UAC Announces N25bn As Profit -before tax

UAC of Nigeria Plc has staged a remarkable comeback, reporting a profit before tax of ₦25.5 billion for the year ended December 31, 2024. This represents a 107% increase from the previous year, marking a significant milestone in the company’s transformation journey. Just six years ago, UAC was struggling with declining revenues, operational inefficiencies, and mounting losses. However, following a strategic restructuring led by private equity firm Themis Capital, which took over in 2018, the company has successfully regained its footing.

The shift in leadership saw UAC transition from a sprawling, underperforming conglomerate into a leaner, and more efficient enterprise. Underperforming assets were sold, operations were streamlined, and the focus shifted to the company’s core consumer goods businesses. According to Mr. Fola Aiyesimoju, Group Managing Director, the turnaround was driven by “the hard work, skill, and dedication” of UAC’s leadership and staff. He highlighted the company’s deliberate efforts to pursue new markets, introduce innovative products, and strengthen cost control, pricing, and risk management—all of which contributed to the strong financial performance.

Across all key areas, UAC posted significant growth. Revenue surged 63.4% year-on-year to ₦197.9 billion, fueled by strong performance in food, paints, and real estate. Operating profit nearly doubled to ₦18.9 billion, while after-tax profit climbed 90.4% to ₦17 billion. The company also saw a 117% increase in gross profit, reaching ₦46.3 billion, a reflection of higher sales volumes, improved pricing, and cost efficiencies.

Each of UAC’s core business segments contributed to this success. The Edible Foods division, which includes Grand Cereals and Livestock Feeds, saw revenue jump 50% to ₦100 billion, with profit before tax rising to ₦1.8 billion from just ₦324 million in the previous year. The Packaged Food and Beverages segment, home to brands like Gala and Supreme Ice Cream, recorded a 102% increase in revenue, reaching ₦57.7 billion. The launch of new products, such as Chin-Chin, Kingsway Loaf, and yoghurt pouches, further strengthened this growth, doubling profit before tax to ₦966 million. Meanwhile, the Paints division, which includes CAP Plc and the Dulux brand, recorded ₦36.3 billion in revenue, a 52% increase, with profit before tax rising 36% to ₦2 billion.

However, not all segments thrived. The Quick Service Restaurants (QSR) division, which operates Mr. Bigg’s, continued to struggle. Revenue fell to ₦2.5 billion in Q4 2024, down from ₦3.7 billion in the same period of 2023. Despite this, the segment significantly reduced its losses through cost-cutting measures and the closure of underperforming outlets.

Beyond product sales, UAC earned ₦12.6 billion from interest income and foreign exchange gains, more than double the amount recorded in 2023. However, the company also faced rising costs, with raw material expenses surging by 55.72% to ₦133.3 billion, while personnel costs climbed 51% to ₦17.6 billion. Despite these pressures, profitability remained strong, driven by efficient cost management and improved margins.

Despite posting record profits, UAC’s Board of Directors opted to maintain the dividend at 22 kobo per share, the same as in 2023. The dividend will be paid on June 5, 2025, to shareholders registered by May 21, 2025. While some investors may have anticipated a higher payout, analysts believe the company is prioritizing reinvestment and expansion, positioning itself for sustained growth in 2025.

Looking ahead, Mr. Aiyesimoju emphasised that the company’s focus will be on consolidating its gains, expanding market share, and further strengthening operational efficiency. UAC’s total assets have grown to ₦157.7 billion, a 40% increase, while equity now stands at ₦66.4 billion, reflecting a much stronger balance sheet than in previous years. However, challenges remain. The QSR segment continues to struggle, and the decision to maintain dividends at 22 kobo per share may not sit well with some shareholders. Furthermore, ₦9.3 billion of the company’s profits came from foreign exchange gains, a factor that may not be repeated if currency conditions shift.

Nonetheless, what began as a difficult restructuring in 2018 has evolved into one of Nigeria’s most impressive corporate turnarounds. UAC’s resurgence is a testament to the power of strategic focus, operational discipline, and bold leadership, positioning the company for a new phase of sustainable growth.