May & Baker posts N601.37 million half-year profit

For the six-month period ended June 30, 2018, May & Baker Nigeria Plc posted a profit after tax and extra ordinary income of N601.37million against N94.86million recorded in the corresponding period of 2017.

A statement from the company attributed the improved performance to strong growth trend that also saw it increasing dividend payout by 233 per cent for the 2017 business year.

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

Also, the half-year 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, 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 H1 2017 to 33 per cent year-on-year, while operating margin also grew to 12.7 per cent in 2018, against 10.11 per cent recorded a year earlier.

The report showed that group’s profit before tax rose by 178.76 per cent to N388.90million in H1 2018 against N139.51million recorded in comparable period of 2017.

Earnings per share also increased from 9.68 kobo in H1 2017 to 26.98 kobo year-on-year.

With the addition of N336.92million gain from discontinued operations of its food business, total net earnings jumped to N601.37million in the review period compared with N94.86million recorded a year ago.

Business segmentation analysis showed the company’s performance was driven by its core pharmaceuticals business, which saw 22 per cent growth in sales during the period.

The Managing Director, Nnamdi Okafor, said the higher turnover in 2018 was achieved despite the discontinuation of a significant arm of its business responsible for about 20 per cent of turnover in 2017.

He said the result demonstrated the long-term sustainability of the growth strategy, and the continuing efficiency of its world-class pharmaceutical manufacturing complex in Ota, Ogun State, while exploring additional opportunities for expansion of the core healthcare business in Nigeria and beyond.

“Our many growth initiatives are paying off and we are happy that the results have proved us right. With improvement in macroeconomic environment, we will continue to improve on our performance with a view to creating greater value for our shareholders,” Okafor said.

He noted that the imminent commencement of operations of Biovaccines Nigeria Limited, and ongoing efforts to turn the company’s world-class manufacturing facility in Ota, into a hub of pharmaceutical manufacturing in West Africa, hold great prospects for the group.