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AN IMPRESSIVE
START:
2018
FIRST QUARTER
RESULTS
PRESENTATION TO
INVESTORS &
ANALYSTS
OUTLINE
Section Page
1. Africa Prudential Overview 02
2. Domestic Operating Environment 09
3. Financial Overview 12
4. 2018 Outlook 18
5. Appendix 21
Page|1
1AFRICA PRUDENTIAL OVERVIEW
Page|2
AFRICA PRUDENTIALFUNDAMENTAL STATISTICS
First and only registrar firm listed
on the Nigerian Stock Exchange
70Over
ClientsManages over 70 client registers,
made up of over 3 million
shareholders
First among corporate registrars
for its technological innovations
AFRIPRUD
4
NShareholders Fund of
N6.64billion, lower
by 4% YTD; largely
due to increase in
dividend paid
Africa Prudential is
strategically located
in the commercial
capital of Nigeria,
Lagos; the political
capital, Abuja; and
Port-Harcourt.
3
2
Total revenue: N1.01billion,
compared to N0.65billion in
Q1 2017 (55% YoY growth).
Profit After Tax: N0.46billion,
an impressive 22% YoY
growth compared to
Q12017
The top management of
the Company have a
track record of providing
registrar as well as allied
services to the Nigerian
Money and Capital
Markets.
Page|3
Diversified business lines
broadening revenue streams
OUR JOURNEY SO FAR…
Page|4
UBA Registrar
Department was
created in 1970
Accounts/clients
increased from 15
to 17
Asset book of over
N1.4billion with
N63.4million gross
earnings
No
computerization
(transactions were
done manually)
UBA Registrar was
incorporated in
2006
Accounts/Clients
increased from 17
to 50
Gross earnings
rose to N1.9billion
and asset book
rose to N14.1billion
Innovation and
capacity building
commenced
A
B
Asset book increased to N18billion
while gross earnings increased to
N3.3billion
Clients increased to over 70
The Company’s name changed to
Africa Prudential Registrar in 2013
Acquisition of UAC Registrars Limited
with 4 clients base
Number of shareholders increased to
over 280,000 shareholders
APR was listed in January 2013
The Company’s name changed to
Africa Prudential Plc in 2017
• Projected gross earnings of
N10billion
• Implementation of Strategic
Business Segmentation
• Total Separation of registrar
business
• Total Separation of E-Solutions
Business
• Entrance into the African market
1 321A: 1970 – 2006 & 1B: 2006 - 2012 2013 - 2017 2018 - 2025
Ph
ase
Ph
ase
Ph
ase
OUR STRATEGY
• Africa Prudential would play in three major markets which includes:
― Registrar business
― E-solution Business
― African Market
• Each business areas would be led by a “Business Lead” and would run as a separate business
Africa Prudential
Registrar Business
1
African Market
3
E-Solutions Business
2
Page|5
OUR ASPIRATIONS
Over the next 7 years, Africa Prudential is poised to be #1 in Nigeria, with an aspiration to expand into the African market,driven by technology and reinforced by a strong capital base.
Implementation of Strategic Business Segmentation
Total Separation of Registrar Business
Total Separation of E-Solutions Business
Entry Into the African Market
Market Leader with Technology And Innovation
Sustain Strong Capital Base
To Penetrate Other African
Markets
#1 In
Nigeria
Page|6
✓ First registrar portal developed in 2008
✓ Most profitable subsidiary of UBA group in 2009
✓ Engaged in debt recovery, process
review/reengineering as well as brand
resuscitation
✓ Created a Strategic Business Transformation
Department
✓ International Quality Crown Award 2013
✓ Best Top 25 CEOs Award 2013
✓ The Company was listed on the Nigerian Stock Exchange in
January 2013
✓ 1 billion share right issue (over subscribed by 125%)
✓ Commencement of Blue Ocean Strategy as well as market
focus on the Cooperative Sector
✓ Setting up the structure for business segmentation (Registrars,
E-Solution and Africa Focus)
✓ Best Profit Margin Ratio Company - PEARL Award 2015
✓ Best Corporate Governance Company in Nigeria, PEARL
Award 2015
✓ Best Registrar Firm in West Africa - 2017, Africa-Canada Trade
Alliance, West Africa Innovation and Excellence Awards
✓ Robust Internal Control mechanism and Corporate
Governance structure that support operations
✓ First registrar company
to pay e-dividend
KEY ACTIVITIES AND AWARDS
Page|7
Phase One A: (1970 - 2006) Phase One B: (2006 - 2013) Phase Two: (2013 - 2017)Phase One A: (1970 -
2005) Phase Two: (2014 - 2017)
Information Technology
• IT is the bedrock of our digital aspirations andinnovation.
• Our track record of being first in innovative products isdriven by our belief that IT is key to our survival as acompany.
Easy Access
• Our platforms can be easily accessed through variousdevices such as laptops, smartphones etc.
• Our simplified USSD code also provides easy access to ourvarious products.
DRIVEN BY TECHNOLOGY
Information Technology 01
Easy Access 02
User Friendly 03
User Friendly
• Our technology has been designed to be highly user friendlywith an interface that enables our clients to have the bestexperience.
Page|8
2OPERATING ENVIRONMENT
Page|9
OPERATING ENVIRONMENT
• The Nigerian economy finally exited recession by Q2 of 2017 after 5
consecutive quarters of contractions.
• The recovery was driven largely by growth in international crude oil
prices which traded at an all-time high of US$52.4 per barrel by close of
31st December 2017 and growth of the agricultural, manufacturing
and trade sectors.
• Inflation dropped by 282 basis points from 15.13% in January to 13.34%
in March 2018. The exchange rate also stabilized, with the Naira
exchanging for the US Dollar at an average of N360/USD.
REGULATORY ENVIRONMENT
• The Nigerian capital market witnessed gradual recovery from its
bearish trend which persisted for the first 6 months of 2017 with investors
on the Nigerian Stock Exchange(NSE) gaining around N4.3 trillion by
end of 2017 as capitalization grew by 47%.
• This was influenced by improved half year reports of some major stocks
and increased foreign portfolio investment.
• Throughout the year, there was no new public offer for subscription.
• But in a show of a positive sign of gradual recovery, towards the last
quarter of 2017, the market witnessed a respectable number of Rights
Issues which were all remarkably successful.
CAPITAL MARKETS
• The Securities and Exchange Commission (SEC) has directed the
stoppage of dividend warrant issuance effective 1st January 2018.
• Furthermore, SEC also announced the extension of free e-dividend
mandate registration window to 28th February 2018. Consequently, e-
dividend mandate enrolment after 28th February 2018 will attract a
fee.
• The Commission also hinted on plans to commence enforcement of
electronic transmission of annual reports. The pilot scheme
commenced in 2017.
• In line with the Commission’s directive on mandatory consolidation of
multiple shareholding accounts, the Commission further extended the
forbearance window for multiple accounts consolidation to 31st March
2018 to enable shareholders with such accounts in the same company
to consolidate the accounts.
• SEC has also mandated all investors to key into the Direct Cash
Settlement (DCS) initiative effective 1st September 2017. The DCS
initiative allows proceeds of shares sold to settle directly into an
investor’s account as against through the broker’s account.
THE DOMESTIC ECONOMY
Page|10
Monetary policy – Interest Rate Exchange Rate Inflation Rate
▪ At all the MPC meetings held from
January 2017 to April 2018, the MPC
decided to retain all monetary policy
instruments at their current levels; MPR at
14.0%, MPR Corridor at -500bps and
+200bps, CRR at 22.5% and Liquidity Ratio
at 30.0%.
▪ Fixed income yields moderated slightly
but remained elevated as a result of the
continued tight monetary policy
environment during the period.
▪ The introduction of the Investor and
Exporters (I&E) Window has stimulated
foreign currency inflows, and moderated
the pressure on the Naira. Whist the FX
market remains fragmented, liquidity has
improved and rates at the parallel market
and I&E Window have converged around
N360/USD.
▪ Most market participants, including
portfolio flows, payments for services,
dividend payments as well as demand for
the import of finished goods continue to
transact in the window.
▪ Headline inflation moderated for the 11th
consecutive month to 13.34% in March
2018 as it continues to ease. The inflation
rate was 15.13% in January 2018.
▪ Food inflation remains drops to 16.08%
from 18.92% in January, due partly to the
increase in security across Nigeria.
▪ Core inflation has however been
relatively subtle, reaching its lowest at
11.2% in March 2017, as improved foreign
currency liquidity moderates the rise in
non-food consumer good prices.
OPERATING ENVIRONMENT CONT’D
Page|11
3FINANCIAL OVERVIEW
Page|12
Financial Metric
(N' Billion)Q1 2018 Q1 2017 Change
Turnover 1.01 0.65 +55%
Operating Expenses (0.46) (0.25) +89%
Profit Before Taxation 0.54 0.40 +35%
Profit After Taxation 0.46 0.38 +22%
EPS (Kobo) 23 19 +21%
Total Assets 22.66 21.93 +3%
Total Liabilities 16.01 14.99 +7%
Total Equity 6.64 6.94 -4%
2018 FIRST QUARTER RESULT SNAPSHOT
Page|13
0.16 0.17
0.25
0.46
Q1 2015 Q1 2016 Q1 2017 Q1 2018
0.56
0.40
0.64
0.96
Q1 2015 Q1 2016 Q1 2017 Q1 2018
▪ Over the last 4 years (Q1), Africa Prudential grew gross earnings by
20% CAGR, leveraging on enhanced innovative offerings and
efficient management of investment activities.
▪ Net Investment Income, which contributed 77% of Gross Earnings,
reached its peak, driven largely by efficient management of
investment activities.
▪ Operational Expenses increased by 89% year on year. This was
largely due to technological advancement, business expansion,
product development and other promotional activities
Gross Earnings (N’billion) Break Down of Gross Earnings (%)
Operating Expenses (N’billion)
…INCREASING EARNINGS
Page|14
30% 37% 33%23%
70% 63% 67%77%
Q1 2015 Q1 2016 Q1 2017 Q1 2018
Professional fee Income Net Investment Income
17.7 16.8
21.93 22.66
FY 2015 FY 2016 FY 2017 Q1 2018
0.37
0.19
0.38
0.46
Q1 2015 Q1 2016 Q1 2017 Q1 2018
0.40
0.24
0.40
0.54
Q1 2015 Q1 2016 Q1 2017 Q1 2018
▪ Profit Before Tax grew 11% CAGR over the last 4 years representing
a strong momentum in terms of profitability.
▪ The Company recorded an impressive 22% year on year Profit After
Tax to N0.46billion, representing the highest profit in the 4-year
period.
▪ The Company’s Total Assets grew by 3.31% YTD, buoyed majorly by
cash and cash equivalents.
Profit Before Tax (N’billion) Profit After Tax (N’billion)
STRONG PROFITABILITY
Total Assets (N’billion)
Page|15
19
10
19
23
Q1 2015 Q1 2016 Q1 2017 Q1 2018
66%
48%
58%
46%
Q1 2015 Q1 2016 Q1 2017 Q1 2018
▪ The Return on Assets (ROA) remained stable at 2.0% YTD.
▪ Q1 2018 Return on average Equity was 7%, up 200bps YTD.
▪ Earnings Per Share also increased to 23 Kobo in Q1 2018 as a
result of the strong profitability momentum.
Return on Asset & Equity (%)
EPS (Kobo)
Profit Margin (%)
KEY RATIOS
Page|16
Not annualized
2.0%
5%
2.0%
7%
ROA ROE
FY 2017 Q1 2018
4.6 4.6
6.946.64
FY 2015 FY 2016 FY 2017 Q1 2018
13.1 12.3
14.9916.01
FY 2015 FY 2016 FY 2017 Q1 2018
▪ The company’s total assets grew by 3.31% YTD, buoyed majorly by
cash and cash equivalents.
▪ Total shareholders funds declined 4% YTD due to increase in
dividend paid.
▪ The Company’s total liability increased marginally by 6.8% YTD
representing a stable liability management
Shareholders Fund (N’billion)
BALANCE SHEET SNAPSHOT
Total Assets (N’billion)
Page|17
Total Liabilities (N’billion)
17.7 16.8
21.93 22.66
FY 2015 FY 2016 FY 2017 Q1 2018
42018 OUTLOOK & KEY TAKEAWAY
Page|18
Page|19
2018 OUTLOOK
Gross Earnings N0.96Bn1
Professional Fee Income N0.22Bn
Net Investment Income N0.73Bn
Profit Margin 46%
Return On Equity 7%
Return On Assets 2%
Operating Expense N0.46Bn
2
3
4
5
6
7
Q1 2018
Actual
2018
Guidance
55%
32%
9%
N1.4Bn
N3.8Bn
N1.3Bn
N2.3Bn
25%
17%
32%
84%
22%
22%
33%
% of
Guidance
KEY TAKEAWAY
Despite tight regulatory directives, the Company continues to post strong results with an impressive 77% of gross earnings from non-registrar fees
Strong technological capabilities, serving over 70 clients with 3 million shareholders
First and only listed Registrar firm in Nigeria with ambitions to grow into the African Market
A dedicated and experienced management team with proven track record
Page|20
5APPENDIX
Page|21
In thousands of Nigerian Naira 31-Mar-18 31-Mar-17
Registrars fee income 223,550 214,751
Net investment income 734,254 426,795
Gross earnings 957,803 641,546
Other income 47,972 6,028
Impairment loss on financial assets (24,700) (25,000)
Personnel expenses (112,443) (76,670)
Other operating expenses (112,144) (130,418)
Depreciation and amortization (18,567) (13,159)
Finance charges (186,245) -
Profit before tax 541,676 402,327
Income tax expense (80,778) (24,647)
Profit after tax 460,898 377,680
Other Comprehensive Income, net of income tax
Items that will not be reclassified subsequently to profit or loss: - -
Items that may be reclassified subsequently to profit or loss:
Fair value gain on quoted equity 43,455 -
Fair value gain/(loss) on unquoted equity - -
Other comprehensive income, net of income tax 43,455 -
Total comprehensive income 504,352 377,680
Basic earnings per share (kobo) 23 19
INCOME STATEMENT
Page|22
In thousands of Nigerian Naira 31-Mar-18 31-Mar-17
ASSETS
Cash and cash equivalents 10,586,880 9,192,490
Financial assets (Available For Sale) 4,483,898 4,440,443
Financial assets (held to maturity) 6,515,882 7,554,522
Trade and other receivables 258,564 257,107
Inventory 16,578 16,578
Other assets 391,281 72,070
Property, plant and equipment 238,018 223,683
Intangible asset 81,390 77,921
Goodwill 73,993 98,693
TOTAL ASSETS 22,656,484 21,933,507
LIABILITIES
Customers' deposits 10,355,188 10,792,264
Creditors and accruals 238,067 330,913
Taxation 287,460 224,407
Deferred tax assets 34,110 34,110
Current liabilities 10,914,825 11,381,694
Loan 5,097,821 3,612,328
TOTAL LIABILITIES 16,012,646 14,994,022
SHAREHOLDER’S EQUITY
Share capital 1,000,000 1,000,000
Share premium 624,446 624,446
Retained earnings 4,547,550 4,886,652
Other reserves 471,842 428,387
TOTAL EQUITY 6,643,838 6,939,485
TOTAL LIABILITIES AND EQUITY 22,656,484 21,933,507
STATEMENT OF FINANCIAL POSITION
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