The shareholders of Fidson Healthcare Plc have approved a resolution which authorizes its directors to raise N20 billion through a share offering programme during the annual general meeting of the company that was held on July 4, 2024.
The resolution reads, “The Directors be and are hereby authorized to raise additional capital of up to N20,000,000,000 (Twenty 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.”
The company’s decision represents the latest in a series of initiatives by publicly traded firms to generate capital through share-offering programs.
At the Annual General Meeting, the company’s shareholders approved a proposed dividend of 60 kobos per share, totalling approximately N1.38 billion.
This represents a 9.1% increase from the 55 kobos per share distributed for FY 2022 when the company disbursed N1.26 billion in dividends.
The dividend distribution for FY 2023 represents a dividend payout ratio of 38%, as the company posted a net income of N3.61 billion in 2023. It also marks a significant appreciation from the 30% dividend payout ratio recorded by the company in 2022.
In 2023, Fidson posted a net income of N3.61 billion, representing a 13.6% decline from the N4.21 billion posted in FY 2022. During the financial year, the company posted a revenue of N53.1 billion, representing a 31% growth from the N40.6 billion revenue posted in 2022.
The trajectory continued in the first quarter of 2024, as the company posted a pre-tax profit of N1.55 billion, marking a 23% decline from the N2.02 billion posted in Q1 2023. However, the company recorded a revenue of N18.9 billion, representing a 66% year-on-year growth from the N11.4 billion revenue posted in Q1 2023.
During Q1 2024, Fidson’s current liabilities increased by 12% to N36.7 billion, from N32.9 billion as of FYE 2023. Its trade payables appreciated by 53% during the quarter, from N5.5 billion as of FYE 2023 to N8.5 billion as of the end of Q1 2024.
To augment its working capital, Fidson Healthcare has been issuing commercial papers as part of a N25 billion commercial paper issuance programme. In 2024, the company issued approximately N12.69 billion in commercial papers, comprising a N1.61 billion issuance at 19.85% for 180 days and an N11.08 billion issuance at 21.46% for 270 days.
The initiative to raise N20 billion through a share offering underscores the company’s ongoing efforts to diversify its funding sources.
This move comes as businesses increasingly seek financing from non-banking avenues in response to Nigeria’s high interest rates.