May & Baker Nets N370.868m Profit, Offers N0.20 Dividend

Pharmaceutical and health products maker- May & Baker Plc, on Wednesday presented its audited financials for 2017 ended December 31, with a return to profit, despite a slow revenue growth, even as finance costs inched further.
Sales revenue rose to N9.352bn from N8.469bn, representing an increase by about N883.277m or 10.42%, of which sales of pharmaceutical fetched the bulk of revenue at N7.994bn, up from N6.297bn in 2016; followed by foods (the company’s noodles’ business) contributed N1.295bn, down from N2.111bn, while beverages (packaged water) added N62.212m, as against the previous N59.658m.
On geographical basis, the company’s Eastern Nigerian market contributed the lion’s share of sales revenue, accounting for N3.703bn, up from N3.445bn; followed by the Lagos market with N3.001bn, as against N2.794bn; ahead of N1.567bn from the West, compared with the prior year’s N1.233bn; while the North lagged behind with N1.08bn, which increased from N996.03m.
Cost of sales for the period limped N141.554m or 2.38% up from N5.933bn in the corresponding period of 2016 to N6.075bn.
Gross profit rose to N3.277bn from N2.535bn, while other operating income dropped from N46.891m to N36.053m; distribution, sales and marketing expenses climbed to N1.439bn from N1.137bn; and administrative expenses to N638.177m, compared to N624.058m in the 2016 full year.
Operating profit grew to N1.235bn from N820.867m, representing a rise by about N415.106m or 50.56%; investment income jumped to N52.016m from N23.511m; even as other losses stood at N47.295m, as against the prior year’s N20.87m.
Finance costs grew to N635.071m from N519.309m, comprising interest on bank overdrafts and loans of N490.312m from N434.534m; and interest on loans from related party of N144.76m, up from N84.775m. The related party loan has to do with N2bn obtained on July 9, 2012 at below market interest rate of 11% from TY Holding Limited controlled by General Theophilus Danjuma, the company’s chairmand and single largest shareholder with 26.01% stake
This resulted in profit before tax of N605.622m, up by N259.683m or 75.06% from the N345.939m recorded in the corresponding full-year of 2016.
With income tax expense dropping to N234.756m from N387.033m, net profit for the period stood at N357.181m from a loss of N38.712m, representing Earnings Per Share of 38 kobo, as against the previous four kobo.
The directors have recommended a dividend of 20 kobo per share, amounting to N196m from its net profit.

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