H1, 2019 Result: May and Baker Nigeria Plc Grows Bottom-line by 10%


Thursday, September 05, 2019 /  12.00PM /  May & Baker


May & Baker Nigeria Plc grew its bottom-line by 10 per cent in the first half of this year as pre-tax profit rose to N427.69 million in the first six months of the year.

The unaudited report and accounts of the company for the six-month period ended June 30, 2019 released on the Nigerian Stock Exchange (NSE) showed an overall improvement in the profitability of the healthcare company.


Healthy Bottom line margins

Underlying profitability ratios came out stronger in the first half of 2019, indicating a fundamental strength in the operations of the business. Pre-tax profit margin- which serves as benchmark to measure profitability, increased from 8.44 per cent in first half 2018 to 10.54 per cent in first half 2019. Net profit margin- which showed value creation for shareholders, also improved from 5.73 per cent in first half 2018 to 7.17 per cent in first half 2019.

Profit before tax rose to N427.69 million in first half 2019 compared with N388.90 million in first half 2018. Profit after tax also rose correspondingly from N264.45 million to N290.83 million. The company had reduced finance costs, which had been a major drag on the bottom-line, by 47.5 per cent from N388.90 million in first half 2018 to N109.93 million in first half 2019.


Top line Depression

In the midst of general slowdown in the healthcare industry and the tough operating environment, May & Baker Nigeria recorded a drop in turnover of N4.06 billion in the first half 2019 as against N4.61 billion in first half 2018. Managing Director, Mr. Nnamdi Okafor said the company has continued to show resilience and noted that the revenue decline was due to the discontinuation of some key products in compliance with industry-wide regulatory directives and the sale of the noodles business.

But the balance sheet of the company emerged stronger with improved liquidity and capacity to sustain the company's long-term growth plan. Total assets rose by 47.55 per cent to N10.55 billion in first half 2019 as against N7.15 billion recorded in first half 2018. Non-current assets had grown by 30.16 per cent from N3.68 billion to N4.79 billion while current assets had increased by 65.99 per cent from N3.47 billion to N5.76 billion. Shareholders' funds grew by 45.4 per cent from N3.70 billion to N5.38 billion. The company had recently successfully raised N1.86 billion through a rights issue.


Keeping Debt At Bay

Mr. Okafor pointed out that the company had invested the net proceeds from the recent rights issue to reducing its short-term debt which had helped to reduce its

finance cost burden, building a dedicated plant for one of its major products and additional capital injection in Biovaccines Nigeria Limited, its joint venture with the federal government for the production of vaccines.

He said aggressive marketing and expected expansion of the company's product portfolio from the recent strategic investments will ensure steady growth in the top-line in the years ahead.

He noted that the company is investing in a number of new pharma, nutraceutical and herbal products that will help to diversify revenue base.

"We remain focused on our growth plan to become a regional healthcare hub with strong and wide footprints in the sub Saharan market. We now have a stronger base for growth and our shareholders should expect improved performance in the period ahead," Okafor said.


Key Highlights

Revenue declined by -12.0% to N4.05bn from N4.60bn in the previous quarter.

Profit Before Tax grew by 10.0% to N427.7m.

Porfit After Tax grew by 10.0% to N290.82m.

Net Assets also grew by 45.1% to N5.37bn from N3.70bn as at December 31, 2018.


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