Daily Independent (Lagos)
Kingsley Ighomwenghian
27 November 2008
In what may seem a confirmation of market place rumour in recent times, the board of United Bank for Africa Plc, on Thursday excited the nation's stock market further with the submission of its audited result for the year ended September 30, 2008 indicating that profits for the period grew faster than earnings.
The news that would however be of more interest to investors of the bank, however, is the directors' offer of one new bonus share for every four held, in addition to a final dividend of 75 kobo per share.
Only shareholders whose names appear on the register of members between December 16 and 18, are entitled to benefits, just as dividend warrants will be the first to be received in the New Year, as it will be distributed on January 8, 2009
While submitting its audited result for the half year ended March 31, 2008 on May 16, this year, the board had also recommended a twin benefit- bonus of one new share for every two held and interim dividend of 25 kobo for shareholders whose names appear in the register between June 2 and 4, 2008.
The latest offer will bring total received by directors of the bank this year to 100 kobo dividend and cumulative scrip of two for every six, which is the same as one-for-three shares.
According to the result submitted to the Nigerian Stock Exchange, gross earnings income rose by about N60.124 billion or 54.92 per cent to N169.581 billion, from previous year's N109.457 billion. Profit before tax stood at N56.815 billion, representing a rise of about N25.663 billion or 82.37 per cent, when compared with the preceding year's N31.152 billion.
After taking into account the negative extra-ordinary item of about N8.786 billion, up from N5.788 billion, PBT and after extra-ordinary item was N48.029 billion, growing by about N22.665 billion or 89.35 per cent to the corresponding level of N25.364 billion.
Profit attributable to shareholders for the period also showed a growth of about N19.384 billion or 90.40 per cent over the N21.441 billion to N40.825 billion, which translates to earnings per share of about N2.83 from the previous N1.92, just as net profit margin for the period stood at 23.6 per cent, a slight increase from the previous year's 19.58 per cent.
Reacting to the result, the bank's share price recovered 80 kobo, which was 20 kobo better than previous day's 60 kobo loss, as it closed at N16.80, moving farther from the year low of N14.60 achieved a few weeks ago as a result of the meltdown that saw so many stocks trading at almost three-year low.
The situation was however not true of flour and pasta, as well as cement packaging giant, Flour Mills of Nigeria, whose directors submitted its un-audited result for the half year showing that turnover growth was significantly more than that of profit, indicating the need for management to pay more attention to the cost of market and business expansion.
Turnover in the first half of the year ended September 30, 2008 showed sales income growing by about N30.914 billion or 61.88 per cent from N49.951 billion in the corresponding period of last year, to N80.865 billion.
PBT was however weak at N3.551 billion, growing by N522 million or 17.23 per cent from N3.029 billion, at a time when net profit improved by about N366 million or 17.2.6 per cent from N2.12 billion to N2.486 billion.
The net profit translates, therefore, to per share earnings of about N1.45, as against the previous N1.24 per share.
At the close of last financial year, the company recorded EPS of 392 kobo, out of which shareholders got a dividend of 100 kobo each. Also, at the end of the half year, management successfully converted a marginal 3.07 kobo of every Naira received in the form of sales to profit, down from the previous 4.24 kobo per Naira.
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