Despite a tough macroeconomic environment, May and Baker had decent top and bottomline growth in 9M 2024.

About the company 

May & Baker Nigeria Plc was incorporated as a private limited liability company in Nigeria on September 4, 1944 and commenced business on the same date. It was listed on the Nigerian stock exchange in 1994. 

The company is involved in the manufacture, sale and distribution of human pharmaceuticals, human vaccines and consumer products. 

Key shareholders 

Theophlius Yakubu (TY) Danjuma and Samuel Onyishi Maduka are key shareholders in the company. Danjuma (via TY Holdings) has a 41.78% stake ( 720,878,543). Samuel Onyishi Maduka owns 266,564,690 shares amounting to a 15.45%v stake.

Other influential shareholders are Seravac Nigeria Limited  with a 3.14% stake (54,134,958 shares) and Maydav Multi Resources Limited with a 2.61% stake ( 45,073,864 ) shares 

 606,526,343 amounting to 35.1% of the company’s shares are free float. 

9M 2024 numbers

Revenue grew by 52.5% from N14.3 billion in 2023 to N21.8 billion in 2024. 

Operations can be split into two segments. 

Pharmaceuticals – This segment is involved in the production and sale of human pharmaceuticals and human vaccines.

 Beverage – This segment is involved in the production of beverage drinks including bottled water.

Pharma revenue at N21 billion  accounts for over 95% of the revenue made by the firm. Rest is from beverages. 

Profit margins

Profit after tax went up by 165% from N711 million in 2023 to N1.8 billion in 2024.

Net  profit margins up 74% year on year but still tiny 

Net profit margins are up year on year but are still quite small. 

Net profit margin = Revenue-Cost/Revenue 

In 9M 2024, for every N100 in revenue made by the firm, N8.65 was profit. 

For the same period last year, for every N100 in revenue made by the firm, N5 was profit. 

Pharma profit increased by 42.8% from N4.7 billion in 2023 to N6.7 billion in 2024.

Profit from beverages grew at a faster pace. Up by 284% from N5.6 million in 2023 to N21.3 million in 2024. 

Will FY 2024 dividend be bigger?  

It is hard to estimate if there will be an increase in dividend payout. For FY 2023, the company paid 30 kobo from the 62.78 kobo it earned. That amounts to a payout ratio of 47.7%. 

9M 2024 earnings per share stood at 109.43 kobo

Q3 2024 earnings per share stood at 24.69 kobo

One can reasonably estimate that FY 24 earnings will be in the 110 to 120 kobo range. 

Conservatively placing the dividend at 35% of earnings would amount to 38.5 kobo. 

Any more room to run? 

Year to date, the stock is up 47.6%, out performing the NGX All Share Index which is up 30% year to date. The index measures the average performance of stocks on the exchange. From that perspective, significant further upside may be limited. 

At its current current price, the stock is trading at 6.1 times TTM (twelve month trailing) earnings. That’s slightly lower than the average PE on the NGX at the moment.