UAC of Nigeria Plc has posted its best financial performance in years, recording a remarkable profit before tax of N25.5 billion for the year ended December 31, 2024. This marks a 107% increase compared to the previous year and signifies a major milestone in the company’s transformation.
The impressive result is the culmination of years of strategic restructuring following the 2018 takeover by private equity firm Themis Capital. At the time, UAC was struggling with operational inefficiencies, declining revenues, and mounting losses. Fast forward six years, and the company appears to be back on track, with several key business units driving profitability.
Restructuring Pays Off
Since the leadership change, UAC has been streamlined into a more focused, performance-oriented business. The company divested from underperforming assets, reoriented its efforts towards core consumer goods, and cultivated a culture of accountability and operational efficiency.
Group Managing Director Fola Aiyesimoju attributes this success to the hard work and dedication of UAC’s leadership and staff. “We aggressively pursued new markets, introduced new products, and focused on cost control, pricing, and risk management,” Aiyesimoju noted.
Impressive Financial Growth
UAC’s revenue for 2024 surged by 63.4% year-on-year to N197.9 billion, driven by strong performances across key business segments, including food, paints, and real estate. This growth led to a near-doubling of operating profits to N18.9 billion. After-tax profit surged by 90.4%, reaching N17 billion.
Gross profit rose 117% to N46.3 billion, reflecting better pricing strategies, higher sales volumes, and improved cost efficiencies. UAC’s cash position also strengthened, with the company holding N40.6 billion in cash at the end of 2024, up 60% from the previous year.
Earnings per share rose 64%, further solidifying shareholder value.
Segment Performance
UAC’s core business segments performed strongly, with notable growth across most areas.
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Edible Foods (including Grand Cereals and Livestock Feeds) saw a 50% increase in revenue, reaching N100 billion. Profit before tax rose from N324 million in Q4 2023 to N1.8 billion in Q4 2024.
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Packaged Food and Beverages recorded a 102% revenue growth to N57.7 billion. The growth was driven by rising demand for snacks and dairy products, along with new product launches like Chin-Chin and Kingsway Loaf.
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Paints (including CAP Plc and Dulux) saw revenue rise by 52% to N36.3 billion, with profit before tax increasing by 36% to N2 billion.
However, the Quick Service Restaurants (QSR) segment, which houses the Mr. Bigg’s brand, faced challenges, with Q4 revenue declining to N2.5 billion from N3.7 billion in the same period in 2023. Despite this, the segment significantly reduced its losses through closures and cost-saving measures.
UAC also benefitted from additional income sources, such as interest on short-term bank deposits and foreign exchange gains, totaling N12.6 billion—more than double what was earned in 2023.
Dividend Announcement
Despite the record profit, UAC’s Board of Directors has decided to maintain its dividend at 22 kobo per share, the same as in 2023. The dividend is set to be paid on June 5, 2025, to shareholders registered by May 21, 2025.
While some investors may have expected a higher payout, analysts suggest that the company is prioritizing reinvestment and consolidation, especially as it looks to expand its operations in 2025.
Looking Ahead
Fola Aiyesimoju emphasized that 2025 will focus on consolidating the gains made in 2024, particularly through talent development, expanding market share, and maintaining operational efficiency. UAC’s total assets have grown to N157.7 billion, a 40% increase, while equity has risen to N66.4 billion, showcasing a stronger balance sheet.
However, challenges persist, including the continued struggles in the Quick Service Restaurants segment. Furthermore, while UAC benefited from a significant exchange gain in 2024, this may not be repeated in future years, depending on currency conditions.
Nevertheless, UAC’s transformation from a struggling conglomerate in 2018 to one of Nigeria’s most successful corporate turnarounds is a remarkable story of resilience and strategic focus.
