Modupe Gbadeyanka
By Modupe Gbadeyanka
Leading pan-African financial and investment service group, United Capital Plc, has attributed the drop in the revenue generated in the 2019 fiscal year to the challenging operating environment in the period under review.
CEO of the firm, Mr Peter Ashade, while commenting on the results of the company for the year ended December 31, 2019, the decline in the interest rate last year mainly caused the lower revenue generated from the company’s investment income, which comprises income from fixed deposits and investment securities.
However, he said efforts would be made in the 2020 fiscal year to make things better, especially by executing some strategic imperatives targeted at strengthening its B2C model and scale up activities to drive growth across all subsidiaries.
In the period under review, the total revenue decreased by 7 percent year-on-year due to decline in investment income, net trading income and other income. This, according to the organisation, was caused by low economic activities in the capital and money market. However, the group was able to turn in a 3 percent year-on-year increase in fees and commission income, which effectively reduced the impact of the decline in gross earnings.
It was observed that the cost of doing business contributed to the decline in the profit before tax, while the profit after tax margin improved by 58 percent from 47 percent due to the group’s strategic tax management leading to a deferred tax liability write back in the year.
“In spite of the challenging operating environment that was experienced in 2019, United Capital Plc group has been able to consistently improve in its performance recording an increase in profit after tax and earnings per share.
“This increase was driven majorly by the growth in our net interest margin, fees and commission as well as an efficient tax management strategy,” Mr Ashade said.
He said in 2019, his team was able to secure a non-capital market license and setting-up of consumer finance business which led to the launch of the firm’s USSD platform *5077#.
He stated that in the year, United Capital emerged top 5 among peer fund managers in terms of mutual funds size; successfully repositioned its wealth management business on the path of profitability; and register a new business in Ghana in line with its pan-Africa strategy.”
Commenting further, he said, “We expect an appreciable growth in our revenue as we roll out our various strategic initiatives for the year 2020.
“Although, the revenue from investment income, which is made up of income from fixed deposit and investment securities, reduced during the year under review, as a result of the persistent decline in interest rate experienced in 2019, we recorded an impressive performance in our businesses.
“We will continue to consolidate on the key achievements recorded in the year under review in other to improve our business operations in 2020.”
“Going into the 2020 business year, our focus would be to execute our strategic imperatives targeted at strengthening our B2C model and scale up activities to drive growth across all subsidiaries, aggressively drive our AUM growth to sustainably increase annual fee income, as well as the establishment of innovative cost containment mechanisms through effective budgeting.”
Discussing the result further, he stressed that;, ‘In line with our strategy for the 2020 business year, we would continue to push further our cost-optimisation initiatives as well as implement phased automation of our business processes whilst upholding our commitment to ensuring a significant improvement in profitability trend across the group businesses, as we focus on providing exciting customer experience to our numerous client segments.”
