May & Baker gets approval to raise N3b new capital, sale of asset

May & Baker Nigeria Plc will soon launch its much-awaited rights issue as shareholders of the healthcare company, at the weekend, approved the increase in the authorised share capital of the company to N3 billion.

At the meeting, shareholders voted unanimously to increase the authorised share capital from N1.9 billion of 3.8 billion ordinary shares of 50 kobo each to N3 billion of six billion ordinary shares of 50 kobo each.

The shareholders also authorised the board of the company to sell or lease any one of the company’s two properties located at Sapara Street, Ikeja Lagos.They had in 2014, empowered the company to raise N3.2 billion new equity capital at the yearly general meeting, as well as the recapitalisation of the business through the injection of fresh equity capital into the business.

Addressing the shareholders, Chairman, May & Baker Nigeria Plc, Lt. Gen Theophilus Danjuma (rtd), said the board of the company believes 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 a new vision that will see it dominating the Sub-Saharan Africa (SSA) markets in line with its new plan 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 utilisation at our WHO GMP pharmaceutical facility in Ota and continue to deliver value and returns on investments to our loyal shareholders,” Danjuma said.

He pointed out that in line with its new vision and following shareholders’ approval, given at the Extra-Ordinary General meeting in November 2017, the company has successfully completed the divestment from its noodles business in the first quarter of 2018, adding that the gain from the divestment will be recorded in the current year results.He said streamlining the company’s activities along its core area of healthcare will put it in a position to deliver stronger profits in the future.He noted the improved performance of the group’s businesses as operating subsidiary – Osworth Nigeria Limited grew its revenue by 29 per cent from N165 million in 2016 to N213 million in 2017 and grew profit after tax by 80 per cent from N7.6 million in 2016 to N13.7 million in 2017.

“I am equally pleased to report more good news on the progress made with Biovaccines Nigeria Limited, our Joint Venture project with the Federal Government for the production of vaccines. The board of Biovaccines was inaugurated on Janhelenstine200218 and the company is gearing fast to commence business. I am optimistic that this investment will succeed not only to the benefit of investors but also for the good of the country,” Danjuma said.Shareholders who spoke at the meeting commended the board and management of the company. Amidst encomiums, shareholders approved the payment of a dividend per share of 20 kobo.

The Founder, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, said the continuing increase in dividend payout is a pleasant trend that reassures shareholders that the future of their investments is bright.He said shareholders would support the company in its quest to recapitalise urging the board to carry shareholders along in the process of determining the details of the offer.

The Managing Director of the company, Nnamdi Okafor, said the company decided to optimise its assets by selling the dormant property and reinvest the proceeds in development of its Abuja property and acquisition of another property around its Ota manufacturing complex.He said the company realised N775 million from the divestment of its noodles business noting that the company will start the construction of its vaccines factory by the third quarter of 2018.

Audited report and accounts of May & Baker Nigeria for the year ended December 31, 2017 showed that turnover grew by 10 per cent from N8.5 billion in 2016 to N9.4 billion in 2017. Gross profit grew by an impressive 29 per cent from N2.5 billion in 2016 to N3.3 billion in 2017. Cost containment strategies saw cost of sales ratio declining to 64.91 per cent in 2017 from 70.0 per cent in 2016. Earnings margins followed the same growth pattern as the company earned 12 kobo in profit from every Naira it invested.Profit before tax grew by 75 per cent from N346 million in 2016 to N606 million in 2017 while profit after tax position jumped by 1002 per cent from a loss position of N41 million in 2016 to a profit after tax of N371 million in 2017.