Rights Issue: May & Baker seriously woos subscribers, promises 2018 dividend

The Chief Executive Officer of May & Baker Plc, Mr Nnamdi Okafor, in an obvious attempt to entice its shareholders, recently promised that investors who subscribe to the company’s new rights issue will stand a chance of receiving dividends by the end of the 2018 financial year.

He further wooed shareholders by assuring them that the company has been consistent with dividend payment, which we can confirm. He also bragged about May & Baker’s capitalisation, which according to him makes the company “an investment haven”.

“The shareholders who will subscribe to the new shares being offered will have the benefit of reaping dividend to be declared this 2018 financial year. Note that May & Baker has consistently paid dividends over the years.” – Okafor

The company is trying to raise capital for expansion purposes

As we reported, May & Baker Plc, last month, sought regulatory approval for the issuance of some 980 million ordinary shares which would be sold at N2.50 per share. This move is part of the company’s efforts to raise about N3 billion new equity fund, which would facilitate expansion efforts at the company.

Speaking recently about this expansion effort, the company’s CEO said the rights issue will help to fast-track some key projects. In his words

“Our plan is to invest the proceeds of the Rights Issue to some key projects. For instance, over N400 million of the expected N2.45 billion will be used to finance part of our equity in Biovaccines Nigeria Limited, the joint venture company for local vaccine production. We are also going to invest over N500 million in capacity expansion for one of our cash cow products, paracetamol for which we are building a dedicated plant.”

Financially, the company is picking up from last year’s slump

According to the company’s half-year 2018 unaudited financial report, revenue climbed to N4.6 billion as against the N4.4 billion that was recorded during the same period in 2017. Profit after tax for the 2018 half-year period also increased to N264 million compared to what obtained prior.

Mr Okafor feels the company could perform better financially if the economy were to be favourable.

In the meantime, the company’s stock is trading at N2.24 on the Nigerian Stock Exchange.

May & Baker Plc is one of the leading drug manufacturing companies in Nigeria which was founded in 1944.

Its rights issue is currently ongoing and would close on Wednesday, November 28, 2018.

 

Source: Nairametrics

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