VFD Group held its third investors’ conference call that drew interest from several local investors and financial analysts as the company’s third-quarter (Q3) result provided a unique platform for the financial institution to reinforce investors’ confidence.
Key points of its presentation
- Profit before tax (PBT) grew by 415% year-on-year (yoy) from N34 million, 25% in full-year (FY) 2018 to N1.75 billion, with the annualized PBT Margin of 50% in Q3 2019. The growth in the PBT was driven by efficient balance sheet Management, improved treasury management, increased income-generating activity and effective deployment of cost optimization strategy across the Group.
- The Total Asset grew by 83% YTD due to growth seen on cash and cash equivalent. The total cash and cash equivalent rose from N1.13 billion in FY 2018 to N2.70 billion in Q3 2019, a 138% growth rate.
- The Group maintained an impressive return with the annualized Return on Asset and Return on Equity at 7% and 43% in Q3 2019 from 3% and 36% in FY 2018.
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The Gross Earnings rose significantly by 144% from N1.43 billion to N3.48 billion on yoy in Q3 2019 due to the significant growth in:
- Interest Income by 199% yoy to N1.55 billion and Non-Interest Income by 113% yoy to N1.93 billion. The 199% growth in Interest Income stemmed from the surge in revenue from loan & advances, interest on treasury bills and Placement.
- Net Interest Margin rose by 400bps from 3% in FY 2018 to 7% in Q3 2019 due to increase seen in net interest income. Sound treasury management impacted positively on asset quality as the Earnings Yield rose from 8% in FY 2018 to 10% in Q3 2019
- Funding Cost dropped to 9% due to significant growth in Earning Asset within the period under review.
- Its Gross Earnings grew from N1.42 billion in Q3 2018 to N3.48 billion in Q3, 2019, which represents 144%.
Q3 Achievements
- Successful Launch of Anchoria AM’s Mutual Funds with oversubscription rate of 105% recorded.
- The Money Market Fund recorded a subscription of 103% with a total fund raise of N1.026 billion.
- The Equity Fund recorded a subscription of 105% with a total fund raise of N525.06 million.
- The Fixed Income Fund recorded a subscription of 111% with a total fund raise of N696.18 million.
2019 Guidance
- It plans to grow financial assets from N17.49billion in Q3 to N21.49 billion by FY 19.
- Gross Earnings from N3.48 billion to N4.14 billion within same period.
- Profit Before Tax (PBT) from N1.75 billion to N1.95 billion.
Strategic Outlook for Q4 2019
- Public launch of Boardroom Apartments, the inaugural product of the hospitality arm of our Real Estate subsidiary. It is a boutique hotel located in Lekki and has been designed to host both corporate and individual guests.
- Finalize the investment in already identified OFI (Other Financial Institution) to achieve the objective of gaining a foothold in every sector of the financial services industry.
- Complete the acquisition of an identified brokerage firm also in fulfilment of the objective stated above.
- Re-evaluate the status of VFD Group Plc as a financial focused investment firm to become a full-fledged investment firm.
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Continuous enhancement of the Asset Management subsidiary’s mutual funds
- Focus on investments in technology and automation for the Group and its subsidiaries with an objective to improve efficiency and customer interaction.
Assuring investors and stakeholders of brighter future, the Chief Executive Officer (C.E.O), Nonso Okpala, explained that the management is optimistic that the figures of the financial firm in FY 2019 will be better than the FY 2018 and Q3’19.
