Last Update30 Jul 25
WaneInvestmentHouse made no meaningful changes to valuation assumptions.
NGX Group Plc delivered a robust performance in H1 2025, posting profit after tax of ₦4.22 billion, representing a significant growth of 97% compared to ₦2.14 billion in H1 2024. This sharp rebound highlights the resilience of NGX’s diversified earnings streams and the strength of its capital market infrastructure business amidst recovering macroeconomic conditions.
🔑 Key Strengths
- Strong Topline Growth: Total income for the Group grew 47.8% YoY from ₦3.58 billion to ₦5.28 billion, largely driven by a rebound in market activities and increased listings.
- Operating Efficiency: Operating profit surged by 60.3% YoY from ₦1.23 billion to ₦1.97 billion, reflecting good cost containment and higher margin realization.
- Solid Balance Sheet: The Group’s equity remains strong at ₦48.36 billion, with minimal debt exposure relative to assets (debt-to-assets ratio below 10%), suggesting strong financial flexibility.
- Investment Portfolio Stability: NGX Group maintains over ₦23 billion in investment securities and over ₦31 billion in strategic equity stakes in associates such as CSCS, giving recurring income and capital gain potential.
- Improved Cash Generation: Cash and cash equivalents rose to ₦1.24 billion (vs ₦871 million in Dec 2024), reflecting better liquidity and operational cash flows.
⚠️ Weaknesses & Risks
- Decline in Total Assets: Total assets dropped from ₦68.0 billion (FY 2024) to ₦63.3 billion in H1 2025, partly due to a drawdown in investment securities, which may affect investment income going forward.
- High Dependency on Capital Market Cycles: Revenue is inherently sensitive to capital market volatility, listings, and transaction volume – factors strongly tied to macroeconomic and regulatory stability.
- Tax Spike: Group tax expense jumped significantly to ₦842 million in H1 2025, up from ₦393 million in H1 2024, which could temper future profit margins if sustained.
✅ Recommendation
NGX Group is well-positioned as a monopoly infrastructure provider in Nigeria’s capital market. Its long-term growth is supported by increased listings, higher trading volumes, and product innovation (ETFs, derivatives). The consistent profit rebound, strategic asset holdings, and operational leverage justify accumulation at current levels for medium to long-term capital appreciation.
Investors with appetite for exposure to the financial infrastructure space and Nigeria’s capital market development should consider NGX Group as a resilient and dividend-earning play on economic recovery and market depth.
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Disclaimer
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