– Rewards Investors with N2.40K Total Dividend Per Share
March 10, (THEWILL) – United Capital Plc (UCAP) has experienced a remarkable seven-year growth trajectory, culminating in an explosive surge in 2024.
The company’s Profit After Tax (PAT) more than doubled, jumping from N11.42 billion in 2023 to N24.10 billion in 2024, representing a substantial 111.03 per cent increase.
Building on a decade of consistent dividend payments, United Capital achieved a significant milestone in 2024 by introducing its inaugural interim dividend of 90 Kobo per share, showcasing its exceptional financial performance.
Additionally, United Capital executed a 2-for-1 bonus share issuance in 2024, a strategic move to increase shareholder participation. This action increased the total number of outstanding shares from 6 billion to 18 billion, adding 12 billion new shares.
This means that for each existing share, shareholders received two additional shares, bringing their total holdings to three shares for every initial share owned.
United Capital Plc continues to deliver value to its shareholders, proposing a final dividend of 50 Kobo per share for the 2024 financial year.
This brings the company’s total dividend distribution for the year to N2.40 Kobo.
United Capital demonstrates strong dividend growth. In 2024, the company distributed N14.4 billion in dividends, reflecting a substantial 44 per cent increase over the previous year’s N10.0 billion.
Looking at the long-term, United Capital’s dividend payouts have skyrocketed by 860% in the last 10 years, moving from 25 Kobo to N2.40.
United Capital’s Naira Dividend History:
03-Mar-2025 0.50
01-Aug-2024 0.90
12-Apr-2024 1.80
15-Mar-2023 1.50
09-Mar-2022 1.50
08-Mar-2021 0.70
09-Mar-2020 0.50
14-Mar-2019 0.30
09-Mar-2018 0.35
03-Mar-2017 0.50
31-Mar-2016 0.35
23-Mar-2015 0.20
22-Apr-2014 0.25
- Gross earnings rose by 82.50% due to income from loans, dividend income from securities investments, interest from placements and bonds, showcasing active trading strategy of the Company.
- Fee and commission income surged by 80.18% emanating from financial advisory fees and other fees and commissions, confirming industry leadership of the Company.
- Net trading income increased by 61.17% arising from gains from sale of financial instruments.
- Net gain on financial assets at fair value through profit and loss grew by 18.77%, reinforcing the Company’s commitment to growing its assets.
Efficiency in Cost Management:
- Total expenses dropped by 45.51%, showing the Company’s ability to manage its expenses.
- Total expenses -to-gross earnings declined significantly by 63.26% compared to 36.20% drop in 2023.
Impressive Financial Position:
- Profit before income accelerated by 73.96 per cent showing continuous increase in profitability.
- Profit for the year upsurge by a significant 111.06, delivering value to stakeholders.
Commenting on the results, the Group CEO, Peter Ashade, said, “As we proceed into the 2025 financial year, we remain committed to rewarding our shareholders while sustaining this remarkable performance. We are poised to lead the Nigerian capital market and unlock new opportunities on the African continent.”
United Capital Plc’s 2024 stella performance was born out of the bold move earlier in the year to reshape its capital structure, which analysts predicted might influence investor sentiment.
At an Extraordinary General Meeting held virtually on August 21, 2024, the company announced a bold plan to increase its share capital from N3 billion to N9 billion and issue a bonus of 12 billion new shares of 50 kobo each, while the total outstanding shares rise from 6 billion to 18 billion.
The restructuring reallocated N6 billion from the company’s retained earnings to share capital, effectively capitalizing these earnings into equity. This was predicted to likely reduce retained earnings further.
The company’s retained earnings declined by 9.7% to N28.67 billion as of June 2024, likely due to the company’s first-ever dividend paid of N0.90 per share for the first half-year of 2024.
For investors, this development brought both opportunities and considerations and required a closer examination of how this might affect the company’s profitability, future dividend distribution and financial stability.
The strategic use of retained earnings to fund the bonus issue signaled confidence in the company’s financial health. With the increase in share capital, the company not only strengthened its balance sheet but also enhanced its financial flexibility, potentially positioning itself for future growth.
Analysts then expressed concern that the increase in the number of shares also introduced the potential for earnings dilution, which could lead to a decrease in earnings per share (EPS) unless it is offset by substantial growth in profits.
The crucial question then was can United Capital sustain the level of profitability needed to mitigate the effects of the capital restructuring?
United Capital Plc had consistently increased its earnings. Over the previous five years then, pre-tax profit had increased at a compound annual growth rate (CAGR) of 37 per cent, closing 2023 with N17.3 billion.
The company’s EPS also exhibited strong growth, increasing at a CAGR of 23 per cent.
This momentum continued into the first half of 2024, with the company achieving a pre-tax profit of N9.1 billion, reflecting a 63% year-over-year (YoY) growth; surpassing its five-year CAGR.
Commenting on the Group’s first half of 2024 performance, Group CEO Mr. Peter Ashade had said: “I am pleased to inform all stakeholders that United Capital Plc closed the first half of the year on a strong note as evident in our impressive earnings growth and performance across key financial parameters.
“For the first time ever, we declared interim dividend payment of N0.90 for every 50 kobo ordinary share, and Bonus Shares of “2 for 1. This affirms our commitment to wealth creation and superior value delivery to our shareholders.
“We are assured about sustaining our performance in 2024 having kicked off the second half of the year 2024 in a robust financial position with close to N1.3trillion funds under management comprising trusts, mutual funds, and other professionally managed investments for our clients across diverse segments.
“The Group is strongly positioned to deliver on our growth objectives while remaining competitive and sustainably profitable. We will continue to prioritize activities that create and preserve value for all our stakeholders into the foreseeable future.”
While the Group CEO’s statements were considered reassuring, the company’s ability to sustain its profitability growth remained a crucial concern, which the FY 2024 results have ameliorated.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
