Directors of Neimeth International Pharmaceuticals Plc have expressed determination to grow the turnover of the company to the N4 billion mark in the immediate future.
At the annual general meeting in Lagos, shareholders unanimously approved the balance sheet restructuring that enables the company to offset accumulated losses with reserves, thus putting the company in good stead to declare dividend from current net earnings.
Shareholders gave the board of the company the nod to reduce the share premium account of the company from N1.02 billion to N122.439 million, with the reduced amount of N898.164 million being credited to a capital restructuring reserve account and applied to write off accumulated losses.
Shareholders commended the improvements in the operations of the company. Key extracts of the full-year audited report and accounts for the year ended September 30, 2019 and the first quarter of this current business year period ended December 31, 2019 had shown sustained growth in both sales and profitability.
Founder, Independent Shareholders Association of Nigeria (ISAN), Sunny Nwosu commended the management and board of the pharmaceutical company for the performance in recent period noting that the balance sheet restructuring was in the interest of shareholders.
Another shareholder, Matthew Akinlade expressed confidence in the new management of the company citing recent growths in performance indicators.
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He said shareholders are hopeful that this effort will soon translate into returns in terms of dividend payment.
Addressing the shareholders, Chairman, Neimeth International Pharmaceuticals Plc, Ambrose Orijiako reiterated the commitment of the board and management to shareholders’ value creation.
He assured that the directors would not rest until there is return for investment of shareholders in the company, promising the shareholders dividend in the nearest future.
He said company had, in 2019, began the articulation of strategies meant to drive vigorous expansion initiative, adding that the company would launch a five-year strategic plan to reposition the company to play a greater role in the wider healthcare industry and ensure good returns on investment for shareholders.
Speaking further on the strategic direction for 2020-2024, Managing Director, Neimeth International Pharmaceuticals Plc, Matthew Azoji, said the strategic focus of the company in years ahead is to initiate bold and gradual expansion initiative that would see the company increasing market share in the healthcare industry.
He said the five-year strategic plan would guide the company’s vigorous expansion programme, which include the upgrade of the company’s factory at Oregun, Lagos state; development of new manufacturing facilities and expansion of the company’s marketing drive to Sub-Saharan Africa.
He added that to achieve the expansion plans, more investments would be needed in course of the five -year period, thus shareholders might be called upon for support.
Azoji said part of the new strategic focus of the company is to partner with local and international brand owners n the area of contract manufacturing.
“We have excess capacity in some product lines and challenges in others. We plan to engage in contract manufacturing for other companies for those lines we have spare capacity and use that to grow our turnover. We also plan to secure the good manufacturing practice (GMP) certificate of the World Health Organisation,” Azoji said.
The audited results showed that Neimeth’s turnover rose from N2.27 billion in 2018 to N2.37 billion in 2019. Gross profit also indicated similar modest growth rising from N1.16 billion in 2018 to N1.20 billion in 2019. Operating profit rose by 47.9 per cent to N413.38 million in 2019 as against N279.42 million in 2018. Finance costs also declined from N112.96 million to N108.9 million. Profit before tax jumped by 82.9 per cent from N166.46 million in 2018 to N304.44 million in 2019. After taxes, net profit increased by 48.7 per cent from N148.02 million to N220.15 million. With these, earnings per share rose by 50 per cent to 12 kobo in 2019 as against 8.0 kobo in 2018.
Performance ratios underscored significant improvements in the profitability of the company. While gross profit margin dropped from 51.1 per cent in 2018 to 50.6 per cent in 2019 due to industry-wide headwinds, operating profit margin, which denotes the company’s managerial ability to curtail headwinds and drive core business operations profitably, improved by five percentage points from 12.3 per cent in 2018 to 17.4 per cent in 2019. Pre-tax profit margin-which measures untaxed profit per unit of sales, nearly doubled from 7.3 per cent in 2018 to 12.8 per cent in 2019. Net profit margin, after taxes, also improved from 6.52 per cent in 2018 to 9.28 per cent in 2019.
