AFRICAN PRUDENTIAL REGISTRARS: ALSO PRUDENT?

In the financial year to December 2015, African Prudential Registrars PLC had no compelling reason in these trying times to be prudent but it tried to be any way and it paid off.
According to the figures for year sent to the stock market this week, it continued to depend on three income streams and two did fairly well.
Core income grew by 7.43% when compared to 2014 figure for the group. It closed 2015 at N919.6m which was almost double digit percentage rise on 2014:s group N856m.
The other major stream was income from investment in treasury bills, term deposits, commercial papers, bankers acceptances and bonds and it delivered a lot more to total income. Up 20.4%, the 2015 investment income was N1623.7m compared to N1349.1m for the group in 2014.
It was income from other sources outside these two that failed to deliver. It dropped by 37.5% to N32.2m as against N51.5m for the group in 2014.
In the end total income was N2575.5m up 14.1% on previous year:s group N2256.7m. Not bad in a trying period for the Nigerian economy.
So where was African Prudential prudent? Certainly not in personnel costs because this rose by 33.4% from N243.1m to N324.2m.
Yea, according to the figures, it was prudent in other operating cost management as this dropped by 21.8% to N532.3m from N680.9m.
Thus, in spite of a leap in provision for potential loss in the value of its investments from N2.98m to N52.9m, African Prudential Registrar's profit before tax for 2015 at N1629.4m was 25.3% higher than  2014:s group N1300.4m.
In other words, the company gained N63.3 on every N100 income within the year compared to N57.6 previously.
Yet, there was no reason to believe this was a flash in the pan. Core income should continue to grow gradually because it is professional in nature while the potential is there for more investment in bonds and near money to reap more.
By December 2015 it closed with N8406.4m working capital compared to N5972.9m earlier and cash on hand was N8182.1m as against N6009.7m previously.
SO
* It is good that what helped to push up personnel cost was performance bonus given to performing staff.
* However, it will help matters better if staff costs and the new surge in loss provision are watched more closely to guide against runaway tendencies.

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