Background
Fidson Healthcare plc is one of the topmost healthcare companies in Nigeria today. It commenced operations in March 1995, with a drive to change the healthcare services landscape with their specially designed brands and services.
For 15 years, Fidson has continued to play a defining role in the industry landscape in Nigeria. The company’s authoritative influence and emergence as a front-line player in the healthcare and pharmaceutical sector lends credence to the quality and efficiency of their products and services. Bagging the ISO 9001:2000 Certification, Fidson boasts of a quality system that attests to the best of global practices.
Fidson Healthcare’s dominance was further emphasised by being named winner of the prestigious Financial Standard (FS) pharmaceutical sector leader Award for 2008. Fidson Products Limited, the wholly-owned subsidiary, is spear-heading the diversification into Fast Moving Consumer Goods (FMCG).
Offering an array of unique products designed to meet the day-to-day needs of consumers, the company is remarkably deliberate in it efforts to impact the marketplace in the near future.
Fidson products are Asomex, Astymin, Astyfer, Avipo, Ciprotab, Cutenox, Ferobin, Flutex, Gascol, Meprasil (omeprazole) capsules, Tribotan, Virex, ZETGEL, Simvat, Synject, etc.
Financial results for 2013
Fidson Healthcare, a Nigerian drug maker, recorded double digit growth in revenue in line with analysts’ expectation. The company’s investment in cardiovascular, antiretroviral, anti-diabetic and infusion drugs, for the Nigerian population of over 170 million is driving top-line growth as analysed here under.
For the year ended December 31, 2013, Fidson increased its revenue by 29 percent year-on-year (y/y) to N9.24 billion from N7.16 billion same period of the prior year (FY12). The company is not relenting on the above results as it plans to aggressively increase it share of the market by constructing a N5 billion facility that will provide 10 infusion drugs, which will increase the number of drugs produced by the company to 140, according to a statement released by the company in 2013.
Fidson has started an expansion programme in 2009, after raising N3.5 billion in a private placement. This will further spur growth of the Nigeria drug maker.
However, the company was unable to translate the above performance to bottom-line growth as profit before tax (PBT) slumped by 54 percent to N249.59 million in FY13, compared with N540.080 million as of 2012FY.
Profit after tax (PAT), in the review period, also fell by 25 percent y/y to N154.98 billion, as against N206.88 billion as of FY12. Earnings per share fell by 18 percent to 10k in FY13 from 18k as of FY12.
Cost of sales margin moved to 44.30 percent in FY13, as against 43.15 percent as of FY12. It means that for every one naira of sales generated the company spends 044k on input cost.
Gross profit margin increased by 25.52 percent to N5.11 billion in FY13, from N4.07 billion as of 2012FY, thus gross margin dipped to 55.30 percent in 2013 compared with 56.60 percent in 2012.
The above result calls for urgent cost reduction mechanisms if the company wishes to improve on its profit position. Operating expenses also spiked by 38 percent to N4.50 billion in FY13, compared with N3.27 billion as of 2012FY, while operating expense margin jumped to 48.70 percent in 2013, from 45.6 percent in 2012.
Fidson’s total assets were up by13.57 percent y/y to N12.24 billion from N10.78 billion, as of 2012FY.
Return on equity on average equity was 2.95 percent, while return on average assets also stood at 1.34 percent in the review period.
The above analysis means that a shareholder receives 295k in net profits for every N100 invested in net assets. Sales turnover moved to 176k in FY13, as against 1.37 as of 2012FY. It means that Fidson producing 176k of sales for N100 capital employed in Net assets.
Share performance and outlook
The share price of the company has increased by 98.95 percent in the past one year to close at N2.83 on May 2, 2014, on the floor of the Nigerian Stock Exchange, and market capitalisation was N4.24 billion on the same day. The company currently trades at a price-to-book and price-to-sales ratio of 0.81x and 0.59x, respectively.
BALA AUGIE
