CSCS shareholders approve N3.7bn dividend payout

The board of Central Securities Clearing System (CSCS) Plc has approved a total dividend of N3.7 billion for the 2021 financial year. 

In a statement issued on Friday, CSCS said the dividend was approved at the company’s 28th annual general meeting in Lagos.

According to the company, the N3.7 billion dividend translates to a 83.7 per cent payout ratio.

“Consolidating on its diligent earnings diversification drive, the company grew revenue from core operations and ancillary services by 39.2% to N6.4Billion from N4.6Billion in 2020, as it almost quadrupled earnings from ancillary services from N526 million in 2020 financial year to N2.2 Billion in 2021 financial year,” the statement reads.

“Notably, income from ancillary services contributed 33.3% and 21.5% of operating revenue and total income for the year respectively, underpinning Management’s strategy towards diversifying and strengthening the earnings fundamentals of the Company, with the ultimate objective of creating sustainable and superior wealth for shareholders and its broader stakeholders.”

Oscar Onyema, chairman, board of directors of CSCS Plc, told stakeholders that notwithstanding the volatile operating environment and moderated capital flows — as reflected in the subdued capital market activities — the earnings fundamentals of the company remained resilient and stronger than ever.

“This fact is evident in the impressive revenue growth of 39.2%, driven by stellar growth in ancillary income,” he said.

“The equity market recorded one of the weakest secondary market activities in the past few years, with the average daily trade value of N3.9billion, some 10% below the trading activity recorded in 2020 financial year, explaining the tepid transaction fees.

“Albeit income from ancillary services recorded a significant boost, contributing N2.2billion or 21.5% of total income in 2021FY, from N526million or 11.3% of total income in 2020FY.”

Onyema said the performance reinforces the management’s capacity in delivering on the board’s vision result of diversifying the business.

“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,” he added.

“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.”

Haruna Jalo-Waziri, chief executive officer, CSCS Plc, said: “Reflecting the ingenuity of our participants and more importantly quick adoption of new remote access technologies, the Nigerian capital market remained active through the prolonged COVID-19 crisis.

“The collaboration of our regulator and participants has been incredible in sustaining our operational protocols and IOSCO PFMI standards.

“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 N23.0trillion, 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.”

Jalo-Waziri said despite the average inflation rate of 17 per cent during the year, the company sustained its cost efficiency strategy, leading to a 1.6 per cent decline in operating expenses.

“Overall, we achieved N5.8Billion and N4.4Billion 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,” he added.