Shareholders Of CSCS Get N3.7bn Dividends As Company’s Revenue Up By 39.2%

*We will deliver superior performance, and create wealth for shareholders-Onyema

Shareholders of Central Securities Clearing System (CSCS) Plc have unanimously approved the proposed total dividend payout of N3.7billion by the board of the company.

This is even as the Chairman, Board of Directors of CSCS, Mr Oscar Onyema, has said the company will continue to deliver superior performance and create wealth for shareholders, who have seen notable rise in share price of the company over the past year.

The dividend proposal, which was announced at the Company’s 28th Annual General Meeting (AGM) on Friday in Lagos, was unanimously approved by the shareholders, who commended the Executive Management for an incredible performance, despite the challenging operating environment.

However, considering the N3.7billion dividend, which translates to an 83.7per cent payout ratio, reflects the resilient profitability of the Company, notwithstanding the impact of lower trading activity on most Exchanges in the Nigerian capital market and inflationary pressures.

Consolidating on its diligent earnings diversification drive, the Company grew revenue from core operations and ancillary services by 39.2 per cent to N6.4billion from N4.6billion in 2020, as it almost quadrupled earnings from ancillary services from N526million in 2020 financial year to N2.2Billion in 2021 financial year.

Notably, income from ancillary services contributed 33.3 per cent and 21.5 per cent of operating revenue and total income for the year respectively, underpinning Management’s strategy towards diversifying and strengthening the earnings fundamentals of the Company, with the ultimate objective of creating sustainable and superior wealth for shareholders and its broader stakeholders.

Addressing shareholders, Mr Oscar Onyema OON, Chairman, Board of Directors of CSCS Plc said; “Notwithstanding the volatile operating environment and moderated capital flows, as reflected in the subdued capital market activities, the earnings fundamentals of your Company remained resilient and indeed stronger than ever.

“This fact is evident in the impressive revenue growth of 39.2 per cent, driven by stellar growth in ancillary income. The equity market recorded one of the weakest secondary market activities in the past few years, with the average daily trade value of N3.9billion, some 10% below the trading activity recorded in the 2020 financial year, explaining the tepid transaction fees.

“Albeit income from ancillary services recorded a significant boost, contributing N2.2billion or 21.5% of total income in 2021FY, from N526million or 11.3% of total income in 2020FY. This performance reinforces the capacity of the Management in delivering on the Board’s vision result of diversifying the business and enhancing the value accretion prospect to shareholders in a sustainable manner.

“More importantly, my colleagues and I on the Board of your Company, are excited at the prospect of new offerings arising from strategic partnerships and new initiatives. In our oversight role, we are working with the Management to invest relevant resources towards exploring new frontiers for growth, especially as these initiatives are expected to foster retail investor penetration and broader capital market growth.”

While commenting on the outlook for the business, the Chairman noted: “typical of a pre-election year, 2022 comes with its unique macro challenges but I am optimistic on the earnings capacity and overall resilience of our business, as we hope to consolidate on the strong foundations and extract synergies opportunities with our participants and partners in sustaining the positive trajectory of the business. Hence, with the support of shareholders and other stakeholders, CSCS would continue to deliver superior performance and create wealth for shareholders.

In the same vein, Mr Haruna Jalo-Waziri, the Chief Executive Officer, CSCS Plc said; “Reflecting the ingenuity of our participants and more importantly quick adoption of new remote access technologies, the Nigerian capital market remained active through the prolonged COVID-19 crisis. The collaboration of our regulator and participants has been incredible in sustaining our operational protocols and IOSCO PFMI standards.”

“Though clearing and settlement activity waned by 10.2 per cent due to lower participation of foreign investors in the Nigerian equity market and a host of macro challenges, we are excited at the growth in our depository assets by 6.1 per cent to N23.0trillion, reflecting new listings of securities across our multiple Exchange partners as well as issuers’ and investors’ confidence in the safety and secured accessibility of our systems”, he said.