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For SET Plc, failure in lottery shifts focus to online gaming

Nigeria’s gaming industry has continued to thrive, thanks to Nigerians’ love for sports.

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Gaming

Secure Electronic Technology Plc, also known as SET Plc, initially started out as a gaming/lottery company. It has since diversified, yet online gaming remains of its main focus. 

It is a well-known fact that Nigeria has many sports lovers. For many years, millions of citizens have demonstrated their undying love and insatiable demand for all kinds of sports/games. As a result, the country’s gaming industry has continued to thrive, with many companies springing up ever so often to take advantage of the opportunities that abound.

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One of such companies is Secure Electronic Technology Plc, which today claims to be the foremost and leading provider of online gaming experience in Nigeria. For over a decade, this company has grown and expanded, changed its corporate identity (albeit for good reasons), and floated its equities on the Nigerian Stock Exchange.

But how much of this company’s story do Nigerians know about? How many people are even familiar with the services it provides? And come to think of it, is SET Plc really a force to reckon with in the Nigerian gaming industry? Let’s find out together, shall we?

Secure Electronic Technology Plc: A Corporate Overview

The corporate story of SET Plc began in 2001 when it was incorporated. It then received a three-decade-long lottery license from the Nigerian Government to conduct national lotteries in the country, backed by the National Lottery Act. It was the first ever company to receive such a license in the history of Nigeria.

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Asides lottery and gaming, SET Plc has over the years gone on to explore other business opportunities; all within the ambit of technology and data management.  Today, it is involved in the vending of airtime, provision of card payment solutions, trivia promo syndication, provision of central database and information processing services, and treasury/asset management services.

Meanwhile, online gaming remains a major business venture for SET Plc; from that it provides a considerable percentage of its income. Below are some of the gaming products provided by the company:

  • 60F49: This is the company’s newest jackpot game in which lucky players could win an average of N24,000.
  • 2SURE: Playing this game successfully could guaranty you a whooping N250,000 payout
  • 50F90: Virtually all the lottery enthusiasts should be familiar with this game as it is quite a popular one.
  • BETWAZOBIA: This mobile and online 24/7 game is said to be a revolution in the industry.

Please note that all the information on how to play and win these games can be found on the company’s website.

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The company is a pioneer in the Nigerian gaming and lottery industry.

On the company’s name change and listing of stocks on the Nigerian Stock Exchange 

On December 14, 2012, SET Plc became listed on the Nigerian Stock Exchange.  This happened precisely two years after its original name National Sports Lottery Plc was changed to the current one. The company later explained in a statement that one of the reasons for the name change was to “reflect the new business model of the company which, as the name connotes, is the provision of secured electronic platform for lottery and financial and other transactions.”

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Recall that as mentioned earlier, SET Plc had by this time transcended the lottery and gaming venture, while exploring the opportunities that abounded in the country’s growing financial technology ecosystem.

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A quick look at the company’s Board of Directors

Dr Odulami Kola-Daisi serves as SET Plc’s Chief Executive Officer. He is a trained Medical Doctor, having graduated from the University of Jos in 1989 and completed his residency at the University College Hospital (UCH), Ibadan. He is also an alumnus of the prestigious Harvard University.

Instead of pursuing a career in medicine, Dr Kola-Daisi chose to become a financial service professional, working as both a banker and a stockbroker. His first banking gig was at First City Monument Bank (FCMB) and later the now-defunct Spring Bank Plc where he rose to become an Executive Director.

Note that asides his position as the Chief Executive Officer, Dr Kola-Daisi also serves as the Chairman of Payment Technology Limited, a subsidiary of SET Plc.

Mr Akin Areola is a Member of SET Plc’s board of directors, serving in the capacity of an Executive Director. He has a B.Sc. Political Science from the University of Benin, and later graduated from the same university with a Master’s in Public Administration.

He is an experienced business executive who has worked in different notable corporations, including ABEX Express, DHL International, Trans-Nationwide Express Plc, and Red Star Express.

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The company’s target market

Lagos-based SET Plc has a wide target audience. First and foremost, it targets gamers and lottery enthusiasts in Nigeria, providing the platform for them to play and win. The company also targets organisations in need of database and information processing/management. In the same vein, it targets all those in need of trivia promo syndication, providing the infrastructure and technical know-how.

Which companies are in competition with SET Plc?

While SET Plc operates in markets where endless opportunities exist, it also has to contend with other companies that pose as stiff competitors. In the area of gaming and lotto, some of its competition includes the likes of Gamsole, Kuluya, Bestman Games, SUREBET, BETNAIJA, Baba Ijebu Lotto, etc.

The company is also in competition with data management and electronic payment companies such as CHAMS Plc, Courteville Business Solutions Plc, CWG Plc, eTranzact, Cellulant, etc.

The company’s accomplishment over the years

Over the past 17 years since it was incorporated, SET Plc has recorded some interesting accomplishments. Today, it has some of the largest Point-Of-Sales (POS) machines in Nigeria and the entire Sub-Saharan region. Using this wide POS platform, the company has been able to create a convergence of gaming, electronic payments and transaction processes.

SET Plc works in partnership with the likes of Visa and Verve to provide POS services in Nigeria and elsewhere.

How the company has performed financially

By the first quarter of 2018, the company’s revenue plummeted by 11.66%, down by N6.60 billion compared to N7.47 billion year on year. The company also recorded a loss in the period under review. In the same vein, its stock has had the most difficult year yet, having fallen by 54% year to date. It ended last week on the NSE’ losers’ list, having closed at N0.23 even though it started the week with N0.29.

Emmanuel holds an MSc. in International Relations and a B.A in Philosophy & Logic, both from the University of Ibadan. He is a communications professional. As a Lead Business Analyst at Nairametrics, he focuses mostly on quoted companies, their products/services, and the economy in which they operate. Emmanuel is also experienced in the areas of corporate communication, brand communication, corporate storytelling, public relations, business research, management/strategy, etc. You may contact him via his email- emmanuel.abara@nairametrics.com.

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Companies

Nigeria’s tier-1 banks earn N18.4 billion from account maintenance charges in Q1 2020

Banks’ earnings from account maintenance charges, though low when compared to other revenue streams, still make up a significant portion of their non-interest income.

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Account Maintenance Charges

Nigeria’s tier-1 banks — comprised of First Bank, UBA, GTBank, Access Bank, and Zenith Bank (FUGAZ) — generated a total of N18.4 billion from bank maintenance charges in Q1 2020. The sum is 17.12% more than N15.6 billion that was generated by the five banks during the comparable period in 2019.

This is according to recent checks by Nairametrics Research, a breakdown of which revealed that Zenith Bank generated the most income from account maintenance fees, followed by Access Bank and then, GTBank.

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See the breakdown below.

  • Zenith Bank Plc: N5.7 billion
  • Access Bank Plc: N3.9 billion
  • Guaranty Trust Bank Plc: N3.3 billion
  • First Bank Plc: N3.1 billion
  • United Bank for Africa Plc: N2.3 billion

What you should know about account maintenance charges

Banks’ earnings from account maintenance charges, though low when compared to other revenue streams, still make up a significant portion of their non-interest income.

According to the latest directive by the Central Bank of Nigeria on bank charges, Nigerian banks are allowed to charge their customers a “negotiable” N1 per mille. What this means is that banks can charge N1 per N1000 debit transactions on current accounts. Banks’ account maintenance charges come in the form of COT (i.e., Commission on Turnover) which is a charge levied on customer withdrawals by their banks. In Nigeria, these charges are mainly applicable to current accounts.

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“Current Account Maintenance Fee (CAMF): Applicable to current accounts ONLY in respect of customer-induced debit transactions to third parties and debit transfers/lodgments to the customer’s account in another bank. Note that CAMF is not applicable to Savings Accounts,” said part of the CBN directive.

(READ THIS: You must know these terms if you want to own a bank account in Nigeria)

Customers don’t like account maintenance charges

Interestingly, a lot of Nigerian bank customers are not keen on bank maintenance charges. After all, nobody likes to get debit alerts, especially so when such is coming from their banks. Perhaps, the main reason some customers dislike bank maintenance charges is because they tend to be higher than the interest capitalised entitled to such customers. Professor Ayobami Ojebode of the Department of  Communications and Language Arts, University of Ibadan, recently complained about this, saying:

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“Dear bank, I see o! Don’t think I don’t see you! You credit me N50 interest on my savings and debit N150 for account maintenance & card fee etc! Come here, what do you really think you are doing?”

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MTN, Dangote Cement, Nestle, others top best dividend stocks in 2019

MTN Nigeria, Dangote Cement, Nestle Nigeria, Stanbic IBTC, GT bank and Zenith bank were the highest paying dividend stocks on the floor of the NSE in 2019. 

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Dividend payment is one of the very few ways available for investors to earn a constant stream of income. It is also the main reason shareholders hold unto their shares in a company. Therefore, it brings great satisfaction to investors when these companies declare dividends to their shareholders.

According to data gathered by Nairalytics, the research arm of Nairametrics, MTN Nigeria, Dangote Cement, Nestle Nigeria, Stanbic IBTC, GTBank, and Zenith bank were the highest paying dividend stocks on the floor of the Nigerian Stock Exchange in 2019.

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With a combined value of N691.23 billion, these six companies make up a diverse list that includes the telecommunication, food and beverage, industrial manufacturing, and banking sectors.

Here’s a breakdown

MTN Nigeria Communications Plc posted a total dividend per share of N7.92k (interim – N2.95k, Final – N4.97k), summing up to N161.21 billion. A dividend payment was made on May 19, 2020, to shareholders whose names appeared on the Register of Members as at April 17, 2020.

(READ MORE: Why these companies remain on NSE’s delisting radar)

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The telco giant’s revenue of N1.17 trillion in 2019 against N1.04 trillion in 2018 represents a 12.6% increase. Profit after tax (PAT) also increased significantly by 38.7% from N145.7 billion in 2018 to N202.1 billion in 2019.

MTN, MTN, Dangote Cement, Nestle, others top best dividends stock in 2019

Dangote Cement Plc declared a total dividend payout of N272.65 billion. This breaks down to every shareholder of the company earning N16 on every share held. A payment expected to be made after the company’s annual general meeting is scheduled for June 16, 2020, with a qualification date of May 25, 2020.

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It is worth noting that the cement manufacturing giant posted a profit after tax of N200.52 billion, a 48.6% decline when compared to a profit of N390.33 billion recorded  in 2018.

Nestle Nigeria Plc declared a total dividend of N70 per share to its shareholders, indicating a total payment of N55.49 billion. The leading consumer goods maker generated N284.04 billion in revenue for the year ended December 2019.

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The multinational’s profit after tax stood at N45.68 billion, a 6.22% increase compared to N43.01 billion posted in 2018.

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(READ MORE: List of Dividends announced so far in 2020 (May))

The management of Stanbic IBTC Holdings Plc proposed a total dividend per share of N3 (interim – N1 and final – N2) per ordinary share of 50 kobos each, which summed up to N31.57 billion. The interim dividends (N10.47 billion) was paid on October 3, 2019, while the final dividend of N21.01 billion is expected to be paid by June 18, 2020.

The bank’s full-year result shows that the group’s gross earnings increased by 5.2% from N222.36 billion in 2018 to N233.81 billion in 2019.

Stanbic IBTC’s profit after tax for the period  recorded a marginal increase of 0.8% to N75.04 billion compared to N74.44 billion in 2018.

Guaranty Trust Bank Plc declared a total of N82.41 billion to shareholders on March 30, 2020 as dividends for the year ended 2019. This indicates a total dividend payment of N2.8 per 50 kobo ordinary shares to shareholders. Final dividend was paid on March 30, 2020 to shareholders whose names were registered in the company’s register of members as at March 18, 2020 which was the qualification date.

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GTBank, which is Nigeria’s most capitalized bank, posted a profit after tax of N196.85 billion, showing a 6.5% increase compared to N184.71 billion recorded in the preceding year.

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Zenith Bank Plc also paid N2.8 dividends per ordinary share to its shareholders, summing up to N87.91 billion (interim – N9.42 billion, Final – N78.49 billion) for the year ended 2019. The bank posted profit after tax (PAT) of N208.84 billion in the year under review.

(READ MORE: CFOs of FUGAZ and their 3-year performance record)

The final dividends were paid to Shareholder in March 2020 whose names appeared in the Register of Members as at close of business on 9th March 2020.

What is dividend?

A dividend is a payment by a company to its shareholders, which is paid at the end of a quarter or year. Note that dividends are usually cash payments, although they can sometimes be paid out in company stock.

(READ MORE: NSE Set to Host Sustainable Capital Markets Forum to Promote Green Finance in West Africa)

What to look out for in dividend stocks

The following are what you should look out for in dividend stocks:

Payout Ratio: The dividend payout ratio is the percentage of a company’s earnings it uses in paying out dividends. This is an important metric to use when digging into dividend stocks you are considering to buy.

Dividend History: This is simple. All a potential investor needs to do is to check the track record of the company. Many of the companies mentioned above have trackable and impressive track records, including long records of paying annual and interim dividends.

Industry Strength: Here, it is better to own shares in a decent company in a great and lucrative sector than owning shares of a great firm in a tough industry.

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IMF advises banks to suspend dividend payment

However, halting dividend payments may not go down well for many retail and institutional investors, who rely on bank dividends for regular income.

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IMF discloses immediate priority , Reduce funding oil subsidy - IMF to Nigeria , IMF: 40% of African countries can't pay back their debts , Nigeria among countries that pushed Global debt to $188 trillion - IMF , Coronavirus: World Bank, IMF to support Nigeria and other member countries affected, IMF, World Bank to hold meetings via conference call over Coronavirus epidemic, IMF advises banks to suspend dividend payment

In an article published on its website, International Monetary Fund (IMF) Managing Director, Kristalina Georgieva, advised banks to halt dividend payment for now. According to her, with the expectation of a deep recession in 2020 and partial recovery in 2021, banks’ resilience will be tested. Therefore, having in place strong capital and liquidity positions to support fresh credit will be essential.

According to the article, one of the steps needed to reinforce bank buffers is retaining earnings from ongoing operations which are not insignificant.

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IMF staff calculate that the 30 global systemically important banks distributed about US$250bn in dividends and share buybacks last year.

READ MORE: State Governments: Another cycle of non-payment of salaries to begin soon

In a circular dated January 31, 2018, the Central Bank of Nigeria (CBN) stipulated new conditions for eligibility of Nigerian banks to pay dividend and the quantum of dividend to be paid out by banks who are eligible. Prior to the release of the circular, dividend payout policy for Nigerian banks had been spelt out in Section 16(1) of BOFIA 2004 (as amended) and Prudential Guidelines for DMBs of 2010. The circular provided guidelines and restrictions around divdidend payout for banks based on NPL ratio, CRR levels, and Capital Adequacy Ratio (CAR).

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However, there were no regulatory restriction on dividend payout for banks that meet the minimum capital adequacy ratio, have a CRR of “low” or “moderate” and an NPL ratio of not more than 5%. However, it is expected that the Board of such institutions will recommend payouts based on effective risk assessment and economic realities. Indeed, current economic realities demand caution.

Current economic realities mean that banks face asset quality threats, further devaluation threat which may impact capital in some cases, and lower profits which in turn affects the quantum of capital retained. Ideally, these should reflect in NPL ratio and CAR ratio and should immediately restrict banks’ ability to pay dividend. However, there is usually a time lag before these ratios begin to reflect the new economic realities. Therefore, IMF’s advise may come in handy for many banks.

(READ MORE: Software security limitations cited as major reason for Covid-19 bank rush)

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That said, halting dividend payments may not go down well for many retail and institutional investors, who rely on bank dividends for regular income. Banks like Zenith and Guaranty Trust have a good history of consistent dividend payment with attractive yields which is a major attraction for many shareholders.

IMF advises banks to suspend dividend payment

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Patricia

CSL STOCKBROKERS LIMITED CSL Stockbrokers,

Member of the Nigerian Stock Exchange,

First City Plaza, 44 Marina,

PO Box 9117,

Lagos State,

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NIGERIA.

 

 

 

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