United Capital Plc continues to present an intriguing story on the NGX. This stock has been relatively bearish in market valuation yet remains remarkably bullish in terms of financial performance.
Over the past five years (2020–2024), the company has delivered a compound annual growth rate (CAGR) of 63% in profit, accumulating N56.43 billion.
Its 2024 performance alone saw profit growth of over 111%, and the momentum has carried into 2025.
- For the first half of this year, United Capital posted a 54% year-on-year rise in profit after tax to N11.9 billion, while earnings per share (EPS) climbed 53.5% YoY.
- Gross earnings surged 57% to N23.76 billion, with fees and commission income driving over 64% of the top line in Q2.
- Operating profit rose to N6.5 billion, supported by both strong revenue growth and a more contained expense profile.
Group CEO, Peter Ashade, summed it up: “United Capital Plc ended the first half of the year on a strong and positive note, continuing our track record of excellence and strong financial performance… despite the prevailing macroeconomic challenges and market volatility.”
Yet, the stock price tells a different story.
- United Capital began the year at N20.40 per share but has since lost 8.33% of that value, ranking it 137th on the NGX in year-to-date performance.
- In 2024, the share price also declined by 11%.
- Even though the stock has delivered a remarkable run over the longer term, rising from just N0.80 in 2020 to N20.40 in 2024, its recent trajectory reflects muted sentiment.
The contrast between stellar financials and a cautious market raises the question of whether the market is undervaluing United Capital’s growth story or if investors are simply taking a wait-and-see approach.
What is valuation saying?
United Capital trades at a price-to-earnings (P/E) ratio of 11.91x, with a market capitalization of N337 billion compared to net assets of N166.9 billion and total assets of N1.586 trillion.
Its price-to-sales (P/S) ratio stands at 1.40x.
When set against its historical profit growth, a five-year CAGR of 63% and a 53% year-on-year rise in H1 2025, the stock’s PEG ratio falls between 0.19 and 0.22, well below the benchmark of 1.
This suggests that United Capital may be significantly undervalued relative to its earnings growth potential.
The question now is whether the market will eventually recognize this growth trajectory and re-rate the stock accordingly or continue to overlook one of the NGX’s most consistent profit stories.
On the balance sheet, the rise in managed funds to N923 billion from N847 billion shows UCAP is still winning investor trust, which is the lifeblood of its business.
On the flip side, cash flow tells a different story.
UCAP reported a negative operating cash flow of N119 billion in H1 2025, largely from a working capital deficit.
For a business built around fund mobilization, that kind of swing can make investors nervous, even when profits are strong.
Meanwhile, shareholders are not left out; the group paid an interim dividend of N0.30 per share for H1 2025, representing a 45% payout ratio.
It’s a healthy signal of commitment to investors, though whether it’s enough to offset concerns around liquidity and market sentiment is another matter.
Overall, United Capital Plc is showing investors a curious disconnect; profits are surging, valuations look attractive, but the share price remains subdued.
