MeCure Industries Halts Uptrend, Keeps 265% Gain

MeCure Industries Plc’s share price settled at N10.80 on Friday, translating to market capitalisation of N43.2 billion. The share price flattened after it lost N1.20 from its opening price of N12.

Recall that Mecure Industries became a public company after it listed 4 billion ordinary shares on the Nigerian Exchange on November 7, 2023, at a valuation of N11.76 billion.

MarketForces Africa reported that Mecure Industries listed 4 billion shares at N2.96 on November 7, 2023. The company share price opened the year 2024 at N12, though it had peaked at N13 last year. 

The company share has increased by about 265% in less than two months. Rather than fundamental, positive sentiment in the newly listed company remains its major stock market catalyst driving its rather too strong stock market price re-rating.

MeCure Industries’ shareholding structure shows it is family-dominated, not yet meeting listing standards for companies listed on the main board.

The share has rerated to obtain a much higher market price. Perhaps its undervaluation was deliberate to allow outstanding shares to be spread before achieving the free float requirements of the company listed on the Nigerian Exchange.

In the company, four major shareholders control more than 97% of MeCure Industries Plc’s 4 billion outstanding shares, according to details from its books.

The Udani ‘clan’ controls about 97% of the company’s shareholdings based on the recent unaudited financial statement submitted and reviewed by MarketForces Africa.

Samir Udani, Avni, and Arjun Udani hold 32.20% share each while Anderline Dukor’s stake was 0.68%. Other shareholders control 2.45% of the outstanding shares.

In its 9-month financial statement, MeCure Industries reported N21.577 billion as revenue, out of which the company posted a post-tax profit of N1.987 billion. MeCure Industries recorded a sizeable amount as costs of sales and gross profit.

Its figure showed that costs of sales printed at N14.102 billion, leaving the company with a gross profit of N7.475 billion at the end of September 2023. The operating profit of the company settled at N4.360 billion due to sizeable expenses relating to marketing and administrative overheads.

The company also charged N1.7 billion as finance costs against its income statement. Pre-tax profit was N2.651 billion at the end of the period, and a tax provision of about N665 million reduced its bottom line to N1.97 billion.

On every share deployed for operation in the period, Mecure Industries earned less than 50 kobo, according to its financial statement for 9 months in 2023. #MeCure Industries Halts Uptrend, Keeps 265% Gain Naira Devaluation Deepens Economic Crisis in Nigeria