Fidson Healthcare Plc’s stock dropped to a low of N13.75 per share at the start of trading on August 26, 2024, marking a 21% decline from its year-end high of N17.50 recorded in December 2023.
The downward trend follows the release of Fidson’s second-quarter results for the period ending June 30, 2024. The results revealed a 29.6% year-over-year increase in revenue, with operating profit falling by 17.9% and pre-tax profit decreasing by 66%.
Pre-tax profit decline in the company has been reflected as price retracement in the stock market.
Key Insights:
- Fidson’s revenue increased by 29.6% in Q2 2024 compared to the same period in 2023, rising from N14.1 billion to N18.3 billion.
- However, the company’s pre-tax profit fell by 66% year-over-year, largely due to escalating expenses linked to foreign exchange costs and the naira’s devaluation.
- Bearish pressure increased, with market volume surging by 201% from April to June 2024.
The stock experienced some volatility in July, crossing below N14 before recovering to N14 by the end of the month. However, renewed selling pressure in August dragged the price back down to N13.75.
Dividend and Capital Raise:
On July 4, 2024, during its Annual General Meeting, Fidson’s shareholders approved the board’s proposal to raise up to N20 billion in additional capital. The funds are intended to support the company’s operations.
The capital raise could be executed through various methods, including a public offering, rights issue, or private placement.
In addition to the capital raise, shareholders also approved a dividend payout of 60 kobo per share, totaling N1.3 billion. This represents a 9.1% increase from the 55 kobo per share dividend distributed in 2022, which amounted to N1.2 billion.
This strategic move to inject fresh capital depicts Fidson’s need to stabilize its operations and navigate the challenging economic environment.