By Chioma Obinagwam
Fidson Healthcare Plc, Nigeria’s leading indigenous pharmaceutical company, has reiterated its resolve to retain its leadership position among its peers in the industry.
The chairman of the company, Felix Ohiwerei disclosed at the occasion of its ‘Facts Behind the Figures’ held on the Nigerian Stock Exchange (NSE) on Wednesday.
“Our key priorities is to ensure that our key strategies are achieved. One key objective we are focusing on is to ensure that we remain competitive in the coming years,” he said.
In consolidating its strategic stance, the company is currently at the capital market to raise N3 billion through a rights issue of 750 million shares at N4 per share.
According to the company, proceeds of the Rights Issue,which opened on March 6, 2019 and closes on Tuesday April 9, 2019, will be used to pay down some of its expensive outstanding loans as well as its working capital needs.
Corroborating, head of Finance and Accounts of Fidson Healthcare, Imokha Ayebae said, “The proposed rights is being undertaken is to enable Fidson optimise it’s capital structure by deleveraging it’s balance sheet, thereby reducing the financing costs and strengthening its ability to maximize capacity utilization at its World Health Organization (WHO) compliant manufacture facility.”
“Going forward, Fidson seeks to refinance its expensive short-term debt with proceeds from the Rights Issue as well as cheaper, long-term debt with the target to reduce the average cost of debt from 18 percent to 13 percent,” he added.
Ayebae further stated that the company, which has recorded a robust revenue growth of 45.6 percent Compound Annual Growth Rate (CAGR) between 2016 and 2018, targets a revenue growth of N35.13 billion in the next five years as well as growing its Profit Before Tax (PBT) to N5.97 billion within the same period.
More so, having maintained a consistent dividend payout ratio of 21.3 percent, the head of Finance and Accounts at the company, noted that it hopes to improve the payout ratio to 30 percent in the coming years.
In acuatualising the projections, he disclosed that the company would be leveraging on six key strategic imperatives, which include lowering finance costs, energy cost savings, elimination of middle men, increase in product prices, increased capacity utilization and introduction of new products.
Still on dividend payout, Confiance News gathered that the company declared a final dividend of 15 kobo per 50 kobo ordinary share for the financial year ended December 31, 2018; having paid out a total of N1.9 billion as dividends to its shareholders in the last 10 years.
Further on the offer, the Chief Executive Officer (CEO) of the Fidson Healthcare, Fidelis Ayebae, dispeled rumours of a Private Placement option if the offer is not fully subscribed.
Though quite optimistic of a 100 percent subscription, he said, “We will never go back to Private Placements. The board have ruled against it, shareholders have kicked against it. We will never go that that route. There’s no hidden agenda. Unless, the advisers to the issue advise otherwise.”
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