Veritas Glanvills Pensions published its 2023 audited accounts. This is a summary review, and it presents key financial highlights, financial ratios, fund performance, and the trend in the number of Retirement Savings Account (RSA) holders.

Financial Highlights

• Total Revenue: Total revenue for the company rose 21% to ₦2.43 billion in 2023, up from ₦2.00 billion in 2022. A breakdown shows that the increase is attributed to higher fee income generated from the pension funds it has under management, which rose 19% to ₦1.77 billion from ₦1.48 billion and a 27% rise in investment income from managing internally generated revenue which rose to ₦658 million from ₦517 million.
• Profit After Tax (PAT): PAT rose 31% to ₦582 million from 444 million in 2022, down on the previous year’s 107% rise.
• Operating Expenses: Operating expenses rose slightly slower than revenue and PAT by 20% to ₦1.71 billion from ₦1.43 billion. This led to a marginal fall in the company’s cost-to-income ratio to 70.44% from 71.52%. Whilst this may indicate that the company may be managing cost and inflationary pressures, a cost to income ratio of 70+% is high.
• Shareholder’s Funds: The company’s shareholders funds ended the year at ₦6.33 billion in 2023 up 5% from the ₦6.0 billion in 2022.
• Return on Equity (ROE): ROE was a very poor 9.19%, indicating a terrible grip on how to efficiently deploy shareholders’ capital to generate profits. Over the last 5 years ROE has averaged just 8.14%.

Financial and Fund Highlights

Corporate Audited Annual Results

Financial Ratios

Fund Performance Highlights

Note: Abridged audited accounts published by Veritas Glanvills Pensions did not include the audited NAV per unit for each respective fund. As such we have used the 30 December 2023 NAV extracted from the company’s website, calculated and published in accordance with PenCom regulations.

• RSA Funds Performance: Veritas Glanvills Pensions offers all seven regulated RSA pension funds to the public. Whilst all seven funds put in a better performance than the previous year, compared to industry indices and other benchmarks, they are not great, and only four funds out-performed the industry benchmark returns (see our article on benchmark returns here).

5-Year Audited Pension Funds Performance

Number of RSA Holders

• RSA Growth: For 2023, Veritas Glanvills Pension Managers saw an increase of 3.63% in RSA holders, adding 5,676 new accounts to close the year at 161,955 RSA holders.

Demographic Analysis

• Age Distribution: The majority of 330,000 RSA holders (83.9%) registered in 2023 fell within the age bracket of <30 years to 39 years, indicating a young and growing industry subscriber base. Of the 2023 registrations, Veritas Glanvills Pension Managers recorded just 1.72% of this growth.

Conclusion

The 2023 audited accounts of Veritas Glanvills Pensions reveal a year of pedestrian progress. The company's total revenue saw an increase of 21%, just slightly above its 19% 5-year average. Despite a 31% rise in profit after tax, operating expenses grew 20%, with the company maintaining an industry high cost-to-income ratio of 70.44%. There was a slight growth in shareholders' funds, which rose 5%, while the return on equity, although improved on 2022 continued its dismal return at 9.19%, highlighting the need for more efficient deployment of capital.

Pension fund performances need improvement. Whilst all seven funds put in improved performances than the year before, only Fund V and Fund VI (R) generated above average industry returns and only four of the funds outperformed the industry benchmarks. It’s no wonder for the first time the company did not publish and declined to release the audited NAVs with the abridged accounts. One sub-par performance year does not thee define; good fund managers know that.

Watch out for the 2024 Money Counsellors Annual Report on Pensions. MCARP 2023 available here.