Over the past few years, Union Homes Savings and Loans has been experiencing downward fortune apparently due to low patronage of mortgage products by the Nigerian public. The company’s audited 2011 financial statement released to the investing public last week showed that Union Homes recorded significant losses in all measurement parameter except for share of profit accruing to the company from associated entities as well as income from investment. Stockbrokers said that the result may be a pointer that the company is grappling with managerial crisis.
The financial statement showed that the company declined from a profit position in 2010 to negative/loss position in 2011 financial year. From a profit after tax position of N6.5billion in 2010, it moved to a loss after tax of N2.39billion in the financial year ended December 31, 2011. The gross earnings for the period dropped by 18.8 percent to N5.86 billion from N7.22billion in 2010.
The balance sheet shrunk by 13.5 percent on total assets, which stood at N42.042 billion in 2011 down from N48.598 billion in 2010, while total liabilities dropped by 4.4 percent to N44.632 billion from N46.7 billion. During the period under review retirement benefit obligations rose by 106.5 percent to N1.850 billion compared with N896 million in the prior year.
Meanwhile, investors who participated in the Union Homes Real Estate Investment Trust (REIT) in 2008 may have to wait a bit longer to get returns from their investment. It would be recalled that Union Homes floated a REIT hybrid offering of 970,873,787 units of N50.00 at N51.50 per unit.
Currently, the Union Homes REIT which is listed on the Nigerian Stock Exchange (NSE) sells at nominal value of N50.00 per unit, amounting to a loss of N1.50 or three percent on every unit of the REIT purchased at the offer price.
Apart from the depreciation in unit price, the Union Homes REIT has equally failed to deliver on other promises made to the investing public during the offer. Despite proposing to payout 90 percent of net income accruing from the REIT to investors annually as dividend, the managers of the REIT have not paid any dividend since inception.
The company paid last dividend bonus in 2008; the stock sells at nominal price of N0.50 per share. Union Homes REIT trades at N50 per unit, and the last transaction was done on the shares on12th of March, 2013.
Tantalizers Plc is another stock that is hit by poor performance in the previous year. Like Union Homes, it recorded a declining fortune in all the measurement parameters. Though it paid 2kobo as dividend in 2011, shareholders will get no form of compensation in the 2012 financial year.
A look at the results released last week showed that profit before tax slumped by huge 414 percent to negative N263.180 million from positive region of N83.59 million in 2011. There was also 397.9 percent decrease in profit for the period as it slumped to negative N303.47 million from the previous N101.87 million.