Fidson Healthcare Plc held a breakfast meeting with shareholders to provide details of a N3 billion rights issue.
Nairametrics had an exclusive interview with the Founder/Managing Director, Fidelis Ayebae.
Issues discussed included the company’s 9M 2018 results, qualities he considers when hiring staff, reasons for the rights issue, and his vision for the company in the next 10 years.
Increase in energy costs and personnel costs
In response to a question from Nairametrics on what led to an increase in energy and personnel costs in the months ended September 30, 2018, Ayebae attributed this to the biotech plant.
“Basically, it’s the biotech plant, which is powered 100% by diesel and gas generators. We did not use NEPA at all. The machines are too sensitive to NEPA. Because of spikes from the generators themselves, we have also had to install UPS that cost over N300 million, so we don’t have downtime for those machines. On energy alone, we spend about N100 million a month to power it.
“In order to then maximise the cost of power, we have had to increase capacity on some of the lines. Those will require manpower, so manpower will also increase. From a staff strength of about 700 and something total one and half years ago, we are now at 1,060 people in 2018 coming into 2019. This has contributed to that.”
“It is compensated by the number of products that will be churned out from the biotech plant. The number of products meaning more SKU infusion products, more ear drops, more eye drops, more tablets that are sugar coated and film-coated coming out.”
Ayebae also gave a break down of how long it takes to develop a product.
“Gestation time is 12 months. For every product that you see out there, it takes a minimum of 12 months. It takes about 6 months to perfect your formulation, and expedite your stability studies. In other words, do accelerated stability studies.
“When you find that the product is stable and okay, that is where you do your shelf life estimate. It is after that you begin the process of registration, which takes 6 to 9 months.”
People are key
“In all of these times, the people are working. You can’t fire them, because this is a scientific space. You can’t afford to lose manpower, the way you lose in say, a service business. Otherwise, you don’t exist.”
Reasons for the rights issue
Ayebae also disclosed why the company was going for a rights issue.
“One of the reasons we are going for this rights issue is to have at least a billion naira that will be used mainly for the importation of raw and packaging materials. When we import ourselves instead of buying from importers, we are able to save between 12 and 20% cost.”
“If the rights issue is successful, which it will be, we will then be able to not only have access to funding for FX, but hopefully warehouse FX with suppliers abroad so we can give them say, a year’s contract for specific raw materials, and pay in rotation.”
Why not a debt raise?
The firm had opted for an equity raise in order to deleverage its balance sheet.
“At every given time, we want to use the right mix for funding the business. We are leveraged right now in terms of borrowing. We don’t want to borrow to pay off existing loans. We want to be able to pay off existing loans from shareholders’ contribution, which is either a rights issue or public offer.
“When it comes to expansion or product development or marketing spend, these are areas that you have quick turn-around; you can then go for another mix of funding. Either borrowing from commercial banks, or issuance of commercial paper or issue a bond as it were. This, we would consider as it goes on.
“Right now we are leveraged. To deleverage, we would rather use investor funds. When we get to the point of further expansion, we would be thinking of other fund mixes. The company expects to pay off its bond by November.”
An FX loan is out of the way
The Fidson boss also shed more light on why the company was not keen on a dollar-denominated loan.
“The thing we never want to do is borrow in foreign currency because the cost of hedging the rate is high. What we are doing in that sense is to see whether our suppliers can continue to give us credit. Today, our suppliers are exposed to us to the tune of $2/$3 million dollars in supplier credit.
“If there is a movement in the exchange rate negatively, that will affect us. So we watch all the time how we play in the area of foreign exchange.
“I was in this market in 2007 and 2008, when a lot of people accessed the Daewoo loans. A lot of them are unable to pay.”
3 qualities to look for when hiring
In response to a question on qualities to look for when hiring staff, Ayebae gave an interesting take.
“I don’t sit at interview panels. I allow the younger generation in the office to interview those they can work with because my time is getting closer to retirement. I cannot be hiring people for others that are going to manage the company. I will rather they hire for themselves who they want. I only get to seat in the final interview of a very senior manager.”
Qualities of a good staff
Three qualities in his view are essential in good staff: Ability to make quick decisions, integrity, and longevity with the company.
“The qualities I look for are very simple. Ability to think and make decisions on your feet is one of them. In this time of innovative technology, you can only make decisions if your thinking faculties are intact. The ability to think and make decisions unsupervised is key.”
“Can this fellow be trusted? We are dealing with other people’s money because we are a publicly quoted company. Can I trust this fellow? Because you cannot be a permanent watchman, whether people are going to steal or not. You have to ask them questions that will test their integrity.”
On the third quality, he said
“Will this person be useful in the future of this company. You may be a smart kid, but if you are not going to be able to spend time with us, 10 years, 15 years of your life working for the company, I will not want you. For a very simple reason. It is very expensive to keep replacing people, especially in the science field in which we work.
“Ideas take time to be birthed, and when they are birthed, the same scientist who had that idea must be the one to superintend it to ensure it finally comes out, either as a product or service. If this fellow has gone, what happens to that idea? Two things may happen: that idea probably dies because he was the only one; he may even take the idea to another place.
“If those three are there, I can cope with others.”
The Fidson MD also painted a broad picture of where he expects the firm to be in ten years.
“In 10 years, we would have trebled in both top and bottom lines. We would be an exporting company. In ten years from now, I am sure we would have discovered one or two proprietary medicines. In our research and development. We would be a research and development based manufacturing company in Nigeria.
“Will I be there? I don’t know, but I see Fidson continuing to give value to investors the way I have done. All of those landmarks have been established. The people that we are grooming to take over you saw them.”
Focus on R and D
“I see a Fidson that is bigger, better and more scientific in her approach to doing things. When I say scientific, I mean home-grown ideas that we would incubate from our R and D.”
PenCom okays N2.58billion for relatives of 591 deceased workers in three months
PenCom has released N2.58billion for payment of pension benefits of deceased workers.
The National Pension Commission (PenCom) has released N2.58billion for payment of pension benefits of 591 deceased workers under the Contributory Pension Scheme in the second quarter 2020.
This was disclosed in the commission’s second-quarter 2020 report.
According to the report, the beneficiaries included 288 from the Federal Government sector, 135 from State Government sector and 168 from the private sector, making a total of 591 relatives.
It read, “The commission approved the payment of N2.58bn as death benefits to the beneficiaries of the 591 deceased employees during the quarter under review.”
PenCom also said that during the quarter under review, the Pension Fund Administrators recaptured 56,990 Retirement Savings Account holders and uploaded their data on the Enhanced Contributory Registration System.
It stated that the Enhanced Contributor Registration System, which was deployed in June 2019, had provided a platform for addressing various issues identified with the Contributor Registration System.
It said the PFAs under the assistance of Pension Operators Association had commenced the implementation of a shared service approach in order to speed up the data recapture exercise.
The commission said it generated a total number of 190 employer codes in the period under review using the ECRS.
Over 92% of employer codes generated were for private sector companies, including about seven per cent for small businesses, it stated.
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Best performing Mutual Funds in September
Nairametrics reviews the best Mutual Funds in August, judging by their performance.
Mutual Funds are professionally managed investment schemes that are controlled by designated Asset Management Companies (AMC). These Funds allow investors the opportunity to invest in stocks, bonds, and securities. They are particularly good for passive investors.
According to data from the Security and Exchange Commission (SEC), Nigeria currently has about 112 Mutual Funds as of October 2nd, 2020. These Mutual Funds cut across several Fund Types. Here is a breakdown of the Fund Types available for investors according to SEC.
These are the top 5 performing funds. We also included profiles of the Funds as described on their websites. To determine the best performing Funds in the month of September, we looked at the Fund Prices as of August 2020 and compared to the fund prices as of 2nd October, as released by the Securities and Exchange Commission (SEC).
Vantage Balanced Fund – Investment One Funds Management Limited
The Vantage Balanced Fund (VBF), formerly known as Nigerian International Growth Fund is a balanced Mutual Fund, was created to maximize long-term capital growth and maintain regular income distribution.
The Fund is invested in Equities, Fixed Income and Money Market Instruments, and Real Estate investments. The primary objective of the Fund is long-term capital appreciation, which is achieved by investing not more than 70% of the Fund’s assets in the equities of blue-chip companies listed on the Nigerian Stock Exchange.
Fund Price – N2.17
Fund Price – N2.41
Return – 11.06%
Ranking – First
Commentary: VBF is a Mixed Fund by Investment One Funds Management Limited. It is the best performing fund in the month of September, growing by 11.06%. The net asset value stood at N1.71 billion as of 2nd October.
Anchoria Equity Fund – Anchoria Asset Management Limited
The Anchoria Equity Fund is an open-ended fund. It is a collective investment scheme, which seeks to invest primarily in quoted equities (minimum of 75%) and fixed income securities (maximum of 25%). The Fund does not invest in unquoted equity securities. The Fund employs an asset mix strategy with the aim of achieving consistent growth, by seeking significant exposure to a diversified pool of investment-grade equities and fixed income securities.
In order to ensure sound investment selection, portfolio, and risk management practices, the Fund adopts a portfolio strategy that largely depends on fundamental and technical analysis in order to properly assess the inherent risks within the context of the Fund profile. Accordingly, the Fund holds long term quoted equity positions with strong fundamentals underpinned by good economic themes, that are attractively priced relative to their true value and prospects.
Fund Price – N99.33
Fund Price – N107.87
Return – 8.60%
Ranking – Second
Commentary: This is an Equity Based Fund by Anchoria Asset Management Limited. For a fund that is predominantly focused on equities, this is a pretty much impressive performance by all standards. It grew by 8.60% in the month of September. The net asset value stood at N313.78 million as of 2nd October.
Paramount Equity Fund – Chapel Hill Denham Mgt. Limited
The Paramount Equity Fund is Nigeria’s oldest mutual fund which invests in a broad range of high-quality equities and fixed income securities. The Fund seeks to provide an investment vehicle that enables unitholders to achieve consistent capital appreciation and some income over the long term. The Fund is suitable for investors who seek high capital growth and have a high-risk appetite. Investors are also expected to have medium to long term investment horizon.
Fund Price – N11.54
Fund Price – N12.52
Return – 8.49%
Ranking – Third
Commentary: This is an Equity Based Fund by Chapel Hill Denham Management Limited. The Fund grew by 8.49% in the month of September. The performance is impressive considering that it is predominantly focused on equities. The net asset value stood at N425.28 million as of 2nd October.
VI ETF – Vetiva Fund Management Limited
The Vetiva Industrial ETF “VETIND ETF” is an open-ended Exchange Traded Fund managed by Vetiva Fund Managers Limited. The VETIND ETF is designed to track the performance of the constituent companies of the NSE Industrial Index and replicate the price and yield performance of the Index.
The NSE Industrial Index comprises of the top 10 companies in the Industrial sector listed on the Nigerian Stock Exchange (NSE), in terms of market capitalization and liquidity and is a price index weighted by adjusted market capitalization.
Fund Price – N11.19
Fund Price – N12.00
Return – 7.24%
Ranking – Fourth
Commentary: The VI ETF by Vetiva Fund Management is the best performing Exchange Traded Fund in the month of September. It grew by 7.24% in the review month. The net asset value stood at N126.32 million as of 2nd October.
VCG ETF – Vetiva Fund Managers
The Vetiva Consumer ETF “VETGOODS ETF” (launched in 2015), is an open-ended Exchange Traded Fund managed by Vetiva Fund Managers Limited. The VETGOODS ETF is designed to track the performance of the constituent companies of the NSE Consumer Goods Index and to replicate the price and yield performance of the Index.
The NSE Consumer Goods comprises the top 15 companies in the Food/Beverages and Tobacco sector listed on the Nigerian Stock Exchange (NSE), in terms of market capitalization and liquidity, and is a price Index weighted by adjusted market capitalization.
Fund Price – N4.27
Fund Price – N4.57
Return – 7.03%
Ranking – Fifth
Commentary: This is another of Vetiva’s products, and it is one of the best Exchange Traded Funds based on September performance, growing by 7.03%. VCG EFT Funds are a great source of investment, and it is not surprising to see another in the top 5 rankings. The net asset value stood at N117.36 million as of 2nd October.
Bubbling Under: The following Funds make up the rest of the top 10 on our list in descending order.
6.VG 30 ETF – Vetiva Fund Managers Limited (Exchange Traded Funds)
Return – 6.64%.
7. ACAP Canary Growth Fund – Alternative Cap. Partners Limited (Mixed Funds)
Return – 6.22%.
8.VETBANK ETF – Vetiva Fund Managers Limited (Exchange Traded Funds)
Return – 5.80%.
9. AIICO Balanced Fund – AIICO Capital Ltd (Mixed Funds)
Return – 5.75%.
10. Frontier Fund – SCM Capital Limited (Equity Based Funds)
Return – 5.34%.
NB: The figures are based on SEC weekly performance report
Depositors of Post Service Homes Savings and Loans Limited soon to be paid – NDIC
Depositors of Post Service Homes Savings and Loans Limited currently in liquidation will soon be paid their claims.
The Nigeria Deposit Insurance Corporation (NDIC), the official Liquidator of the defunct Post Service Homes Savings and Loans Limited (in-Liquidation) is in the process of paying insured sums to the depositors of the closed bank.
As from Monday, 5th October 2020, all depositors of the bank are requested to visit any branch of the defunct bank, for verification of their claims with the NDIC officials.
NDIC further directed the affected Depositors to present their cheque books, passbooks, and any other proof of account ownership, together with any valid means of identification; and alternate account as part of the verification exercise, before the insured amount can be paid to them.
All eligible depositors could also contact the representatives of the Director, Claims Resolution Department in any of the underlisted NDIC Zonal Offices nearest to them, to file their claims or seek further clarifications as may be deemed necessary.
NDIC Zonal offices and phone numbers:
|1||Lagos Office||NDIC NECOM House 10th Floor, 15 Marina, Lagos.||08166569995; 09072412332|
|2||Enugu||10, Our Lord’s Street Independence Layout, Enugu.||042-290898|
|3||Benin||28A/28B Benoni Hospital Road, Off Airport Road, GRA Benin City, Edo State||08150999577; 08150999588; 08150999599; 08150999600; 08150999535|
|4||Kano||Plot 458 Muhammad Muhammad Street, Off Maiduguri Road, Hotoro GRA, Kano.||08097756130; 09092748222|
|5||Ilorin||No 12A Sulu Gambari Road Ilorin.||08023123185|
|6||Bauchi||Plot No 3 Bank Road, P.M.B 0207, Bauchi.||09-4601505|
|7||Sokoto||No 2 Gusau Road, Opp. NNPC Mega Station, Sokoto.||08033155162|
|8||Yola||No 6 Numan Road P.M.B. 2227, Jimeta Yola, Adamawa State.||08067910599; 08068418069; 08067923383; 09-4601515 09-4601516|
|9||Port Harcourt||No 104 Woji Road, Off Olu Obasanjo Road, GRA, Port Harcourt||09090726737; 09029150752|
|10||Head Office Abuja||Head, Bank Examination Unit (BEU) Abuja Plot 447/448 Constitution Avenue, Central Business District, Abuja.||09-4601260; 09-4601261|