United Capital Plc: Profits Surge, But Market Sentiment Lags Behind

Strong H1 2025 Results Amid Economic Headwinds

For the first half of 2025, United Capital posted a 54% year-on-year (YoY) increase in profit after tax to ₦11.9 billion, while earnings per share (EPS) grew 53.5% YoY.
Gross earnings surged 57% to ₦23.76 billion, driven largely by a robust performance in fees and commission income, which contributed over 64% of Q2 revenue.

Operating profit also climbed to ₦6.5 billion, supported by strong topline growth and more contained expenses.

Group Chief Executive Officer, Peter Ashade, praised the company’s performance, saying:

“United Capital Plc ended the first half of the year on a strong and positive note, continuing our track record of excellence and strong financial performance despite prevailing macroeconomic challenges and market volatility.”

The Market Disconnect

Despite these strong fundamentals, United Capital’s stock price tells a different story.

The share opened 2025 at ₦20.40 per share but has since fallen 8.33%, ranking it 137th on the NGX in year-to-date performance. In 2024, the stock also declined by 11%.

This comes despite a remarkable longer-term performance: United Capital shares have risen from ₦0.80 in 2020 to ₦20.40 in 2024, representing a more than 2,400% increase over five years.

The current divergence between financial performance and market sentiment raises a key question — is the market undervaluing United Capital’s growth potential, or are investors simply taking a cautious stance amid liquidity concerns?

Valuation Metrics Hint at Undervaluation

On paper, United Capital looks inexpensive. The stock trades at a price-to-earnings (P/E) ratio of 11.91x, with a market capitalization of ₦337 billion against net assets of ₦166.9 billion and total assets of ₦1.586 trillion.

Its price-to-sales (P/S) ratio stands at 1.40x.

When matched against its historical growth rate — a 63% five-year profit CAGR and 53% YoY profit rise in H1 2025 — the PEG ratio (price-to-earnings-to-growth) falls between 0.19 and 0.22, well below the fair benchmark of 1.

This typically signals that United Capital may be significantly undervalued relative to its earnings growth prospects.

Cash Flow Pressure and Liquidity Questions

While the income statement paints a bullish picture, the cash flow side tells a more cautious one.

The company reported a negative operating cash flow of ₦119 billion in H1 2025, primarily due to a working capital deficit.

For an institution built around fund mobilisation and investment management, such a swing could make investors uneasy — even amid strong profitability.

Still, the group’s managed funds increased to ₦923 billion, up from ₦847 billion, suggesting it continues to command investor trust — the core of its business model.

Shareholder Value and Dividend Commitment

United Capital declared an interim dividend of ₦0.30 per share for H1 2025, translating to a 45% payout ratio.

This underscores management’s confidence in the company’s financial strength and its commitment to rewarding shareholders, even as market sentiment remains tepid.

Looking Ahead

United Capital Plc’s story highlights a curious market disconnect: profits are soaring, valuation metrics suggest attractiveness, but investor enthusiasm remains muted.

Whether this reflects broader market caution or a temporary mispricing remains to be seen.

For now, United Capital stands as a paradox on the NGX — a fundamentally strong company waiting for market confidence to catch up with its performance.

Key Numbers at a Glance

Metric	H1 2025	YoY Change
Profit After Tax	₦11.9 billion	+54%
Gross Earnings	₦23.76 billion	+57%
EPS	+53.5%	—
Managed Funds	₦923 billion	+9%
Operating Cash Flow	-₦119 billion	—
Dividend	₦0.30 per share	45% payout ratio
P/E Ratio	11.91x	—
Market Cap	₦337 billion	—