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UAP Holdings profit surpasses 1b mark

NAIROBI, Kenya, Apr 26 – Financial Services Group UAP Holdings Limited, has announced a 53 percent growth in profits for the year ended 31 December 2011.

The group’s profits rose to Sh1.21 billion in 2011, up from Sh790 million achieved in 2010, while earnings per share increased by 68 percent to Sh7.40 per share, from Sh4.40 in 2010.

Group Managing Director (MD) James Muguiyi said new business growth coupled with positive investment performance propelled the group’s strong results during the year, which was also evident in the group’s regional subsidiaries.

“Our 2011 results are a significant improvement over 2010 on all key measures, with excellent growth in profitability, driven by a strong growth in premiums, investment income and containment of costs.

Premiums growth has been aided by growth in new business, introduction of new products across all our operations in the region and enhancement of our distribution channels,” he said.

Total revenue was up 25 percent during the year keeping with an average growth rate of 26 percent the group has been experiencing over the last four years.

Operations in Kenya comprising UAP Insurance Company and UAP Life Assurance contributed 71 percent of the total revenues, while UAP Insurance Uganda and UAP Insurance Sudan contributed 20 percent and 9 percent respectively.

“Investment income held steady during the year, despite a poor performance of the stock market which decreased by over 28 percent.

This positive investment performance was driven by a well thought out strategy on diversification of the investment portfolio across key stable asset classes including properties and fixed income investments,” Muguiyi said.

Net claims and policyholder benefits payable increased by 21 percent, with the net earned premiums increasing 25 percent, which was attributed to an improved quality of underwriting and new business.

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The group’s expenses was contained, increasing marginally by two percent, while total assets increased by 17 percent to Sh14.5 billion.

Following the year end, UAP injected Sh500 million into UAP Life Assurance to enhance its capital base and boost its underwriting capacity and cushion it against adverse movements in equity markets.

“The drive to increase the capital level for our operating subsidiaries is part of a proactive strategy to consistently meet the needs of a dynamic market. We believe this capital injection will further strengthen UAP Life’s capital base, while laying an even stronger foundation for a healthy and sustainable development of the company’s business going forward,” the MD said.

Muguiyi added that the group will continue with its regional expansion initiatives with market entry planned for three countries in East and Central Africa region during 2012.

Markets UAP is eyeing to enter by 2014 to increase its Pan-African presence include Ethiopia, Burundi, Ghana, Nigeria, Malawi and Zambia.

The total enterprise value of the properties in UAP’s development pipeline is in excess of Sh8 billion to enhance its real estate development portfolio in Kenya, Uganda and South Sudan.

The group is also finalising a capital raising initiative to generate between Sh5.5 billion and Sh6 billion through private equity funds to boost its expansion strategy and support its existing businesses.

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