Here’re what to know in VFD Group unaudited Q1’25 results

VFD Group Plc, a multi-sectoral investment Company, listed on the main board of the Nigerian Exchange (NGX) has released unaudited first-quarter (Q1) 2025 results.

Gross Earnings

The Company recorded gross earnings of N19.81 billion in Q1’2025, a 29 percent increase relative to N15.35 billion achieved in Q1’2024. The main value drivers were: Investment and similar income (94.33percent of gross earnings) increase of 48 percent to N18.69 billion (Q1 2024: N12.66 billion, 82.48 percent of gross earnings) driven majorly by incomes from interest, treasury activities, loans, advances and placements, and dividend income. Other income of N603 million constituting 3.05 percent of gross earnings (Q1 2024: N2.58 billion, 16.79 percent of gross earnings).

Share of Profit from Associates of N3.05 million constituting 0.02percent of gross earnings (Q1 2024: N112.07 million, 0.73percent of gross earnings).

Net gains on financial assets at fair value of N517 million constituting 2.61percent of gross earnings (Q1 2024: Nil).

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Net Investment Income

The Group recorded net investment income growth of 42 percent to N17.99 billion (Q1 2024: N12.66 billion), benefitting from Investment and Similar Income. This resulted in net investment income margin of 96.24 percent (9624 basis points (bps) year-on-year (y-o-y), Q1 2024: 100percent).

Operating Profit

Operating profit rose 29 percent in Q1 2025 to N13.92 billion (Q1 2024: N10.79 billion) while operating profit margin increased of 2 percent to 72.16 percent (Q1 2024: 70.80percent).

Expenses: Total expenses increased by 21 percent to N4.75 billion (Q1 2024: N3.94 billion). This was driven by personnel expenses (26.17 percent of total expenses) increase of 45.63percent to N1.24 billion (Q1 2024: N853 million, 21.66 percent of total expenses).

The personnel expenses growth was due to increase in the staff strength to meet the increased level of business activities as well as salaries review to retain the staff. Other operating expenses (63.99 percent of total expenses) increase of 22.52 percent to N3.04 billion (Q1 2024: N2.48 billion, 62.94 percent of total expenses).

The other operating expenses growth was due to significant increase in general administrative expenses incurred to drive the business growth. Depreciation and amortisation decrease of 23.03percent to N467 million, constituting 9.84 percent of total expenses (Q1 2024: N607 million, 15.41 percent of total expenses).

Profit before tax

From the foregoing, the Group recorded profit before tax growth of 35 percent to N4.12 billion (Q1 2024: N3.04 billion).

The Group recorded Profit After Tax of N3.50 billion compared with Profit After Tax in Q1 2024 of N2.62 billion, and Total Comprehensive Income for the year of N6.10 billion (Q1 2024: N2.29 billion). This resulted in basic earnings per share of N2.19/share compared with earnings per share in Q1 2024 of N1.49/share. Overall, the Group recorded return on average assets of 1.14 percent (Q1 2024: 1.09percent) and return on average equity of 5.69percent (Q1 2024: 7.17percent).

Nonso Okpala, Group Managing Director/Chief Executive Officer, VFD Group said, “This quarter’s exceptional performance underscores the enduring strength of our foundational strategy focused on building a resilient institution capable of thriving across economic landscapes. We delivered robust earnings growth, with gross earnings surging by an impressive 29percent quarter-on-quarter to n19.81 billion. This remarkable achievement was driven by a significant 48 percent increase in investment and similar income, culminating in a strong profit before tax of N4.12 billion”.

He said, “Our balance sheet reflects this upward trajectory, with total assets expanding by 22 percent to N320.63 billion and shareholders’ equity demonstrating substantial growth of 59 percent to N64.39 billion compared with Q1 2024. While these results are highly encouraging, our focus remains firmly on the future and the immense opportunities that lie ahead.

“This period also saw a strategic deepening of our portfolio discipline. Every investment is rigorously evaluated against our value driven investment criteria, and existing investments are held to the highest performance standards. Consistent with our business model, we executed strategic divestments, unlocking capital to pursue high-growth opportunities and further strengthen our financial position. Furthermore, our ecosystem strategy is gaining significant traction. Platforms like Bvndle and Splitar are creating synergistic connections across our portfolio, driving compounding value for users and partners alike. This integrated approach is a key differentiator and a powerful engine for future growth.

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“Looking forward, our commitment remains steadfast: effective capital allocation, strategic market expansion, and disciplined risk management will continue to be our guiding principles. We are deeply accountable to our shareholders, dedicated to building a consistently profitable and enduring institution,” Okpala said.

Total assets stood at N320.63 billion (Q1 2024: N261.91 billion) driven by: 28.14 percent increase in Loans and advances (10.24 percent of total assets) to N32.82 billion (Q1 2024: N25.61 billion, 9.78 percent of total assets); 39.51 percent increase in associates (2.26 percent of total assets) to N7.26 billion (Q1 2024: N5.2 billion, 1.99 percent of total assets); 175.14 percent growth in Trade and other receivables (23.45 percent of total assets) to N75.17 billion (Q1 2024: N27.32 billion, 10.43 percent of total assets); and 24.80 percent growth in investment in Real Estate (10.01 percent of total assets) to N32.09 billion (Q1 2024: N25.7 billion, 9.82 percent of total assets). Real estate remains a key part of VGF Group overall strategy. This increase was due to diversification strategy to increase investment in other portfolios such as real estate, logistics and hospitality businesses aside from financial assets.

VFD Group delivered exceptional operational performance and enhanced its market positioning. This was driven by Technology & Governance: Enhanced data-driven investment strategies for risk management; and implemented changes to the Board of Directors to refresh the Board and reinforce governance practices, and regulatory compliance.

Total liabilities rose to N256.24 billion (Q1 2024: N221.38 billion). Current liabilities, made up of funds under management, other liabilities, deposit liabilities and current tax liabilities increased to N129.15 billion (Q1 2024: N133.74 billion). Non-current liabilities which consist of borrowings and deferred tax liabilities increased to N127.09 billion (Q1 2024: N87.64 billion). Borrowings increased to N124.72 billion (Q1 2024: N86.18 billion) from bank borrowings.

Total equity increased to N64.39 billion (Q1 2024: N40.53 billion) primarily due to higher retained earnings for the period as well as right issue of N11.04b raised within the comparable period. Overall, the Group achieved a reduction in its gearing relative to the prior year, with debt-to-equity of 1.94x, (Q1 2024: 2.13x), Debt-to-assets of 0.39x (Q1 2024: 0.33x) and Assets-to-equity of 4.98x (Q1 2024: 6.46x).

VFD Group generated total cash and cash equivalents of N21.76 billion for the Q1 2025 (Q1 2024: N23.42 billion). Net cash inflows/(outflow) from operating activities amounted to N8.79 billion {Q1 2024: (N2.31 billion)}. Net cash outflow through investing activities, was N20.26 billion (Q1 2024: N20.45 billion). Net cash inflows from financing activities of N19.01 billion (Q1 2024: N24.14 billion).