United Capital Plc Financial Year End 2016

The second stock out of the block after Forte Oil Plc. This one provided more hope than the earlier one and for dividend hunters a return of  13.51% on its last traded price is encouraging. find below the snap shot of the final result of 2016:

Principal Activites:

UCAP is engaged in the business on investment banking and provides issuing house, corporate investment advisory services, project finance, debt restructuring, mergers and acquisitions, debt capital markets. Through its subsidiaries, it provides additional services such as trusteeship, asset management, and securities trading.

Quarter on Quarter Performance:

2016 was a good year for UCAP in all ramification compare to the previous year. Year on year it performed better. However, our focus here is on the quarterly performance for 2016.

It started with a Q1 in terms of revenue of =N=1.8 billion followed by =N=1.7 billion in Q2, 2.0 billion in Q3 and 3.3 billion in Q4. 

While on the order hand in terms of PAT, it started with =N=1.1 billion in Q1, 2.4 billion in Q2, 1.1 billion in Q3 and 2.2 billion in Q4. 

Although the company does not show any particular pattern in terms of revenue and earnings, but it however, provides a rallying point for dividend hunters in this market where you can rarely have a return of 10% considering the current trend in the Market and the prevailing recessionary situation in the country.  In paying out 50k out of 115k earnings it shows that the company desires to increase its payment of dividend gradually. From a modest of 25k in 2014 to 35k in 2015 and now 50k in 2016. it has maintained a modest dividend growth of average 40%. This is a stock that had returned 35.53% year to date in terms of capital appreciation. 

My worry is the ability of the firm to sustained this unprecedented 169% growth in revenue from the previous year. The question now is, will the same environment play out in 2017? What is the way forward now? I know i share the view of many observers out there, but before the answers to these questions comes let us see how the Market would price the stock today, from the first trading day of its earning announcement. 

While we await the Q1 2017 result, let the Market enjoy the moment!!!