May & Baker Plc Sees 10% Price Decline
Following a bearish record in the stock market, Ticker: MAYBAKER capped its weekly valuation loss at 10%, falling from N4.45 per share to N4, according to data from the local exchange. This may be an entry point for investors as the stock become cheaper to buy.
MarketForces Africa gathered from stockbrokers that apart from the fact that a price decline creates an entry point, it could mean more than that, saying companies with fundamentals always maintain solid trading record performance.
The pharmaceutical company’s Q1-2023 results suggest a significant improvement in cash balance despite pressures on beverage segment revenue performance. Last week, the pharmaceutical industry player’s total valuation settled lower at N6.9 billion after the bearish outturn that plunged its market valuation down by 10%.
May and Baker Plc grew profit to N284 million in the first quarter of 2023. Its first three months’ revenue came at N4.248 billion, representing a strong increase when compared with N3.339 billion reported in the comparable period in 2022.
May & Baker’s beverage segment (a unit that is involved in the production of beverage drinks including bottled water) faced a downturn in performance.
Total sales from the segment declined by about half to N3.734 billion from N6.475 billion in Q1-2022 amidst rising competition, and worsening inflation that forces households to redraw their scale of preference and prioritise spending.
The company’s pharmaceutical delivered maintained an uptick in performance in terms of revenue, settling at N4.244 billion from N3.332 billion in the comparable period in 2022.
According to the company, the pharmaceutical segment is involved in the production and sale of human pharmaceuticals and human vaccines. Its financial statement shows large funds locked down in inventories. The company however converted some of its receivables to cash.
In its 2022 audited financial statement, May and Baker Plc reported N14.328 billion in annual sales, while its post-tax profit was about N1.5 billion for the year. Its costs of sales was N10.452 billion while distribution and administrative expenses cut through its gross profit margin deeply.
May and Baker’s earnings per share popped higher to 16.49 kobo from 11.29 in the comparable period in 2022. This came as finance costs steadied, though finance income surged.
On the positive side, net cash flow from its operating activities improved significantly year on year, improving its overall position while capital spending only grew moderately, leaving large cash for its short-term investing activities.
In its Q1-2023, May & Baker Plc’s interest income from investment securities jumped more than 3 times to N55.553 million from N15.836 million in the comparable period – quite significant for a company that reported less than N290 million profit.
T.Y Holdings Limited remained May & Baker’s strategic shareholder with 41.78% interest followed by Onyishi Maduka Samuel, owning 14.91%. Apart from directors’ interest, May & Baker Plc has a 38.29% free float on the Nigerian Exchange. #May & Baker Plc Sees 10% Price Decline
