How digital technology is transforming Africa Prudential’s operations
Africa Prudential Plc is a Lagos-based financial services provider and the only quoted registrar firm on the Nigerian Stock Exchange, which is into the business of creating client-company registers of shareholders.
Formerly known as UBA Registrars Limited, the financial services provider manages 83 clients, comprising more than three million shareholders. It has a share capital of two billion units.
The company’s business philosophy is predicated on Africapitalism, a system that asks private sector businesses to make investment decisions that will increase social and economic wealth.
The belief is that commercial activities led by these companies would create value for stakeholders and the economy, and foster development in the communities they operate.
The management team of the registration service provider is headed by Obong Idong, the company’s chief executive officer. Prior to his appointment as the helmsman, he was the company secretary and legal adviser of Afriland Properties Plc.
He previously served in the same position at Heir Holdings Limited, an African proprietary investment company and oversaw structuring of broad spectrum of oil & gas, real estate, agribusiness, financial services and health care portfolios of the company and its subsidiaries.
The Board of Directors is chaired Eniola Fadayomi, with Samuel Nwanze, Peter Elemelu, Peter Elemelu, Emmanuel Nnorom and Ammuna Ali as non-executive directors.
In terms of significant shareholding (at least 5 percent), International Equity Capital is the largest investor with 26 percent stake.
Shareholding analysis of the firm revealed that the company’s shareholders are mostly corporates with 67 percent interest.
Turnaround in digital technology segment
The company at its 6th Annual General Meeting disclosed plans to include digital technology and cooperative business to its services offerings in 2019, while automating the entire registrar process, its core business segment, to penetrate to viable African markets.
At the meeting, the company says it would leverage technology to change the dynamics of digital solutions in its coverage, and would use exploit technology to develop major sectors of the Nigerian economy. This push made the service provider became member of the Financial Technology Association of Nigeria.
The company reaped the benefits of these strategic actions as receipts from digital technology skyrocketed to N73.7 million in the first six month of 2019 from N457, 000 in similar period a year earlier. Breakdown of the figures revealed that N71 million was realized in second quarter of the year.
Commenting on the stellar performance, this what Obong Idong, Managing director of Africa Prudential said in a note to investors.
“In our digital technology unit, we are strategically positioning ourselves to con
tinuously deliver best-in-class experience to our clients through our array of innovative product offering”
The company unveiled plans to introduce two products in the digital technology space to deliver value to clients within and outside the capital market, saying the products have been well researched to add value to individuals and businesses.
The company’s chief expressed optimism about better performance going forward, and that the company would continue to explore diverse opportunities in the digital technology space while further deepening their footprint in registrar business.
Digital technology drives financial performance
Africa prudential kicked off the first half of the year 2019 on a good footing after the financial service company grew its net income by 4 percent to N1.02 billion, its highest profit after tax in the last seven years on the back of a 43 percent surge in its revenue all thanks to fast growth in the company’s digital technology revenue stream.
The Lagos based registration service provider saw revenue spike to N870.14 million in H1 2019 from N593.46 million in the previous corresponding year. During the period under review, proceeds from its digital technology section accelerated significantly by about 16,035 percent to N7.7 million against N457 thousand recorded in the previous year.
According to Obong Idong, the performance was one of a promise delivered to company’s investors.
However the period saw a 7 percent decline in company’s interest income as interest on loans and advances dipped 7 percent, treasury bills by 60 percent and bonds by 64 percent.
As result, total interest fell 28 percent to N1.14 billion against N1.57 billion, rendering less effective almost doubled growth of 44 percent in interest from short term deposits. The resultant effect saw the company shedding N160.59 million in gross earnings for the period when compared to H1 2018.
Over the last five years, Africa Prudential has growth at a faster rate its revenue than its net income. Analysis of the company’s annual average growth between 2014 and 2018 reveals a growth in revenue by 19 percent and 13 percent in net income respectively.
Caught between the prevalence of negative investors’ sentiment which has taken the Nigerian stock exchange market on a bearish trend causing stocks lose persistent market value, Africa prudential improved slightly its negative year to date performance to -4.39 percent.
This is thanks to investors’ positive response to the company’s financial position upon release which saw the stock price jump 8.8 percent to N3.70 from N3.40.
At the end of trading on Friday, the company stock appreciated 1.65 percent to maintain a 3-day gain streak after profit taking saw price reverse to N3.50 as at Tuesday.
Moreso, Shareholders at the 6th Annual General Meeting of Africa Prudential Plc in Lagos, lauded the financial services firm for paying 50k dividend amidst a challenging macro-economic environment in 2018.
Africa Prudential outline growth strategies going forward
In a statement by Eniola Fadayomi, the Chairman of the board of Africa Prudential Plc, she explained the company’s conscious effort to diversify its income base and insulate the company from the uncertainties and risks of depending on a single line of business income. “The company took measured steps to grow its business solutions segment,” she explained.
Obong Idiong the MD/CEO of Africa Prudential Plc informed shareholders that in furtherance of the diversification strategy of the company, to bring more and sustainable value to shareholders, the company has evolved into three main business lines; Registrars Business, Digital Technology Business and the Cooperative Business.
With a focus on providing a tech-driven financial service that aligns with the developments in the fourth industrial revolution, Africa Prudential has rolled out various products to provide seamless services to shareholders, clients and stakeholders in the market.
Going forward, Africa Prudential has intended to continue to leverage on digital transformation, product development and strategic partnership to impact the African market for the period 2019-2023.
“Beyond the current registrars products and services being offered currently, we are transiting into a cohesive and aligned data mining strategy that can ensure we become a full-fledged Technology company,” Africa prudential stated in its investor’s presentation report.
Amongst strategies to be employed by the company are,
and services being offered currently, transiting into a cohesive and aligned data mining strategy that can ensure becoming a full-fledged Technology company
Business Unit as a pivotal unit to new thinking as a Technology Company
space via the use of Enterprise Easycoop solution
Business Unit called “Easycoop Mart
through a redesigned business model been Customer handled by the Customer Fulfilment Center.
Driven by outline strategies, Africa prudential frameworks as a guide for 2019 a gross earnings of N4.8 billion, revenue from contracts to the tune of N1.6 billion, Net investment income of N3.2 billion, Operating expense of N1.9 billion, a profit margin of 40 percent, annualized ROE and ROA of 21 percent and 13 percent respectively.