Access Holdings Plc 2022FY Earnings Result | Burgeoning Impairment Costs – Same Story Across Peers
In its 2022FY audited financial results, released on the 20th of April 2023, Access Holdings Plc posted a 43.22% YoY growth in Gross Earnings to NGN1.39trn, crossing the NGN1trn mark. Interest Income grew 37.53% YoY to NGN827.47bn while non-Interest revenue climbed 52.43% YoY to NGN559.93bn. On the other hand, Operating Expenses surged 35.43% YoY to NGN502.36bn following a spike in personnel expenses, IT and e-business expenses and admin expenses in the period. Net impairment charge on financial assets surged 137.69% YoY to NGN197.79bn in 2022FY following the Group’s impairment recognition of NGN103.10bn on Ghana sovereign debt. Consequently, Profit Before Tax (PBT) and Profit After Tax (PAT) deteriorated by 5.04% YoY and 4.49% YoY each to settle at NGN167.68bn and NGN152.90bn respectively. As a result, Net Profit Margin slipped 5.50% to 11.02% in the period.
Overall, we arrived at a target price for ACCESSCORP at NGN13.14 for 2023FY using a blend of Dividend Discount Model and Relative Valuation methodology. At its current price of NGN10.6 as of 25th April 2023, this translates to an upside prospect of 24%. Thus, we put a “STRONG BUY” rating on the stock.
ARM Securities Limited is a full-service brokerage house that offers best-in-class brokerage services to local as well as foreign private and institutional investors. Formerly known as Hamilton Hammer, the Company commenced operation in 1994 and was acquired by ARM Investment Managers in 2008--an acquisition which has successfully re-positioned the company as a recognized brokerage firm in Nigeria. The Company is a dealing member of the Nigerian Stock Exchange (NSE) and is regulated by Securities and Exchange Commission (SEC). ARM Securities research team provides insightful commentaries on the Nigerian economy and its equity and debt markets using an approach which incorporates a thorough understanding of the fundamentals of the industries and companies under coverage. The research therefore adopts an integrated methodology of top-down analysis and bottom-up stock selection, which focuses on publicly quoted companies on the Nigerian Stock Exchange that are judged to offer the highest potential for earnings growth. In addition, its analysts provide periodic commentaries on a range of topical global and local issues which provide investing clients with a holistic view of the opportunities and risks in today’s financial market landscape.
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