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Considering the positive and favourable growth in the company’s top line, the Managing Director/Chief Executive of May & Baker Nigeria Plc, Mr. Nnamdi Okafor has said that good dividend will be given on Return-on-Investment (ROI) for the 2018 financial end.
He said notwithstanding the N900 million debt profile, the company with a paid-up-capital of N450 million, asset of N7 billion and a 45 thousand shareholders base has consistently grown its top-line by 10 percent since 2013 till date even as it doubled in the past 2 years.
Addressing the capital market community during the company’s Fact Behind The Right Issue on Friday, Okafor implored shareholders of the company to pick up their Rights, as investors will begin to enjoy good yield on their investment based on the current strategy put in place to drive the company’s operations.
The CEO who said N4 billion has suffer far been expended on building its pharmaceutical plants at Ota in Ogun State, and currently running at a 60 per cent capacity, noted that investment in the remaining 40 per cent expansion capacity prowess holds a lot of opportunity for the company and owners of the business.
“We have signed agreement in the last 2years with the government in the local production of vaccines. The production and commercialisation of products of their research on Sickle Cell Anaemia, holds a lot of opportunity for the company”.
Explaining further what the proceeds from the Right Issue will be utilised on, the CEO informed the market community that the company will focus more on innovation in Research & Development which has become a key driver in business growth globally, saying this will result in the company becoming a leading healthcare service provider in the Sub-Saharan Africa.
The May & Baker CEO who claimed that the company is looking at the broader areas of healthcare, said “We shall branch out to other market in the Sub-Saharan Africa where we have comparative advantage, regional healthcare power house, by being the preferred brand in the local market”.
He said that the injection of funds from the Right Issue will further make the company profitable and a sustainable entity. “That proceeds from the Rights is one whose impact will seen beginning from 2019 and that it will bring the desired results on Return-On-Investment to investors.
On the company’s strategic imperatives, the CEO said “ it will embark on an aggressive brand building, build strategic partnership to expand scope and specialisation, accelerate local vaccines production project, expand foot prints; mergers and acquisitions, strategic alliances and vertical integration in packaging”, he added.
The performance summary of the company showed that revenue grew by 10 per cent in 2017 to N9.353 billion. Gross Profit climbed by 35 per cent to N3.278 billion and Profit After Tax margin rose by 4 per cent in the same year under consideration.
Specifically, there was a strong revenue growth in the past 5 years. PBT doubling since 2016. Return On Asset doubling year-on-year since 2014, consistent dividend payout since 2014, strategic investment in pharmacentre, WHO prequalification and strategic agreement with the Federal Government on Biovaccines, NIPRO and FIIRO.
On the flip side, the company is experiencing high gearing, high financing cost, gross margin averaging 35 per cent which is below industry mark, depleted cash flow/work capital and inadequate research and development capability.
May and Baker had applied to the Nigerian Stock Exchange (NSE) to raise N2.450 billion fresh capital from existing shareholders. The company is going to raise the funds through a Rights Issue of 980 million shares of 50 kobo each at N2.50 per share on the basis of one new share for every one share held as at the close business on Tuesday, 4 September 2018.
The Right Issue had opened on Monday October 15, 2018 and expected to close on Wednesday November 21, 2018.
