Registrar firm, Africa Prudential Plc, released its 2020 half-year results which showed a revenue decline of 7% year on year. The company reported a revenue of N1.8 billion during the year, as revenue from contract with customers, one of its major business segments, recorded a revenue drop of 32% year on year.
The company blamed the weaker performance on COVID-19 which wiped out its income from retainership fees. Last year, retainership fees contributed about 61.4% of revenues from contracts with customers. Note that businesses that engage in contract of services on retainership basis have been badly affected by the pandemic, as a lack of business activities means services are cut by clients in line with business continuity initiatives.
According to the company, “during the period under review, revenue from contracts with customers contracted by 32.12% year-on-year on the back of the effect of COVID-19 on the business landscape. This led to a 100% drop in retainership fee in the first half of the year. However, the company was able to increase fees from corporate actions by 34.87%, register maintenance by 32.81% and digital consultancy by 94.33% year-on-year. Also, a quarter-on-quarter analysis shows that the company has been able to improve revenue from fees from corporate actions by 1791.87% and register maintenance by 171.39% QoQ”
Financial services firms are expected to report weaker earnings in the second quarter of the year mostly due to the economic shutdowns induced by COVID-19. Africa Prudential was affected by the spate of corporate annual general meetings being moved online via zoom in compliance with social distancing.
With clients having gotten a taste of just how efficient and reliable online tools like Zoom can be, service-based businesses like Africa Prudential may now have to seriously consider focusing more on digital-enabled services in order to remain profitable.
Meanwhile, despite the drop in the company’s revenues from contracts year on year, it did better quarter on quarter having risen 249%. Ironically, most of the N490 million in revenue from contracts came in the second quarter of the year.
The company Obong Idion also commended on the impact of Covid-19 on his company’s business.
“Our Q1 results showed the impact of the pandemic on our business, however we have been able to put in place structures to help us maximize the current business cycle. Through this structure we were able to achieve an impressive quarter-on-quarter results, increasing gross earnings by 52% and PAT by 144%. We were also able to deliver an improved result year-on year, growing interest income and PAT by 12% and 5% respectively. As the company continues to observe safety measures to ensure the safety of staff and customers, we have enhance our virtual channels to meet the needs of our various categories of customers while reducing the need for physical visits significantly.”
Digital consultancy, a growth area for the company, also surged 94% year on year. The digital consultancy business segment reported a N54 million revenue in 2019 and is expected to be the frontier for the company’s blockchain-driven software as a service business model.
Africa Prudential reported a half-year earnings per share of 54 kobo compared to 51 kobo during the same period in 2019. Africa Prudential’s stock closed today’s trading session on the Nigerian Stock Exchange with a share price of N4.12 after gaining +0.11 to increase from its N4.01.
You may download the financial statement right here.