Quick Read: UACN Plc reported a 109% surge in pre-tax profit to N25.8 billion in 2024, driven by a 64% revenue growth to N197.6 billion. Key segments like packaged foods, edibles, and paints saw significant growth, while margins improved across the board. Despite strong performance, rising debt levels pose a risk to long-term profitability. The company plans to focus on talent development and profitable growth in 2025.
UAC of Nigeria Plc (UACN) has announced an impressive financial performance for the year ended December 31, 2024. The company’s profit before tax (PBT) soared by 109.30% year-over-year (YoY) to N25.828 billion, driven by strong revenue growth and improved operational efficiency.
Financial Highlights: A Year of Strong Growth
Revenue and Profitability
- Revenue: N197.614 billion, up 63.96% YoY
- Gross Profit: N46.295 billion, up 117.16% YoY
- Operating Profit: N18.642 billion, up 105.02% YoY
- Profit After Tax (PAT): N16.964 billion, up 90.43% YoY
- Earnings Per Share (EPS): N5.15, up 64.01% YoY
Key Drivers of Revenue Growth
The company’s revenue surge was fueled by significant growth across its core business segments:
- Edibles and Feed: 54% increase
- Paints: 52% increase
- Packaged Foods and Beverages: 102% increase
Margin Improvements
UACN achieved notable margin improvements, reflecting enhanced cost efficiency and operational strength:
- Gross Profit Margin: 23.43% (up from 18% in 2023)
- Operating Profit Margin: 9.43% (up from 7.54%)
- Pre-Tax Profit Margin: 13% (up from 10.24%)
- Net Profit Margin: 8.54% (up from 7.39%)
CEO’s Commentary on Performance
Fola Aiyesimoju, Group Managing Director of UACN, attributed the strong performance to the dedication of the company’s workforce and strategic initiatives.
“We delivered a strong performance in 2024, achieving revenue of N198 billion and profit before tax of N25 billion, 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.”
Aiyesimoju also highlighted the company’s focus on new markets, pricing strategies, and risk management as key contributors to the growth.
Balance Sheet Strength and Liquidity
UACN’s balance sheet showed significant improvement, with:
- Cash and Cash Equivalents: N40.320 billion, up 59.56% YoY
- Total Assets: N156.821 billion, up 39.59% YoY
- Total Equity: N66.454 billion, up 24.96% YoY
The company’s liquidity position also strengthened, with net cash flow from operating activities turning positive at N6.478 billion, compared to a negative N3.033 billion in 2023.
Leverage Concerns
While the balance sheet improved, UACN’s reliance on debt increased. The debt-to-equity ratio rose to 63% from 52% in 2023. Although this has boosted return on equity (ROE) to 27%, the cost of debt exceeds the return on assets (ROA) of 10.82%, which could pose risks to long-term profitability.
Market Performance and Investor Confidence
UACN’s strong financial performance has been reflected in its stock price. In 2024, the share price recorded a 145% year-to-date (YtD) return. The momentum has continued into 2025, with a YtD gain of 14.6% as of February 6, 2025, signaling sustained investor confidence.
Outlook for 2025
Looking ahead, UACN plans to focus on:
- Talent Development: Attracting, retaining, and incentivizing high-quality talent to drive innovation and customer value.
- Profitable Growth: Prioritizing scalable and simplified operations to enhance shareholder value.
- Debt Management: Addressing rising leverage to ensure sustainable profitability.
Key Takeaways for Investors
- UACN’s 2024 performance underscores its ability to deliver strong revenue and profit growth.
- Margin improvements and liquidity gains highlight operational efficiency and financial flexibility.
- Rising leverage remains a concern, and effective debt management will be critical for sustaining growth.
- The company’s strategic focus on talent and profitable growth positions it well for future success.
Investors should monitor UACN’s ability to balance growth with financial discipline, particularly in managing debt levels, as the company continues its upward trajectory in 2025.
