African Prudential Plc, on Monday presented its un-audited result for the nine-month ended September 30, 2017, showed that while income from registrars’ fee income remained flat, investment income became the major driver of revenue, with an equally significant impact on profit before and after tax.
According to the financials, net investment income increased by 78.6%, from N902.074m in the corresponding period of last year, to N1.611bn, comprising N435.563m earned from interest on term deposit, from N420.679m and interest on treasury bills worth N1.023bn, soaring from N261.81m. Registrars’ fee income from “fixed periodic administration fees, transaction processing fees, fees for managing corporate actions, fees for professional and IT services and fees earned on the administration of client funds which is value added tax inclusive, all of which stood at N659.86m, as against the N626.274m reported in 2016; a combination of which raised turnover for the period to N2.271bn, up by N742.673m or 48.59% from N1.528bn. A significant portion or N607.922m of the N803.515m earnings for the period came in the three months between July and September.
Other income rose to N35.411m from N21.186m; impairment loss on goodwill stood at N100m, from N50.745m; just as personnel expenses rose slightly from N225.305m to N292.984m; while other operating expenses jumped to N424.667m from N315.829m.
Profit before tax rose to N1.452bn from N925.198m; just as income tax expense climbed to N144.1m from N102.658m; following which net profit rose from N822.541m to N1.308bn, an N486.083m or 59.09% increase.
Speaking at the weekend at the stakeholders forum organised by African Prudential in Lagos, Group Chief Executive of United Capital Plc, Mrs. Toyin Sanni, noted that with 60% of the revenue of registrars companies coming from deposits for dividends and related deposits driving their revenue, there is need for share registration company to think outside of the box for medium to long-term survival.
Sanni, in a keynote address titled: “leveraging Opportunities in an Evolving Capital Market, the Changing Roles of Registrars,” said the “innovate or die” challenge has become most important today, when Nigeria’s Securities & Exchange Commission (SEC) is determined to end the issuance of physical dividend warrants.
“The deadline for discontinuance of issuance of physical dividend warrants has been extended a number of times to allow for full subscription. New deadline is now December 31, 2017,” she said.
The desire to migrate towards electronic dividend payment, she said, is borne out of the need “to mitigating risks associated with physical dividend warrants and improving investors’ experience,” she added.

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