BusinessDay 10 Apr 2018

Tuesday 10 April 2018 BUSINESS DAY 13
COMPANIES
& MARKETS
Company news analysis and insight
AIICO Insurance
disappointing performance
could stir up a hornet’s nest
Pg. 14
May and Baker’s strategies begin
to bear fruit as margins improve
BALA AUGIE
May and Baker
Nigeria
Plc’s efforts
to harness
the potential
of recent investment
and cost control mechanism
has yielded fruit as the drug
maker was able to turn each
Naira invested in sales into
higher profit.
The company’s stellar
performance in the period
under review amid a tough
and unpredictable macroeconomic
environment
validates its growth strategy.
For the year ended December
2017, May and
Baker’s gross profit margin
increased to 34.84 percent
from 30 percent the previous
year; thanks to improved efficiency
and focus strategy.
Cost of sales ratio declined
to 64.91 percent in
December 2017 from 70.0
percent the previous year.
This means the company
has spent less to produce
each unit of product.
Earnings before interest
and tax (EBIT) margins
followed the same growth
trajectory as it increased to
12.83 percent in the period
under review as against 9.69
percent the previous year.
A 12 percent profit indicates
the drug maker earns
12 kobo in profit for every
Naira it collects.
May and Baker’s implementation
of many growth
initiatives are paying off as
investors continue to buy
into its stock, signaling they
are upbeat that the company’s
aggressive expansion
plans will magnify their
earnings.
The drug maker’s shares
have gained 23.08 since the
start of the year, outperforming
the Nigerian Stock
Exchange (NSE) All Share
Index (ASI) of 6.79 percent.
Last year, the Federal
Ministry of Health signed
a Memorandum of Understanding
(MOU) with May
and Baker for the production
of vaccines under the Public
Private Partnership by 2019.
The ministry stated that
the country would need
$738 million for vaccines in
2014, 2017 and 2018.
Analysts say they expects
investors to swoop on the
drug maker’s stocks given
an array of projects in the
pipe line that are expected
to trickle down to the bottom
line (profit). They added that
they expect further margin
expansion by the time these
copious investments crystallize.
Despite the tough and
unpredictable macroeconomic,
May and Baker
posted a profit after tax of
N370.86 million in December
2017 as against a loss
N41.09 million it posted the
previous year.
Sales increased by 10.05
percent to N9.35 billion in
the period under review
while gross profit spiked by
29.24 percent to N3.27 billion
in December 2017 from
N2.53 billion as at December
2016.
The year 2016 was horrendous
for May and Baker
and other drug makers in
the country as a severe dollar
scarcity brought on by lower
oil price hindered them from
importing raw materials to
meet production.
In short the country
slipped into its first recession
in 25 years that same
year as drugs on the shelves
of pharmaceutical stores
shrank.
However, the introduction
of the new foreign
exchange window by the
central bank in mid 2017
coupled with the rebound in
crude oil price and production
saw the country exist a
recession.
The gross domestic product
of Africa’s largest oil
producer expanded for three
straight quarters last year after
a 1.6 percent contraction
in 2016, with year-on-year
growth reaching 1.9 percent
in the final three months of
2017.
The above gradual economic
recovery means May
and Baker’s future profit will
get a boost as the availability
of dollars will enhance its
ability to import plants and
raw materials.
Shareholders and investors
should expects a higher
returns on their investment
as the inauguration of the
board of Biovaccines Nigeria
Limited, (a subsidiary of the
company), has raised the
prospects that the subsidiary
will soon begin to impact
positively on the group performance.
The company’s worldclass
manufacturing facility
in Ota, Ogun State, is fast
growing into a hub of pharmaceutical
manufacturing
in West Africa; the imminent
commencement of
operations by Biovacccines
Nigeria Limited will open up
a new vast vista of growth for
the group.
The board of directors
of the company has recommended
distribution of N196
million as cash dividend
for the 2017 business year,
representing a dividend per
share of 20 kobo.
2018 TAMS summit to reward productivity amongst Nigerian workforce
FRANK UZUEGBUNAM
ria Work: The Imperative of
Youth Engagement and Empowerment
in Corporate and
Public Workplaces.”
“We chose the theme,
‘Making Nigeria Work: The
Imperative of Youth Engagement
and Empowerment
in Corporate and Public
Workplaces’” because of the
critical role the bulging youth
demography plays in the
economic growth of Nigeria.
So, we felt that by motivating
them to work harder,
dream bigger and go further
in their careers, we will be
setting the tone for the future
of our country,” said Afolabi
Abiodun, the convener of the
summit and chief architect of
the TAMS workforce management
solution.
The TAMS Productivity
Summit started in 2016 as a
platform for national discourse
about issues and factors
that enhance workplace
and national productivity. The
Summit examines the interrelationship
of elements such as
time management, employee
performance and workforce
productivity vis-a-vis their impact
on operational efficiency,
resource optimisation and
service delivery in all sectors
of the economy.
In addition to aiding organizations
to digitally monitor
employee’s timeliness and
optimise Human Resource
The 2018 edition of
the foremost Time
Management and
Productivity Summit
in Nigeria organised by
IT powerhouse, SB Telecoms,
will hold on May 17, 2018 at
the Agip Recital Hall of the
MUSON Centre, Onikan,
Lagos. The focus this year is
on youth engagement and
empowerment in corporate
and public workplaces a priority
as a catalyst for national
growth.
The theme of the TAMS
Summit 2018 is succinctly
captured: “Making Nigemanagement,
the TAMS
Summit also celebrates exemplary
employees in Nigeria
who have consistently
exhibited top performance
markers in term of productivity
and time management,
as measured by the TAMS
Solutions Software.
Now in its third year of
driving the conversation for
workplace and national productivity,
TAMS Summit 2018
will be conferring the prestigious
TAMS Ambassador recognition
on top 50 employees
out of about 50,000 in over
1200 organisations in Nigeria.
While discussing the rationale
for such a large number
of awardees, Abiodun
enthused: “Our dream of a
Great Nigeria is achievable
when we all invest in human
capital development by creating
a team of change agents.
The TAMS Ambassadors are
imbued with the change culture
where they influence
their immediate workplace
and the larger community to
achieve a Nigeria that truly
represents our heritage and
our future.”
Speaking to these issues
are experts and social influencers,
including Ndidi
Nwuneli of LEAP Africa, Andrew
Gbodume of MRS Oil,
Emily Liggett of Stanford
University, Fola Tinubu of
Primero, Andrew Hanlon of
TVC, and a host of others.
At the centre of this spectacle
is the revolutionary
Time and Access Management
Software (TAMS), an
easy to use workforce management
tool for SMEs and
large corporations alike,
with functions such as remittance,
appraisal, shift,
leave and payroll management
at the fingertip.
Abiodun said “TAMS has
made a positive impact to our
client organisations and business
owners who have seen a
significant rise in employee
punctuality and productivity.
When we set out to develop a
homegrown human resource
management solution.”