The board of directors of May & Baker Nigeria has recommended a dividend of N58.8 million for the year ended December 31, 2015. The dividend, which is 20 per cent higher than what was paid the previous year, was recommended following an increase in the bottom-line of the company despite the challenging operating environment.

According to the audited results of the company, profit before tax rose by 41 per cent from N101.2 million in 2014 to N142.4 million in 2015. Net profit growth was, however, constrained by a total tax burden of N74 million comprising regular and deferred taxes. As a result, profit after tax increased by 7.4 per cent from N63.34 million to N68.03 million.

The company’s sales grew by 7.8 per cent, from N7.02 billion in 2014 to N7.57 billion in 2015. While distribution expenses reduced by 11 per cent, sales and marketing expenses remained flat. The company also contained finance charges which have for over four years now remained a major drag on the company. Finance cost reduced from N603.87 million in 2014 to N588.18 in 2015. The management also reined in administrative expenses which reduced by 8.4 per cent from N641.33 million in 2014 to N587.3 million in 2015.
Analysts identify working capital as a major handicap of the company, which has led its dependent on bank borrowing with its crippling cost of funds. To reduce the reliance on bank borrowing, the company had in 2014 received that approval of shareholders to inject more equity funds into the business.

“This would further improve the bottom-line and ensure sales growth results into higher earnings for shareholders. As approved by the shareholders in 2014, the company will soon actualize its plan to raise additional N3.2 billion through rights issue or private placements,” the company said.

Market analysts had said the 2015 results needed commendation considering the fact that the Nigerian pharmaceutical industry in particular and manufacturing in general was seriously challenged due to an inclement operating environment.

The year 2015 started with the uncertainties of general elections which impacted distribution and sale of products negatively, while the last quarter of same year witnessed a shortage and high cost of foreign exchange resulting in the inability of companies to procure necessary material inputs for production.