UACN approves N7.1bn return on investment to shareholders

THE board of the UACN has approved a sum of N7.1 billion in capital returns to shareholders for the financial year ended December 2020.

This sum represents a mix of dividends and REIT units totalling N2.47 per share or a 28.3 per cent return at current market values.

Speaking on  the results and corporate actions of the company, the Group Managing Director, Fola Aiyesimoju, said UAC’s objective was to generate attractive long-term, risk-adjusted returns for our shareholders.

“I am delighted that the Board approved N7.1 billion in capital returns to shareholders via a mix of dividends and REIT units totalling N2.47 per share or a 28.3 per cent  return at current market values.

“Over the last 12 months, we faced a recession, civil unrest, and significant changes to the way we work due to the COVID-19 pandemic. In spite of these headwinds, we executed our key priorities, implemented initiatives relating to UPDC, strengthened management, and returned the Group to profitability,” he said.

He noted that as part of the partial exit from UPDC, we received N6.6 billion net cash proceeds and 649 million UPDC REIT units valued at N3.6 billion.

“I am excited that we are unlocking value for our shareholders via a special dividend, as well as, the unbundling of UPDC REIT units which, if approved by regulators, shareholders and sanctioned by the court, will see UAC’s shareholders become direct holders of units in UPDC REIT.

Going forward, our focus remains on creating shareholder value and we continue to prioritise growth, scale, and simplicity to achieve this. We will explore acquisitions as an avenue to accelerate growth,” UACN GMD said.

According to the financial results for the year, UACN’s revenue grew by three per cent as against that of FY 2019, despite COVID-19 related disruptions.

Gross margin of 134 bps was recorded, lower due to limited sales during the Q2 2020 restrictions to the movement of people and goods, as well as, higher input costs.

Underlying operating profit reduced by 26 per cent to N3.6 billion, largely on account of the Paints segment, while total profit for the period was N3.9 billion, a reversal from the N9.3 billion loss reported in FY 2019.

Earnings per share of UACN was 92 kobo, up from negative 183 kobo in FY 2019, while a total dividend of 120 kobo per share was recorded, comprising of an ordinary dividend of 65 kobo and a special dividend of 55 kobo per share. This translates to a dividend yield of 13.8 per cent.

The company received N6.6 billion cash proceeds and 649,392,661 UPDC Real Estate Investment Trust (“UPDC REIT”) units valued at N3.6 billion, a proceed from the partial exit from UACN Property Development Company PLC (“UPDC”).

The company divested an eight per cent stake in MDS Logistics Limited (“MDS Logistics”) to joint venture partner, Imperial Logistics. This reduced UAC’s ownership from 51 per cent to 43 per cent.

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