MICHEAL ANI
GlaxoSmithKline plc, a player in the Fast Moving Consumer Goods (FMCG) industry and health care space, has taken its shareholders through the bright side, thanks to growth in the GSK reserve level over the past few years, the accumulation of profits and the recent income from the divestment of its drinks business.
The drug maker declared a special dividend of N8.4 billion, representing N7.10 and a final dividend of 40k per share, respectively, for its shareholders that sent dividend yield to as high as 30 percent in the year ended December 2017
In the year under review, GSK revenue increased from N14.3 billion in 2016 to N16 billion. Profit before tax also increased from N185 million in 2016 to N1.1billion in 2017.
However, profit after tax fell to N486 million from N2.3 billion declared in the same period of 2016 due to higher tax payments and no fresh revenue from the disposal of the drinks business.
The firm also continued in a positive momentum, especially in its bottom line going by its 2018 first quarter unaudited financial statement.
The firms profit after tax (PAT) increased astronomically by 3026 percent, despite revenue increasing slightly by 9.5 percent, which was as a result of declining operating, growing sales for the company’s products, and a positive currency effect.
PAT surged from N8.26 million in the first quarter of 2017, to N258.3 million in Q1 2018, surpassing analysts and market expectations.
The firm’s share price headed north after it announced the payment of special dividend to shareholders.
GSK share price has risen 11.06 percent this year, according to data compiled by BusinessDay, outperforming the NSE All Share index at 7.85 percent. It was priced at N21:25 as of the close of trading in Lagos on Thursday, with a market capitalisation standing at N25.412 billion.
Speaking at its 47th AGM yesterday in Lagos, Edmund Onuzo, chairman, Board of Directors, said the firm was committed to maximising its investment.
“For us as a company, maximizing shareholder’s return is high on our agenda. Given our current cash position and with money set aside for local manufacturing investment, returning cash back to investors via dividends is in line with this thinking on returns.
“Following the successful divestment of our drinks business, we have been able to cash-in on the returns from the divestment. We have tightened our portfolios, drove investment behind our power brands and we are now better focused and aligned with our global business. We are glad this has yielded the right dividend particularly for our esteemed shareholders,” Onuzo said.
In 2017, the firm upgraded its facilities across its production lines and drove various innovative projects to increase reach in order to deliver long-term growth in Nigeria. On the change in leadership at GSK, he said it was part of the leadership succession plan of the company.
In line with the changes, he reassured the shareholders that “GlaxoSmithKline is committed to Nigeria for the long term. We have confidence in the continuing growth prospects of the business and we are focused on restructuring for the benefit of all our stakeholders.”
At the meeting, the Board recommended for approval a final dividend of N478 million, representing 40k per 50k share, and a special dividend of N8.491 billion, representing 7.10 per share to be paid to shareholders. The shareholders approved the Board’s recommendation and lauded the Board for its performance.
