Neimeth Pharmaceuticals Fetches Investors 24% Capital Growth

Goddy Egene

Renewed demand for the shares of Neimeth International Pharmaceuticals Plc at the stock market led to an appreciation of 24 per cent in the price last week.

The equity appreciated from N0.65 N0.81 per share, indicating that investors recorded a capital gain of 16 kobo or 24 per cent. Market operators said investorsí renewed positive sentiments stemmed from current attractive price weighed against its future prospects.

The company bounced back to profitability, recording a profit after tax of N65 million for the year ended September 30, 2016, compared with a loss of N335.684 million in 2015. Neimeth has had a rough patch in recent times following the challenging operating environment. However, the Chairman of the company, Dr. ABC Orjiako, had at its last annual general meeting (AGM), announced plans to overhaul the corporate structure of the company in such a way that it will refocus it for a meaningful and sustainable growth.

Going by the 2016 performance of the company, the restructuring efforts have started to yield fruits as the company has returned to profitability for the full year.

Turnover rose from N1.461 billion in 2015 to N2.002 billion in 2016, showing an increase of 36 per cent. Gross profit grew from N684.6 million to N1.225 billion, while administrative expenses reduced from N600 million to N527 million. The company also reduced finance costs from N92 million to N89.6 million in 2016. The company ended with profit of N95.361 million compared with N315.77 million loss in 2015.

Explaining the impressive performance, the Managing Director/Chief Executive Officer, Dr. Ebere Igboko-Ekpunobi, who is the first female CEO of the company, said it was a fallout from the companyís three strategic imperatives anchoring on a short term transformation, cost reduction and optimising efficiency.

According to her, the company employed three strategic imperatives to anchor its transformation in short -term. They are: revitalise sales and generate more revenue, reduce costs and optinmise efficiency and transform the organisational culture towards a new Neimeth.

She said cost of sale was 38 per cent of sales, enabling a 62 per cent production margin, which exceed the budget expectation of 56 per cent as a proportion of sales and last year’s performance of 47 per cent production margin.
Igboko-Ekpunobi disclosed that significant investments were made to re-engineer manufacturing operations.

New practices were adopted which contributed to better inventory management, production planning and coordination between manufacturing and sales activities most importantly, and the organisation culture was transformed toward a new Neimeth, she stated.