The management of Africa Prudential Registrars Plc is maintaining stable growth in revenue and profit for the second year after listing. Mr. Peter Ashade, managing director/chief executive officer of the company, made a two-point promise to shareholders at the time of listing the company in the Nigerian Stock Exchange in 2013. These are adding value to shareholders and maximizing their wealth.
He is on track so far in delivering high growth in profit and dividend. At the end of last year, he grew after tax profit by 63% and earned for shareholders one of the highest dividend yields generated in the equities market. The company paid out 76% of earnings per share in cash dividend for last year’s operations and recorded a dividend yield of over 10%. With a dividend of 35 kobo per share, it is ahead of International Breweries and Diamond Bank and not far from Ashakacem on dividend per share.
The good news from the share registration company has continued in the current year. Revenue is growing impressively and profit is advancing ahead of it, showing that another year of strong improvement in profit and shareholder value is to be expected at the end of 2014.
The company is maintaining high growth in profit by keeping revenue growing and slowing down operating cost to improve profit margin. There is a sustaining growth in revenue from N564 million in 2010 to N1,826 million at the end of 2013. The company is converting 55% of revenue into profit – one of the highest profit margins possible across sectors and industries in the entire group of listed companies.
Costs have moderated relative to revenue and net profit margin is up from 50% at the end of 2013 to N55% at the end of the third quarter. The company closed third quarter operations with a net profit of N828 million, which is an increase of 35.5% year-on-year. This is a stable growth from the profit figure of N213 million in the first quarter and N551 million in the second quarter. Based on the third quarter growth rate, net profit is projected at N1.22 billion for the company at full year.
The company generated a turnover of N1,505 million in the third quarter, which is an increase of 28.4% over the corresponding figure last year. Turnover is projected at N2.35 billion for the company at the end of 2014, a likely increase of 28.4% over the N1.83 billion recorded in 2013.
Management is expanding the company’s earning capacity rapidly. The investment portfolio has multiplied more than three and half times within the first nine months of the year to stand at N8.48 billion at the end of September. This comprises mainly government bonds and treasury bills held to maturity, which are not subject to earnings volatility.
The company experienced some cash flow difficulties in the third quarter due to a major drop in customer deposits as well as purchase of financial assets. It however has robust cash balances to meet a net cash decrease of N1.68 billion at the end of the third quarter. Cash and bank balances declined by 22.6% but remained adequate at N7.53 billion at the end of September.
The company earned 39 kobo per share at the end of the third quarter with a full year expectation of 61 kobo. This will be a new peak in earnings per share after a drop from 56 kobo in 2012 to 46 kobo in 2013. In terms of the full year outlook, the company is expected to rank above NAHCO and a little below Union Bank on earnings per share. The drop in earnings per share last year followed a rights issue that doubled outstanding shares to two billion.
Africa Prudential Registrars Plc: 3rd Quarter Earnings Report
|Sept 2014||Year-on-Year Growth -%||Full Year Projection Nb|
|Turnover – Nm||1,505||28.4||2,250|
|After Tax Profit – Nm||828||35.5||1,220|
|Net Profit Margin – %||55.0||–||54.2%|
|Earnings per Share – K||39||-33.9||61|
|Dividend- K ||35 Ex Div||–||–|
|NSE Closing Price 15/12/14 – N||2.80||–||–|
|Share Price Year-to-Date – %||-6.7||–||–|