Nigerian pharma tycoon Fidelis Ayebae’s Fidson looks to raise $26.3 million in share offering

Oluwatosin Racheal Alabi -

Key Points:

  • Fidson Healthcare aims to raise N20 billion ($26.3 million) through a share offering.
  • The company reported a 31-percent revenue growth, reaching N53.1 billion ($70.2 million) in 2023.
  • Fidson has issued N12.69 billion ($16.8 million) in commercial papers to support working capital.

Fidson Healthcare Plc, a leading Nigerian pharmaceutical manufacturing company led by Fidelis Ayebae, an accomplished banker turned pharmaceutical tycoon, has received shareholder approval to raise N20 billion ($26.3 million) through a share offering program. This resolution was passed during the company’s annual general meeting on July 4.

The resolution states, “The Directors be and are hereby authorized to raise additional capital of up to N20,000,000,000 (20 billion naira) or such amount as the Directors may deem fit through an allotment of shares to be issued whether by way of a public offering, rights issue, strategic allotment, private/special placement of shares or through a combination of methods, subject to terms and conditions to be determined by the Directors.”

This move is part of a broader trend among publicly traded firms to generate capital through share offerings. It showcases Fidson Healthcare’s efforts to secure funding from various avenues amid high interest rates in Nigeria.

Financial performance and growth

Fidson Healthcare, under the leadership of Fidelis Ayebae, has been navigating challenges in the pharmaceutical industry. The company has shown strong financial performance and strategic growth.

For the 2023 fiscal year, the company’s shareholders approved a proposed dividend of 60 kobos per share. This totals approximately N1.38 billion ($1.82 million). This is a 9.1-percent increase from the previous year’s 55 kobos per share, which amounted to N1.26 billion ($1.66 million).

The dividend payout ratio for FY 2023 was 38 percent, with the company posting a net income of N3.61 billion ($4.76 million). Despite a 13.6 percent decline from the N4.21 billion ($5.55 million) posted in FY 2022, Fidson’s revenue grew by 31 percent. Revenue increased from N40.6 billion ($53.6 million) in 2022 to N53.1 billion ($70.2 million) in 2023.

Q1 2024 financials

In Q1 2024, Fidson posted a pre-tax profit of N1.55 billion ($2.04 million). This represents a 23-percent decline from Q1 2023’s N2.02 billion ($2.66 million). However, revenue increased by 66 percent year-on-year, reaching N18.9 billion ($25 million) compared to N11.4 billion ($15.1 million) in Q1 2023. During this period, the company’s current liabilities rose by 12 percent to N36.7 billion ($48.5 million), with trade payables increasing by 53 percent to N8.5 billion ($11.2 million) by the end of Q1 2024.

To support its working capital, Fidson has been issuing commercial papers as part of a N25 billion ($33 million) commercial paper issuance program. In 2024, the company issued about N12.69 billion ($16.8 million) in commercial papers. This included a N1.61 billion ($2.13 million) issuance at 19.85 percent for 180 days and an N11.08 billion ($14.6 million) issuance at 21.46 percent for 270 days.

The initiative to raise N20 billion ($26.3 million) through a share offering underscores Fidson Healthcare’s ongoing efforts to diversify its funding sources. As businesses increasingly seek financing from non-banking avenues due to high-interest rates, Fidson’s strategic move aims to ensure sustainable growth and financial stability.