Africa Prudential’s consistent earnings growths lift stock
by BALA AUGIE
November 9, 2017 | 2:00 am| | | Start Conversation
Success they say is the precious truth. One of the best measures of a company performance is the appreciation in share price.
The aim and objective of a board of directors and management of a firm is to maximize the value of stocks to the benefit of shareholders.
African Prudential Nigeria Plc, the largest Registrar in West Africa, falls into the category of firms that have been pouring wine from the flagon, into the golden goblets of its owners.
The company just released its third quarter financial results that showed improved margins and profits, the delight of every investor.
African Prudential’s shares have gained 23.93 percent since the start of the year to while market capitalization stood at N7.56 billion as at September 11, 2017. Shares price was up 1.83 percent to close at N3.83 as of 2:00 pm same day.
The Registrar’s profit margin, a measure of efficiency, increased to 57.20 percent in the period under review from 54.20 percent the previous year.
Also, management is using the resources of the company well as return on equity (ROE) increased to 24.48 percent in September 2017 from 18.22 percent the previous year.
Little wonder Africa Prudential was named the Best Registrar Firm in West Africa, by the Africa-Canada Trade Alliance, at the 7th Edition of at the 7th Edition of the West Africa Innovation and Excellence Awards ceremony, which held in Abuja recently.
The Registrar had previously won several awards, including International Quality Crown Award, London 2013; Top 25 CEOs Award, BusinessDay 2014; Best Profit Margin Ratio and Best Corporate Governance Awards, Pearl Awards 2015.
For the first nine months through September 2017, Africa Prudential’s net income upsurge by 58.04 percent to N1.30 billion in the period under review from N822.54 million as at September 2016.
Revenue increased by 48.38 percent to N2.30 billion in the period under review, thanks to an uptick in interest income on treasury bills. Interest income on treasury bills spiked by 74.33 percent to N1.02 billion as the company continues to grow top lines (revenue) with a view to bolstering performance.
Stakeholders and industry players say Registrars operating in the country could lose 60 percent of their revenue to technological trends and a flurry of government regulations.
This is because deposit for dividend and related deposit have so far driven more than half of revenue of operators.
Registrars operating in Africa’s most populous nation and largest oil producer have to be more innovative and look inward and develop more market penetrating products as Securities and Exchange Commission (SEC), aims to end the issuance of physical warrant with a view to a mitigating risk associated with a physical dividend.
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.
The Nigerian Stock Exchange (NSE) reports that about 73 percent of share certificates in the Nigerian capital market have been dematerialized. The target is 98 percent.
Hitherto, certificates were issued to investors as evidence of their investment in companies. The old system was exposed to theft, risk of loss and delay in verification of certificates
To address these issues, certificates are now to be issued in an electronic form domiciled directly with the CSCS.
The gradual dematerialization resulted in improved customer experience, the velocity of trading, and the security of shareholding and turnaround timelines for settlement of trades.
Big Read |