HALDANE McCALL PLC Q3 2025 Result – Resilient Profitability Amid Revenue Contraction and Strong Balance Sheet Growth

Executive Summary

Haldane McCall Plc delivered a steady performance for the nine months ended 30 September 2025, demonstrating operational resilience and prudent financial management despite a challenging macroeconomic environment. Revenue for the period declined 44% year-on-year to ₦1.82 billion (9M 2024: ₦3.27 billion), reflecting reduced business volumes across the hospitality and real estate segments. Despite top-line pressures, effective cost optimization and operational efficiency supported strong profitability. Gross profit remained robust at ₦1.41 billion (down 7% YoY), while operating profit stood at ₦620.18 million (down 11% YoY). Profit After Tax amounted to ₦415.52 million, representing an 11% YoY decline, underscoring the Group’s disciplined expense management and ability to preserve margins. Haldane McCall’s balance sheet strengthened, with total assets rising 11% to ₦21.06 billion and total equity increasing to ₦16.71 billion, reflecting the company’s strong asset-backed value, ongoing property developments, and sustainable shareholder value creation.

Financial Highlights

₦’000 9M 2025 9M 2024 % Δ YoY

Revenue 1,818,605 3,265,971 -44.3%

Cost of Sales (406,970) (1,755,733) -76.8%

Gross Profit 1,411,635 1,510,238 -6.6%

Other Operating Income 3,294 58,249 -94.3%

Other Operating Expenses (794,750) (870,080) -8.7%

Operating Profit 620,179 698,407 -11.2%

Profit Before Tax 620,179 698,407 -11.2%

Income Tax Expense (204,659) (230,474) -11.2%

Profit After Tax 415,520 467,932 -11.2%

Total Comprehensive Income 415,520 467,932 -11.2%

EPS (₦) 0.13 0.15 -13.3%

Earnings and Operational Performance

Haldane McCall’s nine-month results reflect cautious yet effective operational management:

• Revenue contraction was primarily due to lower project execution in the hospitality and real estate segments.
• Gross profit margin remained strong at 78%, highlighting effective cost controls and efficient utilization of assets.
• Operating profit margin held at 34%, demonstrating management’s ability to maintain profitability amid top-line pressures.
• Other operating income declined significantly (-94%), offset by sustained administrative expense discipline.

Profitability Analysis

• Operating Profit Margin: 34% (vs. 36% in 9M 2024).
• Net Profit Margin: 23% (vs. 14% in 9M 2024), reflecting strong cost management despite declining revenue.
• Return on Equity (ROE): 2.5% (marginally lower due to revenue contraction).

The Group’s profitability resilience is supported by cost efficiency, disciplined expense management, and optimized asset utilization, mitigating the impact of subdued revenue.

Balance Sheet Overview

₦’000 Sep 2025 Dec 2024 % Δ

Total Assets 21,064,273 18,906,418 +11.4%

Total Liabilities 4,355,367 4,501,871 -3.2%

Shareholders’ Equity 16,708,906 14,404,547 +16.0%

Inventories 5,875,806 2,270,143 +158.8%

Trade & Other Receivables 926,607 1,084,341 -14.5%

Cash & Cash Equivalents 34,046 114,034 -70.1%

Interpretation:

• Growth in inventories reflects ongoing housing and hospitality developments, supporting future revenue streams.
• Strong equity position underpins shareholder value and provides flexibility for expansion.
• Stable liabilities and prudent capital management indicate a healthy and sustainable balance sheet.

Segmental and Operational Highlights

• Real Estate Development: Delivery of housing units in Lagos and Benin Republic, with ongoing 1,200-unit project in Majidun, Lagos.
• Hospitality (Suru Express): Continued expansion to strengthen recurring income streams.
• Capital Deployment: Rights issue approval of up to ₦250 billion enables accelerated investment in housing and hotel assets in urban markets.
• Operational Efficiency: Cost containment measures maintained gross margin at 78%, sustaining profitability despite top-line weakness.

Key Ratios

Ratio 9M 2025 9M 2024

Revenue Growth -44% 0%

Operating Margin 34% 36%

Net Margin 23% 14%

ROE 2.5% 2.9%

Asset Growth +11.4% +8.5%

Equity Growth +16.0% +10%

Strengths

• Strong asset-backed balance sheet with growing inventories and property portfolio.
• Effective cost and operational management preserving profitability amid revenue pressures.
• Strategic focus on scalable housing and hospitality projects positions the Group for long-term growth.

Weaknesses

• Revenue contraction highlights sensitivity to macroeconomic conditions and project execution volumes.
• Cash and receivables management pressures could limit near-term liquidity.
• Exposure to real estate market cyclicality and hospitality demand risks.

Outlook

Haldane McCall is positioned to leverage its robust asset base and strategic property/hospitality projects to drive future revenue growth. Key focus areas include:

• Completion of ongoing housing projects and expansion of Suru Express Hotels.
• Prudent capital deployment from rights issue proceeds to strengthen operational capacity.
• Sustained cost management and efficiency initiatives to preserve margins.

While short-term revenue pressures persist, the Group’s balance sheet strength and operational discipline provide a solid foundation for sustainable growth and long-term shareholder value creation.

Analyst View

“Haldane McCall Plc continues to demonstrate resilience through disciplined cost management and effective asset utilization. Despite revenue headwinds, profitability remains stable, and balance sheet expansion provides a foundation for future growth. Ongoing investments in housing and hospitality projects are likely to enhance recurring income streams, positioning the Group for long-term sustainability.”

Conclusion

Haldane McCall Plc maintained profitability and strengthened its balance sheet in 9M 2025 despite revenue contraction. Strategic investment in real estate and hospitality, combined with disciplined cost management, positions the Group for continued value creation and operational expansion, reinforcing its position as a leading property and hospitality player in Nigeria and West Africa.