01-04-2016 by 
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2.00 of 1 votes

Fidson Health PLC has filed its audited financial report for 2015.  The company recorded an impressive 18% increase in profit after taxes. Fidson Health PLC, which had made a profit after taxes of N632 million in 2014, increased that financial performance to N744 million in 2015. Revenue was however down by 16% from N9.7 billion to N8.2 billion. Although in cost of goods sold decreased by 10%, the company still record a 20% decline in gross profit. However, a 74 % and 50% reduction in Other operating expenses   and Selling and distribution expenses helped the company to a 6% gain in operating income. That gain was further increased to result in profit after tax of 18%, that’s to a 706% increase in Finance income and 61% decrease in taxes. The ability of the management of Fidson to manage their cost, which resulted in the observed increase in profit, even in the light of a reduction in revenue is worthy of mention. The Profit before tax translated to earnings per share of N0.5 representing an increase of 8kobo or 19% over the 2014 figures.

Fidson Health PLC Financial Hightlights    
Accounting Items 2015 2014 Change Change %
Revenue 8,210,760.00 9,719,185.00 (1,508,425.00) -16%
Cost of sales 3,858,896.00 4,285,596.00 (426,700.00) -10%
Gross Profit 4,351,864.00 5,433,589.00 (1,081,725.00) -20%
Other operating income 94,264.00 86,539.00 7,725.00 9%
Other operating expenses (23,635.00) (90,025.00) 66,390.00 -74%
Administrative expenses (2,037,327.00) (2,270,126.00) 232,799.00 -10%
Selling and distribution expenses (868,844.00) (1,728,300.00) 859,456.00 -50%
Operating profit 1,516,322.00 1,431,677.00 84,645.00 6%
Finance costs (716,958.00) (554,494.00) (162,464.00) 29%
Finance income 38,675.00 4,798.00 33,877.00 706%
Loss on deemed disposal of associate -   (11,169.00) 11,169.00  
Profit before taxation 838,039.00 870,812.00 (32,773.00) -4%
Taxation 93,661.00 238,987.00 (145,326.00) -61%
Profit after taxation 744,378.00 631,825.00 112,553.00 18%
Earnings per share - basic (in kobo): Basic and diluted 50 42 8 19%
Proposed Dividend (in kobo) 5 15    
Dividend Pay out Ratio 10% 36%    
Dividend growth Rate -67%      
Dividend Yield (based on 3/31/2016 Price) 19%      

 

Dividend Payout Ratio

The board of directors proposed a 5kobo dividend, which translates to a dividend yield of 19% based on the stock price of March 31st, 2016. The proposed 5 kobo dividend represents a dividend payout ratio of 10%, as against the 36% payout in 2014, not so much a good news for dividend investors.

The dividend payout ratio is the amount of dividends paid to stockholders relative to the amount of total net income of a company. The Retention ratio on the other hand is the amount that is not paid out in dividends to stockholders but held by the company for growth. The retention ratio and the dividend payout ratio together equal 1 or 100% of net income. 

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