Dividend at sh.1.70
UAP Holdings Limited grows revenues by 16% and pre-tax profits by 4%
Financial services group, UAP Holdings Limited, today announced the group’s gross premium revenue growth by 16 per cent to Kes 14.8 billion and a 4 per cent growth in its pre-tax profit to Kes 2.3 billion, for the financial year ending 2014, up from Kes 2.2 billion recorded over a similar period in 2013.
The improvement was supported by growth in all its subsidiaries, while Life and General insurance expanded by 57 per cent and 11 per cent respectively.
“Our long-term business grew at a faster rate of 57 per cent, compared with our short-term business which grew at 11%,” said UAP Holdings Group Managing Director, adding “The faster growth in the long-term business is in line with our strategy to diversify our earnings from general insurance.”
Total income increased by 31 per cent to Kes 16.7bn, due to strong performances by the group’s property, and insurance business. The contribution by regional businesses to total income increased from 28% to 34%.
Mr. Kiarie said the group’s investment income grew by 61 per cent to Kes 4.6 billion, following increased income from all its classes of investments. “The Group is now reaping the benefits of setting up an internal investment management business which has improved our ability to take advantage of investment deployment opportunities in the markets that we operate in.”
He highlighted increased revenue from the group’s property business which grew by 105% to Kes 1.2bn, following the completion of some of UAP’s projects in Uganda and South Sudan.
In the upcoming financial year, the group expects its property business to significantly contribute to its bottom-line with the expected completion of large scale projects in Kenya (UAP Tower) and South Sudan (UAP- Equatoria Tower) this year.
Claims and policyholder benefits payable grew by 40% to Kes 8.1 billion, due to significant growth in the long-term insurance business that resulted in increase in actuarial reserves. The company expects reserves held in the annuity and ordinary life assurance business to be profitable in the coming years, as the policies mature.
The group’s expenses increased by 34%, due to significant investment in creation of capacity at the holdings level and for growth of the company’s subsidiaries in Rwanda and Tanzania. UAP expects to reap the benefits of this investment in the coming years.
Finance costs increased due to the Kes 2 billion UAP Corporate Bond interest, and interests cost on the Uganda property development. The investment of the Corporate Bond proceeds will enable the group to achieve its ambitious growth strategy.
UAP holding’s assets grew by 27% to Kes 42 billion as a result of growth in the company’s investments and the deployment of the proceeds from its corporate bond issue.
Its liabilities increased by 36% to Kes 25 billion as a result of growth in policyholder reserves and unearned premiums. Directors of the company have recommended a first and final dividend of Kes 1.70 per share.
UAP’s key achievements over the 12 months period include turnaround of its Tanzanian subsidiary to profitability, launch of the group’s Graduate Development Program, and Launch of Unit Trust Products by UAP Investments.
In the coming financial year, the group plans to make significant investment in its IT platform for better service delivery, and enhancing its distribution channels to improve customer service. Additionally, the group continues to await regulatory approvals for the acquisition of a controlling stake of 60.66% by Old Mutual, who are set to become a strategic investor in UAP. Old Mutual is keen to drive UAP’s ambitious growth plans for the benefit of the consumer, and the attainment of the set Company objectives. The UAP – Old Mutual partnership will also create a larger Organization and thus provide opportunity for career growth and development within the enlarged group
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