By Favour Nnabugwu
Custodian Investment Plc has recorded 42 percent rise in its gross revenue which grew from N15.85 billion September 30, 2019 to N22.52 billion in the same period of 2020
The growth in revenue and profitability is attributable to an increase in financial and reinsurance assets which appreciated by 35.62 percent and 32.5 percent (Y-O-Y) respectively. An increase in investment and interest incomes were also very important in driving revenue.
The company’s Profit After Tax (PAT) of N1.5 billion in the third quarter of 2020, as against N1.37 billion posted the same period in 2019. Interest income advanced by 11.3 percent Year-on-Year.
Investment income gained 25.4 percent from N5.61 billion to N7.03 billion. Earnings per share appreciated by 50 percent from N24 to N36 for the period under view. Other investments and operating income grew by approximately N6.40 billion.
Total assets also grew by 27 percent from N118.01 billion to N149.94 billion for the period under view. Profit before tax marginally grew by 2.8 percent from N1.69 billion to N1.73 billion.
On the contrary, despite recording increased gross revenue, the net profit margin decreased over time, from 23.91 percent recorded as of Q3 2019 to 5.8 percent in Q3 2020.
Thus, indicating a probability of weak cost control mechanism or that variable values are not well controlled. The Net profit margin indicates that the company earned N0.057K in profit for every N1 it received in revenue as of Q3, 2020. This is lower compared to N0.24k for every N1 it earned in revenue in Q3, 2019.
This is evident in the higher operating expenses recorded as of Q3 2020 which is up by 97.4 percent when compared with the figures obtained in the corresponding period last year (Q3 2019).