NGX Group FY 2024: Strong Revenue Growth of 103.53% Driven by Market Activity and Strategic Focus
The Nigerian Exchange Group (NGX) reported impressive financial results for the year ending December 31, 2024, with a significant 103.53% revenue growth. This surge was attributed to increased market activity, bolstered by the recapitalization of listed banks and the listing of large-cap stocks, such as Transcorp Power, Aradel Holdings, and Haldane McCall. Despite these positive developments, the NGX’s focus remains on equity transactions, as debt market issuances have been sparse, and its subsidiary’s real estate operations have been underperforming.
In terms of revenue composition, the NGX’s financial performance was primarily driven by transaction fees (47%), listing fees (32%), and treasury investment income (18%). Additional income sources included net foreign exchange, market data, and gains from property disposals. As a result, the Group saw a substantial increase in both pre-tax and post-tax profits, reaching N13.58bn and N9.92bn, respectively. The company declared a dividend of N2.00 per share, translating to a 7% dividend yield for investors.
However, the NGX still faces challenges in expanding beyond its dominant equity market activities. Analysts have pointed out the underutilization of other potential investment vehicles, such as Real Estate Investment Trusts (REITs), Mutual Funds, and Exchange Traded Funds (ETFs), which could enhance market liquidity and attract more investors. These areas are seen as untapped opportunities that could drive further growth and strengthen Nigeria’s capital market.
Looking ahead, the NGX’s financial ratios have improved, reflecting better asset utilization and lower financial risk. Although the group’s current liquidity ratios were below 1.00x, suggesting a reduced ability to cover short-term liabilities, its P/E ratio has declined, indicating that the market is perceiving greater earnings potential. With expectations of further strategic actions, such as the potential listing of major companies like NNPC and Dangote Refinery, as well as continued technological advancements, the NGX aims to boost market breadth and support a more robust economy in 2025.
Source: proshare