UAC of Nigeria Plc has reported a profit before tax of N25.828 billion for the year ended December 31, 2024, representing 109.30% year-over-year (YoY) growth from the previous year.
The unaudited Group financial statements, reviewed by Nairametrics, show that the company’s revenue surged by 63.96% YoY to N197.614 billion.
The significant revenue increase was primarily driven by:
- 54% increase in edibles and feed
- 52% increase in paints
- 102% increase in packaged foods and beverages
Key highlights (2024 vs 2023 FY)
- Revenue: N197.614 billion +63.96% YoY
- Cost of sales: N151.318 billion +52.52% YoY
- Gross profit: N46.295 billion +117.16% YoY
- Sales and marketing expenses: N11.456 billion +30.26% YoY
- Gen & Admin expenses: N18.807 billion +64.41% YoY
- Operating profit: N18.642 billion +105.02% YoY
- Finance cost: N6.884 billion +93.49% YoY
- Profit after tax: N16.964 billion +90.43% YoY
- Earnings per share: N5.15 +64.01% YoY
- Cash and Cash Equivalents: N40.320 billion +59.56% YoY
- Total Assets: N156.821 billion +39.59% YoY
- Total Equity: N66.454 billion +24.96% YoY
CEO’s comment on performance
Commenting on the results, Group Managing Director, Fola Aiyesimoju, stated:
“We delivered a strong performance in 2024. We achieved revenue of N198bn and profit before tax of N25bn, reflecting growth of 64% and 109% respectively compared to 2023.
“This outcome was on account of the hard work, skill and dedication of leaders across the Group and their teams. At UAC, people are at the heart of our strategy, and I thank my colleagues for the effort that went into generating these results.
“Meaningful improvements in growth and profitability were recorded across our core operating segments. Specific initiatives include aggressively pursuing new markets with products offering value to the consumer, rigorous focus on pricing and margin and careful risk management regarding interest rates and foreign exchange.”
Investor insights & key takeaways
UACN delivered strong profitability metrics, with net profit rising by 90.43% and EPS surging by 64.01%, reflecting significant growth in earnings and higher value creation for shareholders.
This growth was supported by substantial margin improvements, showcasing enhanced cost efficiency and operational strength:
- Gross profit margin increased to 23.43% (from 18% in 2023).
- Operating profit margin rose to 9.43% (from 7.54%).
- The pre-tax profit margin climbed to 13% (from 10.24%).
- Net profit margin improved to 8.54% (from 7.39%).
Additionally, liquidity and cash flow have seen a major improvement. Net cash flow from operating activities surged to N6.478 billion, marking a notable turnaround from the negative N3.033 billion in 2023. This improvement enhances UACN’s financial flexibility, supporting growth investments and expansion.
The current ratio improving to 1.45 from 1.21 further aligns with stronger operational cash flow, confirming that UACN has sufficient short-term assets to cover its liabilities and sustain its financial momentum.
Balance sheet strength
UACN’s balance sheet has significantly improved, with higher liquidity, a stronger asset base, and increased shareholder equity.
- The 59.56% rise in cash and cash equivalents enhances financial flexibility, while the 39.59% growth in total assets reflects expansion and improved operational strength. Additionally, the 24.96% increase in total equity signals a healthier financial position for shareholders.
- However, the increase in leverage presents a key concern. Debt-to-equity rose to 63% from 52% in 2023, meaning the company is relying more on borrowed funds to drive growth.
- While this has helped elevate return on equity (ROE) to 27% from 17%, the cost of debt exceeds the return on assets (ROA) of 10.82%, which could pressure profitability in the long run.
The stronger balance sheet and rising ROE are positives, but the higher reliance on debt raises risks, especially if borrowing costs continue to rise. Managing leverage effectively will be crucial to sustaining profitability and avoiding financial strain in the future.
Market performance & investor outlook
The strong financial performance appears to be priced in the stock. In 2024, the share price recorded a 145% YtD return, and the momentum has continued into 2025, with a YtD gain of 14.6% as close of trading on February 6, 2025, indicating sustained investor confidence.
Outlook and Investor Considerations
- Looking ahead to 2025, UACN plans to continue focusing on attracting, developing, retaining, and incentivizing high-quality talent to deliver value to its customers.
- Also, the company plans to prioritize profitable growth, scale, and simplicity to create shareholder value.
- While the financial fundamentals are strong, the rising leverage and cost of debt are areas to monitor. Effective management of these factors will be key to maintaining profitability and sustaining the growth trajectory.
