The VFD Group Plc, an indigenous investment and finance group that owns the single largest equity stake in the Nigerian Exchange Group (NGX Group) Plc, is concluding arrangements to list its shares on the Exchange.
NGX Group is the holding company that emerged from the demutualisation of the former Nigerian Stock Exchange (NSE), with the NGX, now a subsidiary of NGX Group, taking over the primary and secondary market businesses of the defunct NSE.
VFD Group, which also owns major equity stake of about 6.6 per cent in the NASD OTC Securities Exchange, Nigeria’s only licensed over-the-counter platform, has strategic investments in key segments of the economy, especially in the financial services sector.
Under the arrangements, VFD Group plans to delist its shares from the NASD OTC where it is currently listed as an unquoted public limited liability company, and then list on the NGX, the formal regular securities exchange for listing.
VFG Group will then subsequently seek to optimise its group structure by listing some of its subsidiaries on the NASD OTC, thus enabling the group to optimise synergistic values from both the regular and OTC markets.
VFD Group recently paid a total of N1.5 billion as cash dividends to shareholders for the 2022 business year, an increase of 9.7 per cent on N1.36 billion paid for the 2021 business year. The group’s total assets had grown by 45 per cent to N149.1 billion in 2022 from N102.8 billion in 2021.
Group Managing Director, VFD Group Plc, Nonso Okpala said the group aims at intensifying efforts in fostering exceptional cross-selling and collaboration among its investee companies, thereby potentially accelerating growth.
He said the group also plans to explore opportunities for geographical expansion, paving the way for exciting prospects and creating footprints in new markets.
Okpala had earlier laid out strategic growth direction for the group.
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According to him, one of the critical decisions made by the group concerned its evolving business model as it used to operate as a group of companies, with a focus on the centre to provide shared services, but with significant increase in the number of its investee companies and the strain on the centre, it became necessary to give the investee companies a great deal of autonomy.
He explained that to ensure aligned strategic direction and drive optimal performance, the group has effectively restructured its business model to that of an investment holding firm, with oversight on portfolio companies through the governance function.
“We are creating an ecosystem unlike any other. Today, our ecosystem provides a mechanism for entities to leverage technology, improve operational efficiency through shared services, optimize service delivery through lower customer acquisition costs, and increase earnings through a developed cross-selling, up-selling, and loyalty framework. These, along with other benefits, represent the competitive advantage that our portfolio companies have today, and what future partners and portfolio companies can expect,” Okpala said.
He pointed out that the group’s strategic acquisition of stakes in NASD Plc. and NGX Group, Nigeria’s two leading exchange businesses, was one of the recent investments that scored highly against the group’s assessment framework, noting that the group is convinced that technology will forever change the delivery of financial products and instruments via fintech platforms, and the exchange business will remain the most viable platform to ensure mass retail delivery within appropriate regulatory frameworks.
“Regardless of how impressive the financials are, they do not provide a complete picture of our company’s unrealised, intrinsic value. I will mention a few things that support this claim. The first is the enormous ability to leverage the company’s and investee companies’ balance sheets for onward investments that complement our existing ecosystem.
“Second, with our diverse portfolio of investments and products and services, we are well positioned to maximise synergy for improved delivery and efficiency through technology adoption and application. The group and its affiliated companies will benefit from significant cost savings in delivery, increased customer loyalty as a result of compelling cross-selling benefits, and improved adoption mechanisms for our early-stage businesses. This is reflected in the deals and opportunities presented to us by owners and promoters who will gladly offer discounted investment pricing in exchange for these ecosystem-based benefits.
“Finally, several of our compelling investments have yet to be listed on Exchanges, creating a gap in marketability, and establishing true value. While this is to be expected as part of these companies’ developmental growth trend, it clearly demonstrates intrinsic value that is not reflected in the group’s annual report.
“As previously stated, the full impact of the value created has not been reflected due to a lag period. We are, however, pleased with our progress thus far and, as such, urge you, our valued shareholders, to increase your support and investment in the business, as we are committed to building a brand that will provide a compelling return in the medium to long term,” Okpala said.
In 2021, the group had successfully raised additional capital of N4.1 billion through a rights issue to support ongoing expansion plans. This, together with retained earnings, brought shareholders’ funds to N14.8 billion in 2021, up from N8.9 billion in 2020. The group’s shareholder base grew from 111 to 139, broadening its investor base further. VFD Group also in March 2021, signed an investment agreement with Piggyvest Limited to acquire approximately 12 per cent of the company. With over two million users, Piggyvest is Nigeria’s leading savings technology platform. ABEG, the company’s social payment platform with over one million users, has also been spun off.
As part of the group’s strategic focus for cross-border expansion, it also invested in Cashpot, a United Kingdom-based remittance company. This investment provided the group with a global remittance structure, allowing it to broaden service offerings within its financial service value chain and attract potential new customers from various jurisdictions.
He assured that while the group’s future is full of bold and audacious plans; it has a history full of similarly bold and audacious accomplishments, and it is with this assurance that all stakeholders should look forward to the year ahead.
