ARM Pensions Profit After Tax Rises By 78.4 Percent

By Nnamdi Duru

　

The Managing Director of ARM Pension Managers Limited, Mr. Sadiq Mohammed, has said the Pension Fund Administrator (PFA) recorded 33 per cent growth in revenue and 78.4 per cent improvement in profit after tax, for the year ended February 28, 2013.

He confirmed this in an interview with THISDAY at the 2013 Annual General Meeting (AGM) of the company in Lagos recently. According to him, the fund manager raked in N3.02 billion in the last financial year; a 33 per cent improvement on the N2.27 billion recorded in the previous year.

The firm also made profit before and after tax worth N1.43 billion, a 51.2 per cent increase over the N950 million it recorded in the previous year. In the same manner, profit after tax made by the PFA rose to N1.04 billion; a 78.4 per cent increase over the N580 million it made in the previous year.

"We have had a growth of about 33 per cent in terms of revenue as well as profit before tax. We reported a turnover of about N3.02 billion and profitability before and after tax of N1.43 billion and N1.04 billion respectively. It has been a good performance for our company," Mohammed said.

Reflecting on the above, he said it was driven by the combined effect of new inflow of pension funds and strong investment performance.

According to him, within the period under review, funds under management by ARM Pensions funds rose by 45.9 per cent, from N181.3 billion in the previous year to N264.6 billion last year. The firm's earning per share rose from 49 kobo per share to 88 kobo per share while shareholders in the company went home with 60 kobo per share, a 20 per cent improvement on the 50 kobo they got in the previous year. Also, investment returns on ARM Pensions' retirees' fund was 15.51 per cent last year, a slight improvement over the 14.42 per cent recorded in the previous year.

The ARM Pensions boss also confirmed that Retirement Savings Account (RSA) holders in the firm also reaped bountifully in the last financial year, having earned the highest rate of returns on retirement savings in the industry.

"If you look at last year, our RSA fund returned the highest in the industry of over 14.9 per cent. Also retirees, we had the best performance for 2012. If you look at 2012 and the overall for those two retail funds where the bulk of our clients are, we have the best performance in the industry in terms of returns to our clients. Also, over the years, we have returned consistent performance for our clients," the ARM pensions boss stressed.

According to him, the PFA, which was managing retirement savings of about 502,000 workers in the country, has increased the number to about 510,000 as at the end of June 2013.

Mohammed also confirmed that ARM Pensions has paid over N20 billion as retirement benefits to pensions under contributory pensions since the inception of the company.

"We have over 510,000 accounts as at the moment but as at the year end, February 28, 2013, we had slightly over 502,000 accounts. We also have about 6,000 retirees and others because of certain funds that we manage for UBA Plc and we have paid over N20 billion since the business started in terms of retirees' benefits. It is a good business in terms of providing benefits to our clients whether they are contributors or retirees," Mohammed said.

Also foraying into the future, he said his organisation was discussing with other like-minded operators in the industry to see ways of exploring available opportunities by way of business combination. "We have been discussing with different players in the industry. Actually we set the precedent in the industry by doing the first merger or business combination with First Alliance in 2010. That was the first merger in the industry between ARM Pensions and First Alliance PFA. Subsequently, we have been looking at opportunities to see where the potentials are," he said.

"I personally believe that over the next five years, there has to be consolidation in the industry to may be a lower number of players to about 10. It has happened in other jurisdictions and it is only a matter of time, it will happen in the pension industry, particularly given the high competitiveness of the industry in recent years," Mohammed predicted.

Licensed to offer retirement savings fund management services to workers and pensions, with over N285 billion under management as at 30 June 2013, ARM Pension Managers Limited prides said it is committed to giving its clients a most fulfilling and rewarding investment experience in pension administration and management.

It is a subsidiary of Asset and Resources Management Company Limited (ARM), an investment management firm with a track record of protecting and growing investment for private investors and institutions for over a decade.