VFD GROUP PLC Q3 Result– Robust Earnings Momentum and Strong Balance Sheet Growth Underpin Solid Nine-Month Performance

Executive Summary

VFD Group Plc reported an impressive performance for the nine months ended 30 September 2025, with substantial growth across core earnings, profitability, and balance sheet size. The Group sustained its strategic expansion drive across its diversified investment portfolio, demonstrating strong resilience and earnings momentum despite a challenging macroeconomic environment. Gross earnings surged by 34.9% year-on-year to ₦60.72 billion (vs. ₦45.01 billion in 9M 2024), driven by robust investment income, improved fair value gains, and strong performance from portfolio subsidiaries. The Group’s profit before tax rose by 61.5% year-on-year to ₦7.99 billion, while profit after tax expanded 48.6% to ₦6.63 billion, reflecting disciplined cost management and efficient capital deployment. VFD Group’s total assets grew 29.6% year-to-date to ₦383.39 billion, supported by increased investment assets, higher deposits, and expansion in funds under management. Shareholders’ funds strengthened 22.2% to ₦71.50 billion, underscoring continued value accretion and strong balance sheet fundamentals. The Group also recorded a remarkable ₦12.5 billion in other comprehensive income, primarily from fair value gains on equity securities, lifting total comprehensive income for the period to ₦19.13 billion, a more than fourfold increase from ₦4.42 billion in the prior year.

Financial Highlights

₦’000 9M 2025 (Group) 9M 2024 (Group) % Δ YoY 9M 2025 (Company) 9M 2024 (Company) % Δ YoY

Gross Earnings 60,721,553 45,013,289 +34.9% 19,558,757 17,339,865 +12.8%

Net Investment Income 45,652,333 31,547,277 +44.7% 14,860,945 14,440,059 +2.9%

Other Income 6,059,856 3,844,059 +57.7% 234,010 834,916 -72.0%

Net Revenue 54,971,576 36,856,852 +49.1% 19,009,003 16,359,753 +16.2%

Total Operating Expenses (15,120,690) (12,824,102) +17.9% (4,127,058) (2,988,882) +38.1%

Operating Profit 39,850,886 24,032,751 +65.8% 14,881,945 13,370,872 +11.3%

Finance Cost (31,938,901) (19,150,945) +66.7% (14,542,345) (12,308,737) +18.1%

Profit Before Tax 7,994,053 4,949,765 +61.5% 354,924 1,108,803 -68.0%

Profit After Tax 6,633,115 4,465,245 +48.6% 298,136 1,108,803 -73.1%

Other Comprehensive Income 12,496,631 (43,496) N/A 12,379,610 11,023 N/A

Total Comprehensive Income 19,129,746 4,421,749 +332.5% 12,677,746 1,119,826 +1,032.0%

EPS (Basic & Diluted, Kobo) 64 45 +42.2% 4 15 -73.3%

Earnings and Operational Performance

VFD Group’s strong performance in the first nine months of 2025 underscores the success of its diversified business model and strategic asset management approach. Gross earnings rose 34.9% to ₦60.72 billion, primarily driven by a 44.7% increase in net investment income to ₦45.65 billion, reflecting improved yields on financial assets and higher returns from portfolio companies. Fair value gains on financial assets (₦5.58 billion) and higher other income (₦6.06 billion) provided further tailwinds, reinforcing the Group’s investment-driven revenue structure. Despite rising inflationary pressures, total operating expenses grew modestly by 17.9%, below the growth rate of gross earnings, highlighting effective cost management. The cost-to-income ratio improved to 27.5% (vs. 34.8% in 2024), supporting operational efficiency gains. Operating profit before tax surged 65.8% year-on-year to ₦39.85 billion, a testament to VFD’s ability to leverage scale and manage funding costs effectively.

Profitability Analysis

The Group’s profitability profile improved significantly during the review period, with solid growth across key metrics:

• Operating profit margin: 65.3% (vs. 56.6% in 9M 2024).
• Net profit margin: 10.9% (vs. 9.9% in 2024).
• Return on equity (ROE): 18.5%, up from 15.2% in FY2024.

Although finance costs increased sharply (+66.7% YoY) to ₦31.94 billion due to higher borrowing levels and elevated interest rates, strong investment yields and fair value gains more than offset the impact. At the Company level, standalone profits were modest (₦298 million), reflecting intercompany cost allocations and limited trading activity compared to the consolidated portfolio.

Comprehensive Income Analysis

A key highlight of the period was the ₦12.5 billion fair value gain on equity securities, reflecting appreciation in the Group’s investment portfolio following favorable market valuations. Consequently, total comprehensive income jumped to ₦19.13 billion, underscoring improved asset quality and value realization. The Group’s earnings per share rose 42% to 64 kobo, demonstrating consistent value creation for shareholders.

Balance Sheet Overview

₦’000 Sep 2025 Dec 2024 % Change

Total Assets 383,390,637 295,669,368 +29.6%

Total Liabilities 311,888,626 237,143,143 +31.5%

Shareholders’ Fund 71,502,011 58,526,225 +22.2%

Cash & Cash Equivalents 20,498,188 13,345,756 +53.6%

Investment in Financial Assets 78,152,976 50,990,113 +53.2%

Funds Under Management 83,843,934 49,381,873 +69.8%

Borrowings 119,773,784 121,427,577 -1.4%

Deposit Liabilities 59,204,514 34,900,483 +69.7%

Interpretation:

• Asset growth was driven by expansion in investments and funds under management, as the Group deepened its financial services exposure.
• Cash and equivalents rose 54%, reflecting improved liquidity and capital efficiency.
• Shareholders’ funds expanded 22%, supported by retained earnings and fair value gains.
• Leverage remains moderate, with debt-to-equity ratio stable at ~2.3x, providing room for further growth.

Segmental and Investment Highlights

• Financial Services: The Group’s anchor segment continued to deliver stable earnings through VFD Microfinance Bank and Anchoria Asset Management, with growth in interest income and trading revenues.
• Technology & Fintech Investments: Strategic holdings in digital payment and technology platforms contributed positively through fair value gains and associate income.
• Real Estate & Property: The revaluation of investment property (₦22.44 billion) and inventory growth reflected increased activity in VFD’s real asset portfolio.
• Associates & Subsidiaries: Share of profit from associates rose 20.8% year-on-year to ₦82.07 million, supported by stronger performance from key affiliates.

Key Ratios

Ratio 9M 2025 9M 2024 Change

Gross Earnings Growth +34.9% +27.5% +7.4pp

Cost-to-Income Ratio 27.5% 34.8% -7.3pp

Net Margin 10.9% 9.9% +1.0pp

ROE 18.5% 15.2% +3.3pp

ROA 2.6% 1.8% +0.8pp

Debt-to-Equity 2.3x 2.0x +0.3x

Liquidity Ratio 1.2x 1.1x +0.1x

Strategic Developments

• Balance Sheet Expansion: VFD continues to consolidate its investment position across financial services, technology, and real estate sectors, enhancing diversification.
• Capital Strength: Retained earnings and fair value gains have bolstered the Group’s capital base, strengthening its capacity for further acquisitions and partnerships.
• Digital Transformation: The Group continues to integrate fintech platforms into its ecosystem to enhance customer experience and transaction efficiency.
• Funding Optimization: Management is actively managing its cost of funds through deposit mobilization and refinancing strategies to reduce interest expense pressures.

Strengths

• Diversified investment portfolio providing multiple income streams.
• Significant growth in assets and shareholders’ equity.
• Improved cost efficiency and rising return on equity.
• Strong liquidity and robust capital adequacy.

Weaknesses

• Rising finance costs continue to pressure net margins.
• Increasing exposure to fair value fluctuations in volatile markets.
• Concentration risk in specific asset classes.
• Standalone entity profitability remains modest relative to consolidated performance.

Outlook

The outlook for FY2025 remains positive, supported by VFD’s diversified investment base, healthy liquidity, and robust asset growth trajectory. The Group is well positioned to benefit from elevated yields in the fixed-income market, ongoing expansion in its financial services subsidiaries, and expected revaluation gains across strategic holdings.

However, persistent inflationary pressures and elevated borrowing costs may continue to pose challenges to net margin expansion. Management’s focus on efficient capital allocation, balance sheet optimization, and digital growth is expected to sustain earnings momentum into FY2026.

Analyst View

“VFD Group Plc continues to demonstrate strong earnings resilience and disciplined capital management. The Group’s diversified asset base, combined with its strategic investments in financial services and fintech, positions it for sustained profitability and value creation. Despite higher finance costs, the impressive growth in earnings and shareholder funds underscores the Group’s strong fundamentals and its potential for further expansion.”

Conclusion

VFD Group Plc delivered a robust nine-month performance in 2025, reflecting strong core earnings growth, efficient cost control, and solid balance sheet expansion. With rising asset values, improved liquidity, and continued diversification, the Group remains on a strong trajectory toward long-term sustainable growth and enhanced shareholder value. The impressive year-to-date results affirm VFD’s position as one of Nigeria’s leading diversified investment groups, combining operational agility with strategic foresight to deliver consistent performance in a dynamic economic environment.