CSCS Grows Revenue by 39.2%, Pays Shareholders Total Dividend of N3.7bn Sun May 2022

^{In keeping with its commitment to ensuring strong and sustainable returns to its shareholders, the Board of the Central Securities Clearing System (CSCS) Plc has proposed a total dividend of N3.7Billion. Hence, reinforcing the value accretion to its equity owners, who have seen a notable rise in the company's share price over the past year.  The dividend proposal, recently announced at the Company's 28th Annual General Meeting in Lagos, was unanimously approved by pleased shareholders, who commended the executive management for a solid performance, despite the challenging operating environment.}  

^{The N3.7Billion dividend, which translates to an 83.7% 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% to N6.4Billion from N4.6Billion in 2020. It almost quadrupled earnings from ancillary services from N526million in the 2020 financial year to N2.2Billion in the 2021 financial year. Notably, income from ancillary services contributed 33.3% and 21.5% 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%, 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 traded 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 solid 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% 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% 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.}  

^{Mr. Jalo-Waziri said: "Despite the average inflation rate of 17.0% during the year, we sustained our cost-efficiency strategy, leading to a 1.6% decline in operating expenses. Overall, we achieved N5.8Billion and N4.4Billion Profit Before Tax and Profit After Tax, respectively, underpinning the resilience of the business and the commitment of my colleagues and me in delivering on our pledge to create value for shareholders our broader ecosystem sustainably.}  

^{"It has been twenty-five years of meritorious service as the Nigerian capital market infrastructure. We have pioneered several initiatives and efficiencies in the market and have enjoyed the best collaborative engagements with different stakeholders. While we relish our progress working with other stakeholders in transforming the Nigerian capital market, we reckon there is a long way to go in bridging the gap towards our aspiration of positioning the Nigerian capital market as the hub of securities services in Africa and one of the leading capital markets, globally. To this end, we have reinvigorated our strategic thrust with the development of a medium-term playbook that would enhance our capabilities in executing new initiatives towards deepening the Nigerian capital market and strengthening our business growth frontiers for the mutual prosperity of all our stakeholders."}

The NGX is trading at a price point not seen in 13 years Fri Apr 2022

_{The Nigerian Exchange Group’s All Share Index is currently trading at 48,223.86 basis points. Interestingly, the Nigerian exchange has not traded at this level since September 2008, that’s over 13 years ago.}

_{The Nigerian stock exchange has seen significant growth, especially in 2020, when it recorded over 50% growth in ASI. In 2021, the exchange ended the year marginally bullish by 5.89%, despite strong appeal for U.S. dominated stocks. However, its performance in 2021 is relatively small, compared to the parabolic performance in 2020.}

_{So far, in 2022, the ASI Year-to-Date (YtD) performance is bullish by 12.89%, with the Nigerian market being one of the top-performing emerging markets in Africa. This is because in YtD performance, the NGX is doing better than its peers like the Ghana Exchange which is down 3.32% YtD, the Johannesburg Stock Exchange which is down 1.1% YtD and Nairobi Securities Exchange, which is also down 6.4% YtD.}

_{What you should know}

• _{Since the market crash of 2008, when the Nigerian stock market traded at an ASI peek of over 66,000 basis point, the market has not fully recorded from that crash.}
• _{However, in recent years, we are seeing a peek in the performance of the market since the market crash of 2020 caused by panic-selling induced by the COVID-19 pandemic.}
• _{In April 2020, exactly 2 years ago, the ASI declined to as low as 20,651.59 basis points and since this point, the ASI has now more than doubled its performance compared to the current price now by 133.51%.}
• _{Although the market has not fully recovered from the market crash, the growth potential of the market is almost guaranteed, especially with the launch of its derivatives market.}
• _{Last week, the NGX announced the launch of Traded Derivatives (ETD) Market with Equity Index Futures Contracts. This is the first of its kind in West Africa.}
• _{The launch of NGX ETD Market saw the listing of two Equity Index Futures Contracts, NGX 30 Index Futures and NGX Pension Index Futures. According to the press release, it is expected that more securities will be added in the future.}
• _{The growth of the NGX is also as a result of the listing of prominent companies on the exchange. The likes of MTN, Airtel Africa, BUA Cement and BUA Foods, who have all gone on to become trillion-naira companies, have contributed greatly to the growth of the market.}
• _{The market has also seen astronomical growth in its equity market capitalization since September 2008, where it recorded N9.83 trillion. Compared to the latest market capitalization of approximately 26 trillion, this represents a growth of 164.50% in over 13 years. This is a testament to the growth and increased participation in the market, through capital injection, by both foreign and local investors.}

_{Asides from the listing of new companies, the resilience of the likes of Dangote Cement, Zenith Bank, Guaranty Trust Bank and Access Bank, who were all trading during the time of the market crash have also contributed greatly to the growth of the market.}