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How much longer would this pharmaceutical company remain listed on the NSE?

Some companies continually disobey the rules, and one of them is Evans Medical Plc, Nairametrics’ company focus for the week.



Evans Medical Plc Employees

The Nigerian Stock Exchange (NSE) never delays to impose sanctions on NSE-listed companies, especially when such companies flout listing rules. But despite these sanctions, some corporates cannot seem to get their acts together. Instead, they continually disobey the rules, and as such, repeatedly appear on the X-Compliance Report. One of such companies is Evans Medical Plc, Nairametrics’ company focus for the week.

What is happening to Evans Medical Plc makes for a curious case of corporate governance breakdown. It is rather outrageous that the company has not disclosed its financial records since July 2016. Even at that, the last result released was for Q3 2015. As if that couldn’t be any worse, trading activities on the company’s shares have been non-existent for a while now; leaving the share price in a limbo –N0.50.

So, what is happening to Evans Medicals Plc? Why has it not made its mandatory financial disclosure (as a quoted company) for three consecutive years? Has it not been earning revenue/profit over the past three years? Is the company even still in business?

This article will attempt to answer the questions above. After all, this is a column that avails potential investors the opportunity to know more about small-capitalised, little-known companies that are listed on the Nigerian bourse. In the meantime, let us start with a little overview of the pharmaceutical company. Shall we?

About Evans Medical Plc: Business model, incorporation, and listing on the NSE

As a pharmaceutical company, Evans Medical Plc is in the business of manufacturing, distributing, and merchandising pharmaceutical products, mostly drugs. These drugs are both over the counter and prescriptive in nature, and cater to such important areas of medical needs as the following:
• Anti-diabetes
• Anti-malarial
• Anti-asthmatics
• Anti-ulcerants
• Anti-hypertensives
• Anti-histaminics
• Erectile dysfunction drugs
• Analgesics
• Vitamins and minerals
• Pharyngeals,
• Cold and cough medications
• Haematinics and blood forming preparations
• Prostagladins, etc.

The company, which is based in Lagos Nigeria, was initially incorporated in 1954 under the trading name “Glaxo Nigeria Plc”. But in 1994, its name was changed to Evans Medical plc. Note that this name change occurred fifteen years after the company was listed on the Nigerian Stock Exchange in 1979. In other words, Evans Medical Plc has been on the NSE for at least forty years.

But in light of the company’s incessant corporate governance issues, coupled with its shrinking shares outstanding (732,347,370) and a market capitalisation (N366.1 million) due to investors’ disinterest, it could just be a matter of time before its time on the NSE finally comes to an end.

Who is the company’s target market?

It is a no-brainer that as a pharmaceutical company which produces both over the counter and prescriptive drugs, Evans Medical Plc’s primary target market is comprised almost entirely of sick people. Now, seeing as Nigeria’s population is estimated at nearly 200 million people (some of whom fall sick ever so often), this presents immense opportunities for the company to meet needs in exchange for value. But it has been unable to do this, at least judging by its repeated failure to disclose its financials. And this might as well be as a result of growing competition.

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A look at the company’s competition

As it can be expected, Nigeria has a vibrant and highly-competitive pharmaceutical industry. Top players in this industry include the likes of GlaxoSmithKline Nigeria Plc, Fidson Healthcare Plc, Neimeth International Pharmaceutical Plc, Pharma Dekko Plc, May & Baker Plc, and Emzor Pharmaceuticals Limited, etc.

Out of the lot, Fidson Healthcare Plc and GlaxoSmithKline Nigeria Plc are market leaders. These companies pose the biggest competitive threat Evans Medical Plc has to grapple with.

These individuals comprise the company’s board

Available records show that Evans Medical Plc has about 331 employees. But out of this number, only about twelve members of the company’s board of directors get to make key decisions affecting the coy. These individuals are:

  1. Alhaji Ahmad Damcida
  2. Chief Olubunmi Olopa,
  3. Chief Saifudeen Ademola Edu,
  4. Mr Adegboyega A. Ademiluyi
  5. Mr Lawrence Fubara Anga
  6. Mr Adeoye Oyewo
  7. Mr ADEWALE Oyenuga
  8. Mr Michael Ajufo
  9. Mr Sola Ogunwale
  10. Mr Victor Eburajolo
  11. Mrs Teniola Aluko
  12. Mrs Titilope Bamidele Adeyemi

NSE’s sanctions and other troubles faced by the company

As earlier mentioned, the Nigerian Stock Exchange has, on numerous occasions, imposed sanctions on Evans Medical Plc. These sanctions are mainly due to the company’s repeated failure to release its quarterly and annual financial results as expected of all listed companies on the Exchange.

In 2017, the Nigerian Stock Exchange decided to place the pharmaceutical company on its delisting watch list, subject to when all the necessary compliance reports are filed. But none of those reports have been filed till date, even as the company has remained on the delisting watch list.

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Meanwhile, it is important to mention that according to the company’s last released full-year financial report (2014), it had a total outstanding loan of N5.7 billion. These loans were owed banks, including FirstBank of Nigeria Limited, Bank of Industry, and the now defunct Skye Bank Plc. Due to the debt, a Federal High Court gave an injunction in 2017 for Skye Bank Plc to seize the pharmaceutical company’s assets which were used as collaterals.


What is the future of the company?

Leading audit firm, PricewaterhouseCoopers (PwC), had in 2014 disclosed that it was uncertain whether Evans Medical Plc would be able to continue to exist as a going concern. This is due to its debt issues, profitability issues, and corporate governance.

Seeing as these issues have persisted (if not worsened almost five years later), the likelihood of PwC’s projection might just come to pass sooner than later.

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Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs.He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor.Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan.If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

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Secret behind MTN’s blistering performance

Despite COVID-19 disruptions, MTN Nigeria’s 2020 financials showed marked improvements compared to its 2019-year-end.



NCC, MTN’s parent company faults regulator’s recommendation for data price reduction, MTN Nigeria reacts to poor internet as network issues go beyond Nigeria 

MTN Nigeria Communications Plc (MTN Nigeria) released its audited financial results for the financial year ended December 31, 2020.

Despite a challenging 2020 to individuals and businesses caused by COVID-19 disruptions, MTN Nigeria’s financial and non-financial information showed marked improvements compared to its 2019-year-end as well as prior quarters of 2020 results that were impacted by the COVID-19 pandemic.

Indeed, the evolving pandemic which intensified lockdown, remote working, and work-from-home procedures, appeared to have led to increased adoption of MTN Nigeria data and digital services.

Specifically, year-on-year on non-financial information, mobile subscribers increased by 12.2 million to 76.5 million; active data users increased by 7.4 million to 32,6 million while the company’s mobile money business continued to accelerate with a 269.2 % increase in the number of registered agents to over 395,000 and 4.7 million active subscribers from approximately 553,000 in 2019.

Year-on-year on financial information, service revenue increased by 14.7 % to NGN1.3 trillion driven principally by voice (with revenue growth of 5.9 %) and data revenues (rising by 52.2 % led by increased data use and traffic); profit before tax (PBT) grew by 2.6 % to N298.9 billion; profit after tax (PAT) increased by 0.9 % to N205.21 billion; while Earnings per share (EPS) rose by 0.9 % to N10.1 (N9.93, 2019).

Nonetheless, significant increases were noted in its operating expenditure as well as capital expenditure. First, there was a 2.3 % increase in operating expenses arising from the rollout of new sites and the impact of naira currency depreciation affecting the costs of MTN Nigeria lease contracts. Secondly, EBITDA margin declined by 2.5 %age points to 50.9 % (from 53.4 % in 2019) There were also other significant cost rises including a 25.4 % increase in net finance cost, and 19.4 % increase in capital expenditure which had a 11.7 % knock-on increase in depreciation and amortization costs.

On the back of the year-end result, MTN Nigeria has proposed a final dividend per share (DPS) of N5.90 kobo per share to be paid out of distributable income and brings the total dividend for the year to N9.40 kobo per share, representing an increase of 18.7 %. MTN Nigeria paid N4.97 as final dividend for the year ended December 31, 2019. This was in addition to an interim dividend of N2.95, which brought its total 2019 dividend to N7.92 per share.

The proposed dividend implies a yield of 3.4%. Having paid an interim dividend of NGN3.50 in 2020, the proposed dividend, if approved, will bring the total dividend per share to NGN9.40 or c.19% higher compared with 2019.  We expect a positive reaction from the market due to the marked improvement in earnings. However, the market’s reaction may be dampened by negative investor sentiments on equities arising from the uptick in yields on fixed-income securities.

We expect that the introduction of additional customer registration requirements requiring subscriber records are updated with respective National Identity Numbers (NIN), and the continued suspension of the sale and activation of new SIM cards will affect subscriber growth.

MTNN share price remains unchanged at the end of trading yesterday at N174 per share.


Tade Fadare PhD, is an economist, and a professionally qualified accountant, banker and stockbroker. He has significant experience working or consulting for financial institutions in Europe, North America, and Africa.

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How does a bank make N19 billion a month?

The strategy for banks globally is to attract deposits at a lower rate than it lends out to borrowers.



How does a Financial Services Group make N19b a month, post a Profit After Tax figure of N230b in an environment where global commerce virtually ground to a halt in 2020?

The Zenith Bank Plc (Zenith) Year-end 2020 final results are a blockbuster, not just in the quantitative, but the qualitative as well. In all major headline numbers, Zenith posted growth on a Year-on-Year basis, specifically, Gross Earnings are up 5.2%, Net Interest Income up 12%, Customer deposits up 15.3%.

Somehow Zenith grew her loan book by 18% in a recession and reduced the volume of Non-Performing Loans in the same period. Zenith was also able to post a higher revenue number from non-interest income even as yields on fixed-income fell across Nigeria. I must stress, Zenith has posted these results by servicing her target segment of the high-end corporates in Nigeria.

READ: Union Bank Nigeria Plc posts N15.9 billion profit in 9M 2020, up by 2%

So how did Zenith achieve this? I want to do a deep dive into how to make profits in a recession. However, it is important to start with a background on how banks make money which is basically in two ways;

  • Interest income: which is income generated from the bank gathering deposits from customers and investors and “renting” out these funds to individuals and corporates for a fee called interest. Interest Income is seen as the main business of banks. It is a measure of how well the bank has fine-tuned its people, process, and systems to generate returns from a commodity called cash.
  • Non-Interest Income: This is the income the bank generates from deploying its brands and people to juice revenues from activities that do not necessitate a transfer of cash. For Example, a bank asset management business leverages the bank’s skillsets to earn fees by providing investment advice to clients. Does a business want to expand? The bank can advise on the process to make that happen.

READ: Zenith Bank spends N20 billion on IT in 2020, up 122%

The strategy for banks globally is to attract deposits at a lower rate than it lends out to borrowers. This allows the bank generate a spread between cost and revenue. The bank’s interest spread can be magnified by the number of quality loans it creates as Interest Income rests also on the quality of the loan book. Positive spread drives the funding of other banking services and is supported by the banks internal competencies to manage risk

So a bank makes profits by

  1. Attracting cheap deposits
  2. Earning positive spread
  3. Providing value addition for a fee
  4. Effective Risk Management

All these have to happen simultaneously. A bank that sources expensive deposits by paying higher rates generates a lower spread. Lower spread exposes the bank to cost overruns and will prove fatal to long-term growth.

READ: Zenith USSD banking transaction value rises by 30.8% Y-o-Y to hit N497.29 billion

With this in mind, let’s review Zenith FY 2020 Performance

  • Attracting Cheap Deposits: In 2019, Zenith’s total interest expense, which represents how much it paid to get deposits was N148b, that figure dropped in 2020 to N121b. this means the bank was able to grow deposits by 25% but at a lower cost. How? Zenith changed her deposit mix, reducing borrowed funds/leases and time deposits by 41% and 38% respectfully and increasing the share of current accounts by 155%. By swapping the deposit mix, the bank’s cost of funds ratio fell by 18mn%.
  • Earning Higher Spread: Zenith grew Net Interest Income by 12.2% in 2020. This figure represents income earned from the deposits and investments of the banking group. Again, this was achieved by asset mix reorganization. In the face of falling rates especially on shorter-dated FGN instruments, Zenith shifted allocation from Treasury bills to longer-dated FGN bonds which paid a higher yield. Zenith’s Non-interest Income also grew to N275b a 5% jump from 2019. This is driven largely by extraordinary items including foreign currency revaluation gain, which is the gain realized from the revaluation of foreign currency-denominated assets. I must highlight this. Zenith was able to post a gain of about N43b which is a 256% gain from FY 2019 based on the Naira being devalued to the US Dollar.
  • Providing Value Addition: Value addition will include all non-core banking services Zenith Group provides to the public including subsidiaries like the Zenith Penson Custodians which has N4t in assets under custody. Commission on agency and collection was a big contributor to Zenith’s non-core banking revenue.
  • Risk Management: Zenith was efficient in deploying its internal competencies to minimize and avoid risk and impairments from the ordinary and extraordinary course of business. Zenith like other financial institutions saw a pullback in commercial activities from her clients. Take the Commerce subsector, the Non-Performing Loan share in that sector grew from 9% to 24%. Zenith, booked an increase in the number of NPLs by volume to N125m in FY 2020 but the bank was able to keep the NPL ratio down to 4.29%. An extraordinary feat.

Overall, the bank was able to navigate a difficult year and post a good return and a handsome dividend of N3 to investors. Zenith was able to achieve all this while increasing the staff strength by 4.6% to 7555 employees.

However, there are red flags as well:

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  • Net Interest Margin was down in FY 2020 as yields declined. If yield continues to stay muted, can Zenith keep finding profitable avenues to invest that N5.34 deposit base?
  • Interest income positive in FY 2020 at 420b but when compared to 2017, interest income is falling.
  • If you ignore the revaluation gain, then Non-Interest income will be considerably muted, possibly negative in FY 2020
  • Fees on electronic products fell 36% in an environment where online banking has been not just sound business practice, but life-saving as well.

Overall, in an environment with months of local and international shutdowns, Zenith has posted good numbers and demonstrated it is possible to eke out gains from a hard environment. When one looks at the dividend yield, P.E. Ratio of the bank, for me, this is a Buy.


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