vfd group plc investor presentation · 2020-06-09 · vfd group plc investor presentation unaudited...

VFD Group Plc Investor Presentation

Unaudited Financial Results for the period ended 30 September 2019

Foresight House,

163/165 Broad Street, Marina, Lagos Island,

Lagos, Nigeria

08189989898

[email protected]

www.vfdgroup.com

mailto:[email protected]

http://www.vfdgroup.com/

2©2019 VFD Group Plc. A proprietary investment company. All rights reserved.

Content

Page

About VFD Group Plc 3

Macroeconomic Environment 4

Financial Performance 8

Financial Highlights 11

Our Sustainability Footprint 15

2019 Guidance and Strategic Focus 17

Questions 21


About VFD Group Plc

The group was incorporated in July 2009 as a

financial services focused proprietary investment

company that creates value by working within

Nigeria’s informal financial sector to create

innovative products and solutions that are

accessible to the everyday citizen and

entrepreneur. Our subsidiaries include:


Regulatory Environment

July 2019

• The Nigeria Information Technology

Development Agency (NITDA) has announced

the extension of the deadline for companies to

file their initial data protection audit report from

25 July to 25 October.

• VAT Charges on transaction in the Nigeria

Capital Market that was suspended in 2014

has been re-introduced in July 2019.

August 2019

• In a bid to grow the economy through

investment in the real sector, the Central Bank

of Nigeria (CBN) set a new Loan to Deposit

Ratio (LDR) of 65% for all DMBs who are yet

to meet the minimum (LDR) of 60% by

September 2019, which will be effective by

January 2020.

September 2019

• The Nigerian Stock Exchange (NSE) has

reviewed rules on the pricing methodology,

with effect from Friday, 11 September 2019,

the minimum trade quantity required to

change prices for equity securities traded on

the exchange will be one hundred thousand

(100,000) units for all securities group.


Macroeconomic Environment

Economic Performance

• The Nigeria Real GDP grew by 1.94% YoY in Q2

2019 from 1.50% recorded in Q2 2018. This show an

increase of 0.44% YoY.

• The external reserves fell by 7.14% to $41.85 billion

Quarter on Quarter, driven by stronger fluctuation in

oil prices and decreased in foreign portfolio inflow

during the period.

• Nigeria Domestic and Foreign Debt stood at

N25.70trn as at Q2 2019. While 32.38% of the debt

was external and 67.62% was domestic.

Stock Market

• The Nigerian Equities Market was largely bearish in the third

quarter of the year with the NSE All Share Index (ASI)

declined by 12.09% from 31,430.50 as at 31st December 2018

to 27,630.56 in 30th September 2019.

• YTD Sectoral performance were negative. Banking (-13.77%);

Insurance (-8.29%); Consumer Goods (-24.23%); Oil & Gas (-

20.81%) and Industrial Goods (-12.49%).

• Quarter on Quarter basis, the NSE ASI was down by 7.80%,

and all sectoral performance were also bearish. The

Consumer Goods sector shed the highest (-8.82%) due to

fluctuation in prices of some bellwether stocks in this sector.

Inflation

• The inflation rate increased to 11.24% in Sept 2019

from 11.22% in June 2019. which led to the first

increase in core inflation in the year 2019

• On a Month-on-Month Basis, the inflation rate

decreased to 1.04% in September 2019 lower than

1.07% recorded in June 2019

Exchange Rate

• The inflation rate increased to 11.24% in Sept 2019 from

11.22% in June 2019. which led to the first increase in core

inflation in the year 2019

• On a Month-on-Month Basis, the inflation rate decreased to

1.04% in September 2019 lower than 1.07% recorded in

June 2019


Macroeconomic Environment (cont’d)

Fixed Income

• In the T-Bill Primary market, the CBN was able to roll over the amount of bills maturing during the period under

consideration. However Stop rates closed at 11.10%, 11.75% and 13.30% for 91 days, 182 days and 364 days

respectively for the last auction in the quarter

• Also, despite high system liquidity due to maturing instruments, FAAC inflow and FPIs, the CBN was relatively less

aggressive in its mopping up activities

• The DMO successfully listed its N15bn 7 year green bond on the Nigeria Stock Exchange

• Nigeria Stock Exchange approved the listing of N16.5bn corporate bond of Primero Transport Services Limited.


Financial Performance

Continuous Growth in Revenue

The Gross Earnings rose significantly by 144% from

N1.43 billion to N3.48 billion on a year on year basis

(yoy) in Q3 2019 due to the significant growth in:

• Interest Income by 199% yoy to N1.55 billion

• 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.

Robust Q3 2019 PAT

The Profit After tax (PAT) grew by 415% yoy to N1.75 billion, with

the annualised PAT Margin of 50% in Q3 2019 from 25% in FY

2018.

The growth in the PAT was driven by efficient balance sheet

Management, improved treasury management, increased income

generating activity and effective deployment of cost optimisation

strategy across the Group.

Balance Sheet Management

The Total Asset grew by 93.06% 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 returns with the

annualized Return on Asset and Return on Equity at 7%

and 43% in Q3 2019 from 3% and 36% in FY 2018.

Competitive Margin

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


Ratio Analysis


Financial Highlights

In N'million Q3 2019 Q3 2018 % Change

Gross Earnings 3,483 1,426 144%

Interest Income 1,553 519 199%

Interest Expenses (464) (438) 6%

Net Interest Income 1,089 81 1245%

Non Interest Income 1,930 908 113%

Total Expenses (1,266) (648) 95%

Profit Before Tax 1,752 340 415%

Unaudited Income Statement Summary : YoY Change


Financial Highlights (cont’d)

In N'million Q3 2019 FY 2018 % Change

Total Asset 34,932 19,048 83%

Financial assets 17,491 11,915 47%

Investment property 582 1,842 -68%

Property and Equipment 1,253 1,054 19%

Cash and cash equivalents 2,702 1,133 138%

Restricted cash balance with CBN 10,000 0 0%

Other Assets 2,905 3,104 -6%

Total Liabilities 28,119 17,513 61%

Total Equity 6,814 1,535 344%

Statement of Financial Position Summary : YTD Change


Our Sustainability

Footprint


Our Sustainability Footprint


Key Achievement for Q3


Key Achievement for Q3

• Progress in our Regional Banking License Application – Successful deposit of

Minimum Required Capital of N10 billion

• 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

2019 Guidance Q3 2019A % of the

Guidance

Financial assets 21,498 17,491 81%

Total Asset 30,500 34,932 115%

Borrowings 16,607 12,829 77%

Total liabilities 23,815 5 0%

Total equity 6,685 6,814 102%

Total equity and liabilities 30,500 6,818 22%


Guidance

Gross Earnings 4,142 3,483 84%

Interest and similar income 1,910 1,553 81%

Interest and similar expense (482) (464) 96%

Net Interest Income 1,428 1,089 76%

Total Non-Interest Income 2,232 1,930 86%

Operating expenses (1,702) (1,266) 74%

Profit Before Tax 1,958 1,752 90%


Guidance

Net Interest Margin 28% 7% -21%

Cost of funds 4% 9% 4%

ROA 5% 7% 1%

ROE 24% 43% 19%

Key Balance Sheet Indices

Key Income Statement Indices

Key Financial Ratios


Strategic Focus for Q4 2019

• Public launch of Boardroom Apartments, the inaugural product of the hospitality

arm of our Real Estate subsidiary. It is a boutique guest house 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.

• Finalise the process of obtaining regulatory approval for banking license

• Re-evaluate the status of VFD Group Plc as a financial focused investment firm

to become a full-fledged investment firm.

• Continuous enhancement of the Asset Management subsidiary’s mutual funds


Strategic Focus for Q4 2019 (cont’d)

• Focus on investments in technology and automation for the Group and its

subsidiaries with an objective to improve efficiency and customer interaction.


Questions?


Thank You

Contact us

Investor Relations

[email protected]

+234 908 752 2477

mailto:[email protected]

vfd group plc investor presentation · 2020-06-09 · vfd group plc investor presentation unaudited...

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