The Nation Newspaper

Category: Equities

  • Mutual Benefits closes N2b rights issue

    ApplicationS for the N2 billion rights issue by Mutual Benefits Assurance Plc closed at the weekend.

    Receiving agents are expected to collate and submit subscriptions to the offer within the next two weeks.

    Mutual Benefits Assurance offered four billion ordinary shares of 50 kobo each to existing shareholders at 50 kobo per share. The rights issue was provisionally allotted on the basis of one new ordinary share of 50 kobo each for every two ordinary shares held as at the close of business on November 1, 2017.

    Application list for the rights issue opened on Monday, August 6, 2018 and closed on Friday, September 14.

    The board of the insurance company said the net proceeds of the rights issue would be used to deepen the capital base of the company and enhance its ability to create more wealth for shareholders.

    Mutual Benefits Assurance Plc Chairman, Dr. Akin Ogunbiyi, said the net proceeds of the rights issue would be used to finance the company’s growth plan including provision of additional working capital and expansion of information and communication technologies to support the company enlarged operations.

    He said the strategic goal of the company is to become the number one insurance company in Nigeria in terms of growth and profitability.

    He assured that new investments in technologies would help the company to eliminate delay in its processing and focus more on customer satisfaction.

    Addressing shareholders recently, Ogunbiyi reassured shareholders of the commitment of the board and management of the company to sustainable growth, in line with its five-year strategic plan.

    Mutual Benefits Assurance had in 2017 started implementation of a five-year strategic plan aimed at repositioning it for future opportunities and challenges.

    The five-year plan focused on four key areas of the group’s business including deepening market penetration and customer acquisition, customer service delivery excellence, transformation of it people and culture and operational effectiveness.

    Ogunbiyi noted that the 2017 business year showed the resilience of the company with 15.6 per cent growth in gross premium to N14.04 billion in 2017 from N12.14 billion in 2016, which placed the company among the top Nigerian insurance companies. Net benefits and claims grew by 53.9 per cent while the company recovered from a loss of N1.35 billion in 2016 to a profit of N1.02 billion in 2017.

    According to him, the significant growth in gross premium and better management of resources made 2017 a turnaround year for the company.

    He pointed out that the company has demonstrated its commitment to shareholders through the payment of N160 million dividend for the 2017 financial year, assuring that the latest dividend would mark the beginning of consistent dividend payments to shareholders.

  • ‘Creative financial products can help to achieve multiple goals’

    Finance and investment experts at Meristem Securities Limited have said creative financial products could narrow the gap between a person’s varied goals and his limited resources.

    People oftentimes have many objectives and goals, but limited resources. Achieving the right mix of planning and investment can help to bridge the usual gap between available resources and many lifetime goals.

    Investment experts said generic or tailor-made financial products allow individuals to meet their objectives while working towards their future targets.

    Head, Wealth Management, Meristem Trustees Limited, Mrs Damilola Hassan, said challenges of limited resources have made adequate planning and management of available resources increasingly important.

    According to her, people not only need to imbibe savings culture but they must also be knowledgeable about products and services that can help preserve and grow their wealth, while living up to their aspirations.

    “We pride ourselves in providing tailor-made solutions to address our client’s financial concerns at whatever stage of life, while putting into careful consideration unique circumstances,” Damilola said.

    She noted that Meristem Diaspora Trust (MDT) and Meristem Kiddies Assured Trust (M-KAT) are some of creative products developed by Meristem to address specific challenges being faced by several Nigerians.

    The Meristem Diaspora Trust (MDT) was specially designed for Nigerians in Diaspora who need a reliable partner that will oversee their projects and investments in Nigeria while still residing abroad. MDT covers all kind of transactions including financial investments, construction of buildings, acquiring of properties and advisory services on investment options among others.

    A report by the Migration Policy Institute (MPI), United States (US) estimated that not less than 376,000 Nigerian immigrants and their children live in the United States. The population of Nigerians in Diaspora has continued to grow. It was estimated that the population of Nigerians living abroad had risen to about 1.43 million people by 2016. The Federal Government recently successfully issued a five-Year $300 million Diaspora Bond, in further recognition of the importance of the Nigerians in Diaspora. Government had also created a special office on Foreign Affairs and Diaspora.

    MDT was created as a relief to a major challenge being faced by several Nigerians in Diaspora-trust. There have been countless cases of Nigerians in Diaspora sending money to non-institutional or unregulated contacts at home to invest in real estate and other assets and such funds get mismanaged or totally diverted for selfish purposes.

    MDT rides on the institutional capability of the Meristem Group- one of Nigeria’s largest finance and investment groups, to support Nigerians in Diaspora with suitable investment options and advisory services to realise their goals.

    “With Meristem Diaspora Trust, everyone is a winner. When the people in the Diaspora have more confidence that their remittances will be used as required, there will be more inflow of remittances and the country will be better for it. Nigerians in the Diaspora are toiling hard to build their futures, hence they can also be rest assured in certainty of coming home to their investments and in the longer term, they will be in better position to support themselves and their relatives as well as make meaningful contributions to their society. Under Meristem Diaspora Trust, all transactions are backed with a Trust Deed, you can monitor your investment and there are flexible exit options in case of decision to withdraw,”  Mrs Mercy Edukugho-Aminah, Managing Director, Meristem Trustees Limited said.

  • Ellah Lakes plans N5b capital injection

    Shareholders of Ellah Lakes Plc are scheduled to consider a proposal to raise about N5 billion new capital through a private placement as part of efforts to restructure the Rivers State-based agricultural company.

    The shareholders will meet later this month to consider many resolutions aimed at increasing the authorised share capital of the company and empowering the board of the company to raise new capital.

    At the Annual General Meeting (AGM) in Port Harcourt, shareholders are expected to approve a resolution increasing the authorised share capital from N60 million of 120 million ordinary shares of 50 kobo each to N1 billion of 2.0 billion ordinary shares of 50 kobo each.

    Shareholders are also expected to ratify a special resolution mandating the board of directors to raise up to N5 billion in debt or equity capital through private placement on such terms and conditions that the directors may deem fit.

    A major private placement may lead to emergence of a new strategic investor in the fish-farming company, largely owned by the Ellah family.

    Incorporated in July 1980, Ellah Lakes was listed on the Nigerian Stock Exchange (NSE) in January 1993. The company has struggled over the years with declining performance. Market analysts said the new capital injection and the current agro-centered government policy could boost the recovery of the company.

    Companies are increasingly recapitalising their operations to strengthen their balance for long-term growth.

    Nigeria’s two largest cement companies – Dangote Cement Plc and Lafarge Africa Plc and two leading healthcare companies-Fidson Healthcare Plc and May & Baker Nigeria Plc – have launched new capital raisers and are expected to conclude the supplementary issue by the fourth quarter.

    Dangote Cement -Nigeria’s most capitalised quoted company and Africa’s largest cement producer – is raising N150 billion in new debt capital to finance its business operations.

    Dangote Cement had recently concluded the first tranche of the N150 billion new capital raising, raising N50 billion in new debt capital. Dangote Cement issued commercial papers of 180 days and 270 days tenors with effective yields of 13.21 per cent and 13.96 per cent.

    According to the company, the net proceeds from the issuance would be used to finance capital expenditure, working capital and general corporate purposes.

    The board of Lafarge Africa has also approved a right issue of up to N82 billion, as part of efforts to reduce the company’s leverage position as well as strengthen its profitability.

    Shareholders of Lafarge Africa had earlier approved a resolution authorising the company to raise additional capital of up to N100 billion as the cement group continues to optimise its balance sheet.

    Fidson Healthcare has launched a N4.5 billion new equity capital fundraiser by issuing new ordinary shares to existing shareholders of the healthcare company.

    The Nigerian Stock Exchange (NSE) has approved the rights issue, paving the way for the company to open application list for the offer.

    Fidson Healthcare will be issuing 900 million ordinary shares of 50 kobo each to existing shareholders at N5 per share. The rights issue will be pre-allotted on the basis of three new ordinary shares for every five ordinary shares held as at the close of business on July 5, 2018.

  • SEC mulls regulatory framework on FinTech

    Securities and Exchange Commission (SEC) would soon roll out a regulatory framework for financial technology (FinTech) products in order to protect the general investing public.

    Acting Director-General, Securities and Exchange Commission (SEC), Ms Mary Uduk, said the apex capital market regulator would seek a balance between transition to a technology-driven capital market and protection of investors.

    Uduk  said the Commission is interested in investments that Nigerians are making especially with the advent of digitalisation.

    “The International Organisation of Securities Commissions (IOSCO) is on it and there is a lot on it already all over the world and we can’t be left behind. We are very much interested in some of the most active areas of Fintech innovation like block chain technology, crypto currencies and how they affect investors,” Uduk said.

    She said as regulators of the capital market, it is the responsibility of the SEC to find out how such investments are going on and if they meet set standards because when investors lose money they will come back to the SEC.

    According to her, the capital market needs to create an enabling environment that is attractive enough for Fintechs to innovate as the market should engage actively with the new trend in technology and provide the adequate regulatory framework for proper adoption of suitable technology.

    Uduk recalled that during the last Capital Market Committee meeting in Lagos, the Committee agreed to set up a committee to draw a Fintech adoption roadmap for the capital market.

    She noted the growing influence of Fintechs adding that the capital market needs to take advantage of Fintech offerings in moving forward.

  • Equities’ return worsens to -16.27% as selloffs persist

    Average loss by investors in Nigerian equities climbed to about 16.3 per cent yesterday as the selloffs at the Nigerian Stock Exchange (NSE) continued to force most divesting investors to sell at lower prices.

    The All Share Index (ASI)- the main value-based index at the NSE and Nigeria’s equities index, dropped further by 0.84 per cent yesterday, depressing the average year-to-date return to -16.27 per cent. With nearly three losers for every gainer, investors ended the five-hour trading session at the NSE with net capital depreciation of N98 billion.

    Aggregate market value of all quoted equities dropped from its opening value of N11.789 trillion to close at N11.691 trillion. The ASI had declined from its opening index of 32,292.79 points to close at 32,022.23 points.

    While investors appeared to engage in considerable bargain-hunting in the banking sector, the consumer and industrial goods sectors saw significant selloffs. All Sectoral indices closed negative with the exception of the NSE Banking Index, which inched up by 0.01 per cent.

    There were 26 losers to nine gainers.  Nestle Nigeria-Nigeria’s highest-priced stock, led the losers with a loss of N81 to close at N1,398. Cement Company of Northern Nigeria followed with a drop of N2.75 to close at N25.10. Conoil lost N2.40 to close at N21.90. Lafarge Africa dropped by N2.30 to close at N20.70. Forte Oil dipped by N1.40 to close at N17.50 while Access Bank and Dangote Flour Mills depreciated by 40 kobo each to close at N7.60 and N8 respectively.

    On the positive side, Guaranty Trust Bank-Nigeria’s largest financial services company, led the gainers with a modest gain of 35 kobo to close at N32.95. United Bank for Africa and Nigerian Breweries followed with a gain of 10 kobo each to close at N7.15 and N84.10 respectively. Unity Bank chalked up 7.0 kobo to close at 85 kobo. Skye Bank rose by 6.0 kobo to close at 67 kobo while Fidelity Bank and Transnational Corporation of Nigeria added 5.0 kobo each to close at N1.56 and N1.13 respectively.

    Total turnover stood at 173.55 million shares valued at N3.71 billion in 3,082 deals. Guaranty Trust Bank was the most active stock with 28.19 million shares worth N929.76 million. Zenith Bank followed with 25.86 million shares worth N514.61 million while Skye Bank placed third with 18.87 million shares valued at N11.18 million.

     

  • MTN repatriation: NSE reviews Stanbic IBTC, Diamond Bank governance

    The Nigerian Stock Exchange (NSE) and other stakeholders have launched an engagement process to review the compliance of Stanbic IBTC Holdings Plc and Diamond Bank Plc to high-level corporate governance standards expected of top-rated quoted companies.

    The review was sequel to the fines imposed on Stanbic IBTC Bank and Diamond Bank by the Central Bank of Nigeria (CBN) for complicity in alleged illegal repatriation of $8.1 billion by MTN Nigeria Communications Limited.

    Stanbic IBTC Holdings Plc-the parent company of Stanbic IBTC Bank and Diamond Bank were among 35 companies that were awarded the Corporate Governance Rating System (CGRS) certification in February 2018. Introduced into the capital market in 2012 and launched in 2014, the CGRS is a joint initiative between the NSE and the Convention on Business Integrity (CBi).

    The CGRS was designed to rate quoted companies and their directors on corporate governance practices. The CGRS was the underlying variable for the creation of the NSE Corporate Governance Index (NSE CG Index). The NSE CG Index declined by 1.32 per cent yesterday, almost a triple of the overall average decline of 0.48 per cent for the entire equities market.

    The Steering Board of the CGRS yesterday stated that it had taken note of the fines and controversies around the alleged illegal capital repatriation of $8.1billion for MTN Nigeria Communications Limited by four banks, including Stanbic IBTC Bank and Diamond Bank.  Executive Director, Regulation, Nigerian Stock Exchange (NSE), Tinuade Awe, is the chairman of the CGRS Steering Board.

    The board noted that “regulatory compliance formed a major part of the requirement for the award of the CGRS certification” and as such it has launched an engagement process with the affected banks.

    “Consequently, the Steering Board is engaging with Stanbic IBTC Holdings Plc and Diamond Bank Plc on this matter, and will inform the investing public on the outcome of its engagement at a future date,” CGRS stated.

    To be certified, the CGRS rates quoted companies through three processes including independent verification; self – assessment by the company; certification of director awareness of their fiduciary duties; and a corporate integrity assessment where perceptions of actual company behaviour are sought from internal and external stakeholders.  A score of 70 percent and above for both the company and individual directors is required for certification.

    At the award ceremony for the CGRS certification, Awe had affirmed that the companies successfully passed the rating test, having scored the required pass mark of 70 per cent.

    She pointed out that the aim of the CGRS rating was to improve the level of corporate governance of listed companies noting that the rating is a developmental index that will help to boost the company’s image and better cooperation when it needs to transact with foreign partner.

    She explained that the self assessment is in three stages which is corporate compliance with its component indicator covering five categories, business ethics and anti corruption, internal and external audit and control, shareholder and stakeholder rights, board structure and responsibilities, transparency and disclosure.

  • Equities hit 15-month low with N155b loss

    Nigerian equities continued on the negative trend yesterday as the stock market reopened to large and open sell orders, which overwhelmed bargain-hunting activities.

    Benchmark indices at the equities market indicated average decline of 1.25 per cent, equivalent to net capital depreciation of N155 billion within the five-hour trading session. The decline depressed the average year-to-date return for Nigerian equities to -12.11 per cent.

    The All Share Index (ASI)-the main index that tracks share prices at the Nigerian Stock Exchange (NSE), slumped to 33,611.69 points, its lowest point in 15 months. The ASI had opened this week at 34,037.91 points.

    Aggregate market value of all quoted equities dropped from its opening value of N12.426 trillion to close at N12.271 trillion.

    With nearly two losers for every gainer, the negative overall market situation was due to widespread selloffs across the sectors, especially within the large-cap stocks in the consumer goods and banking sectors.

    All sectoral indices closed in the red, underlining the market-wide bearishness. The NSE Consumer Goods Index declined by 3.7 per cent. The NSE Insurance Index dropped by 2.1 per cent. The NSE Banking Index dipped by 1.25 per cent. The NSE Oil and Gas Index declined by 0.52 per cent while the NSE Industrial Goods Index slipped by 0.001 per cent.

    Consumer goods’ leader and NSE’s highest-priced stock, Nestle Nigeria led the 22-stock losers’ list with a loss of N145 to close at N1,355. Forte Oil followed with a drop of N1.95 to close at N19.05. Global Spectrum dropped by 60 kobo to close at N5.75. Guaranty Trust Bank lost 50 kobo to close at N34.50. Nigerian Breweries and Zenith Bank declined by 40 kobo each to close at N92.50 and N20.50 respectively while NEM Insurance dropped by 23 kobo to close at N3.08 per share.

    On the positive side, Flour Mills of Nigeria led 10 other gainers with a gain of 50 kobo to close at N22. Custodian Investment rose by 10 kobo to close at N5.50. Honeywell Flour Mills and University Press appreciated by 8.0 kobo each to close at N1.52 and N2 respectively while FBN Holdings and NPF Microfinance Bank added 5.0 kobo each to close at N9.05 and N1.65 respectively.

    Total turnover stood at 137.63 million shares valued at N1.36 billion in 3,104 deals. Diamond Bank was the most traded stock with 30.07 million shares worth N40.4 million. United Bank for Africa followed with a turnover of 16.66 million shares worth N130.87 million while Guaranty Trust Bank placed third with 11.25 million shares worth N390.94 million.

    Market analysts were almost unanimous on the outlook for the market.  “We believe that today’s market performance reflects investors’ bearish outlook on the market as political risks remain heightened in addition to the continued absence of positive drivers. We, however, expect some bargain hunting to drive performance in the near term based on the availability of attractive stocks in the market,” Afrinvest Securities stated.

    Analysts at SCM Capital Markets maintain their “conservative outlook for the market, in the absence of a positive catalyst amidst political risks as the 2019 electoral cycle draws nearer and sustained emerging market weakness”.

  • Stanbic IBTC offers 211.7m shares option for interim cash dividend

    The board of directors of Stanbic IBTC Holdings Plc yesterday indicated that the holding company could issue up to 211.7 million ordinary shares of 50 kobo each as scrip dividend shares if shareholders opt to receive their first half interim dividend in shares.

    Stanbic IBTC Holdings had mid last month announced interim dividend of N10.11 billion for the first half of 2018, representing interim dividend per share of N1, 66.7 per cent above 60 kobo paid for the corresponding period of 2017.

    Under a resolution passed at its extraordinary general meeting in August 2016, shareholders of Stanbic IBTC Holdings may choose to receive dividends declared by the company, up to year 2020, either in cash or as new ordinary shares in the company.

    In a regulatory filing at the Nigerian Stock Exchange (NSE) yesterday, the board of the holding group indicated that the reference price to be used for the conversion of the cash-to-scrip shares option would be N47.75 per share, implying a total of 211.7 million shares for the N10.11 billion cash dividend.

    Under the conversion programme, the reference price to be used in determining any scrip dividend allotment shall be the volume weighted average price (VWAP) of the company’s shares on the NSE for the five business days commencing on the day the ordinary shares are first quoted ex-dividend.

    The qualification date for the interim dividend was August 28, 2018 while the payment date for the dividend is September 26, 2018. Where a shareholder elects to receive the whole or a part of his dividends by way of new ordinary shares, such scrip shares shall only be allotted after receipt of any required regulatory.

    In order to be valid, any scrip dividend election by shareholders, must be made to the company’s Registrars, not later than seven days prior to any dividend payment date, implying that all completed forms for shares dividend option must reach the Registrars on or before close of business on Wednesday September 19, 2018.

    However, shareholders who elect to receive their dividends in cash, are not required to take any action as they will have their cash dividends credited to them on the dividend payment date.

    Key extracts of the audited report and accounts of Stanbic IBTC Holdings for the six-month period ended June 30, 2018 showed that gross earnings grew by 17 per cent while profit after tax jumped by 79 per cent. Gross earnings rose from N97.20 billion in first half 2017 to N114.21 billion in first half 2018. Profit before tax also leapt by 74 per cent to N50.73 billion in first half 2018 compared with N29.17 billion in the corresponding period of 2017. Profit after tax increased to N43.08 billion in 2018 as against N24.11 billion recorded in the corresponding period of 2017. Total assets closed first half 2018 at N1.37 trillion as against N1.39 trillion recorded in December 2017.

    Further analysis showed that the group maintained capital adequacy levels that are significantly above the regulatory limit of 10 per cent. The group’s total capital adequacy ratio for the period closed at 27.4 per cent while the commercial banking entity had a ratio of 23.0 per cent. Group Tier 1 capital adequacy ratio stood at 23.3 per cent with the bank having 18.5 per cent). The improvement in group capital adequacy ratio to 27.4 percent from 23.5 percent in December 2017 was as a result of the significant increase in retained profit.

  • Large-cap stocks drag equities to N189b loss

    After a momentary recovery on Tuesday, Nigerian equities suffered a major decline yesterday as foreign portfolio investors led massive selloffs in stock market’s largest companies. Benchmark indices at the Nigerian Stock Exchange (NSE) showed an average decline of 1.49 per cent, equivalent to net capital depreciation of N189 billion.

    This slump worsened the average year-to-date return to -10.01 per cent. Quoted equities had so far this month lost an average of 1.25 per cent.

    With 26 losers to 20 gainers, the negative overall market position was due to widespread losses, especially losses recorded by large-cap stocks such as Dangote Cement, Guaranty Trust Bank, Seplat Petroleum Development Company and Zenith Bank Plc.

    All indices closed in the negative with the exception of the NSE Consumer Goods Index, which inched up by 0.3 per cent. The NSE Oil & Gas Index declined by 3.2 per cent. The NSE Industrial Goods Index dropped by 2.3 per cent. The NSE Insurance Index depreciated by 1.6 per cent while the NSE banking Index dipped by 1.2 per cent.

    “Going forward, we believe market performance will remain largely bearish as sentiments remain soft,” Afrinvest Securities stated.

    Seplat Petroleum Development Company, NSE’s second highest-priced stock, led the losers with a loss of N47 to close at N603. Dangote Cement, Nigeria’s largest quoted company, followed with a loss of N7 to close at N223. Stanbic IBTC Holdings dropped by N1 to close at N47. Flour Mills of Nigeria lost 80 kobo to close at N21.20. Ecobank Transnational Incorporated, Lafarge Africa and Zenith Bank dropped by 45 kobo each to close at N19.55, N23.05 and N21.45 respectively while Guaranty Trust Bank, Nigeria’s largest financial institution, declined by 40 kobo to close at N36.65 per share.

    On the positive side, Forte Oil and International Breweries led the gainers with a gain of N1 each to close at N20 and N33 respectively. Nigerian Breweries rose by 50 kobo to close at N93.50. C & I Leasing added 27 kobo to close at N2.99 while Fidson Healthcare and Oando chalked up 10 kobo each to close at N5.50 and N5.30 respectively.

    Total turnover stood at 200.28 million shares valued at N2.16 billion in 3,224 deals. United Bank for Africa led the activities chart with 22.48 million shares valued at N180.35 million. Stanbic IBTC Holdings followed with 19.24 million shares valued at N904.44 million while FCMB Group placed third with 19.13 million shares worth N34.93 million.

    “We guide investors to trade cautiously in the short to medium, as selloffs are likely to persist, amidst the absence of a one-off positive trigger, as well as likely negative sentiments of investors, particularly foreign players, as a result of contagion effect of emerging market selloffs, and political concerns ahead of the 2019 election,” Cordros Capital stated.

     

     

  • May & Baker Nigeria to raise N2.45b new equity capital

    May & Baker Nigeria Plc is seeking regulatory approval to raise about N2.45 billion new equity fund by offering new ordinary shares to existing shareholders.

    Regulatory document obtained yesterday by The Nation indicated that May & Baker Nigeria Plc plans to float a rights issue of 980 million ordinary shares of 50 kobo each at N2.50 per share.

    The rights issue has been provisionally pre-allotted on the basis of one new ordinary share for every one ordinary shares held as at the close of business on Tuesday, September 4, 2018.

    Authorities at the Nigerian Stock Exchange (NSE) confirmed the receipt of the application from the healthcare company.

    The confirmation came on the heels of recent report by The Nation that Nigeria’s largest cement and healthcare manufacturing companies, including May & Baker Nigeria, plan to raise N240 billion new capital to support growing business and restructure their balance sheets.

    Shareholders had in 2014 empowered the company to raise up to N3.2 billion new equity capital.

    Chairman, May & Baker Nigeria Plc, Lt. Gen Theophilus Danjuma (rtd), recently told shareholders that directors of the company believed that the time is now right to raise the funds to enable the company harness new opportunities.

    “Therefore our rights issue will soon open and I hope shareholders will take up their rights to support our company in achieving its new vision. We shall all reap the rewards in the immediate future and beyond,” Danjuma said.

    He outlined that the company has envisioned a new vision that will see it dominating the Sub-Saharan Africa (SSA) markets in line with its new vision of being the leading healthcare brand in SSA.

    According to him, the new five-year strategic plan of the company entails focus and expansion along the company’s competitive advantage of healthcare and it will soon begin to establish footprints and seek dominance in this area in the SSA region.

    “Your company has turned the corner and is now solidly on the path of growth and strong profitability. Our plan in the next few years is to focus on driving our new vision, strategic goals and establishing our footprint as a leading healthcare brand in Sub-Saharan Africa. The company will strive to acquire required competencies in related business areas, expand its regional reach to explore new markets, improve capacity utilization at our WHO GMP pharmaceutical facility in Ota and continue to deliver value and returns on investments to our loyal shareholders,” Danjuma said.

    Key extracts of the interim report and accounts of May & Baker Nigeria for the six-month period ended June 30, 2018 showed that total comprehensive income-which included profit after tax and extra ordinary income rose to N601.37 million in first half 2018 as against N94.86 million recorded in the comparable period of 2017.

    The 534 per cent increase in net distributable earnings has raised strong prospect of possible significant increase in dividend payout to shareholders. The healthcare company had increased its dividend payout by 233 per cent for the 2017 business year after it rounded off the year with significant growths in profitability.

    The report showed a well-rounded improvement in the bottom-line of the healthcare company as key underlying profitability margins improved considerably during the period. Pre-tax profit margin-which measures average pre-tax profit per unit of sale and serves as benchmark for profitability of the company, tripled from 3.13 per cent in first half 2017 to 8.44 per cent in first half 2018. Gross profit margin had increased from 30 per cent in first half 2017 to 33 per cent in first half 2018 while operating margin also grew to 12.7 per cent in 2018 as against 10.11 per cent recorded in corresponding period of 2017.

    Market analysts said the increase in gross margin, operating margin and pre-tax profit margin showed that the company’s performance in the first half was driven by improved business operations, increased efficiency and better cost management.

    The report showed that group’s profit before tax rose by 178.76 per cent to N388.90 million in first half 2018 as against N139.51 million recorded in comparable period of 2017. Profit after tax also leapt by 178.78 per cent from N94.86 million to N264.45 million. Earnings per share thus increased from 9.68 kobo in first half 2017 to 26.98 kobo in first half 2018. With the addition of N336.92 million gain from discontinued operations of its food business , total net earnings jumped to N601.37 million in first half 2018 compared with N94.86 million recorded in first half 2017.

    Group operating profit had increased by 29.9 per cent from N452.25 million to N587.35 million. Gross profit also rose from N1.34 billion to N1.52 billion. Group turnover had increased from N4.47 billion in first half 2017 to N4.61 billion in first half 2018. Further analysis had shown that the company’s finance costs reduced by 36 per cent from N326.87 million in first half 2017 to N209.34 million in first half 2018.

    Business segmentation analysis showed that the performance of the company was driven by its core pharmaceuticals business, which saw 22 per cent growth in sales during the period. The company recorded improvement in sales in all its principal geographical business areas of Lagos, West, East and North.