By Nkiruka Nnorom
FIDSON Healthcare Plc has said it plans to grow its pre-tax profit by 73.5 percent in the next five years to December 31, 2023 to N5.97 billion from N3.44 billion at the end of 2019 financial year.
The company also said it is targeting 75 percent revenue growth to N35.13 billion from projected N20.08 billion in 2019.
Presenting, the company’s ‘Facts behind Figures’ at the Nigerian Stock Exchange, NSE, the Managing Director, Mr. Fidelis Ayabae, said the company is on track to achieve the target with the deployment of the proceeds of its on-going N3 billion Rights Issues. The Rights Issue, according to him, would help the company to optimise its capital structure by deleveraging its balance sheet, thereby reducing the financing cost and strengthening its ability to maximise capacity utilisation at its WHO compliant manufacturing factory.
Already, he said the company has secured N2 billion facility from the Bank of Industry, BOI, to buoy its working capital.
Additionally, Ayabae said the company intends to introduce a number of new high value products with very good volume in order to maximise production capacity while also increasing revenue and profitability.
“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 to debt from 18 percent to 13 percent.
“In addition, volume growth will be enhanced by the increased capacity of the factory with increase in production time to 24 hours following a switch to gas generation. Going forward, the plan is to directly import its raw materials, which is expected to reduce cost of raw materials by about 20 percent while also negotiating improved pricing from suppliers and adjusting prices of some products upwards. The direct importation of raw materials will take advantage of Central bank of Nigeria (CBN) retail window to reduce exchange rate costs,” he said.
He assured that Fidson committed to delivering consistent returns to its shareholders, saying that it has paid out a total of N1.9 billion in the last 10 years with an average dividend yield of 6.5 percent over the period. According to him, Fidson seeks to increase its payout ratio to up to 30 percent and is poised to continue to return greater value to investors.
Also speaking, the chairman, Segun Adebanji, said: “We have strong partnership with various overseas and local partners in order to deliver unique products and cost effective services. We also have three years tax holiday, which we have not started implementing and it could be extended by another two years. So, we hope to plough back these monies into our operation. There is also an upward patronage from the government, which we hope will continue.”