Fidson Healthcare Plc’s stock has fallen to a 52-week low of ₦12.5 per share, marking a 25% decline from its year-end high of ₦17 in December 2023. The drop, observed at the start of trading on August 26, 2024, is attributed to significant sell-side pressure following disappointing second-quarter earnings results.
The company reported a staggering 50% decrease in revenue year-over-year, with figures dropping from ₦37 billion to ₦18 billion. Operating profit fell by 55%, and pre-tax profit plummeted by 68%, largely due to rising expenses related to foreign exchange and the devaluation of the naira. This financial downturn has led analysts to predict further declines, with some suggesting the stock may drop to ₦11.
Investor sentiment has soured, with the volume of sellers increasing by 201% from April to June 2024. Despite some volatility in July, where the stock dipped to ₦13 before recovering slightly, renewed selling pressure in August has pushed the price back down to ₦12.5.
In response to its financial challenges, Fidson Healthcare is seeking to raise ₦20 billion through a capital offering, which could involve a public offering, rights issue, or private placement. This move aims to stabilize operations amidst declining revenue. Shareholders recently approved a dividend payout of 60 kobo per share, totaling ₦1.3 billion, which represents a 9.1% increase from the previous year’s dividend.
Fidson Healthcare, which operates in the pharmaceutical sector, has faced ongoing challenges but remains committed to addressing these issues as it navigates a tough economic environment. The company is known for its production of ethical drugs, over-the-counter products, and consumer healthcare items, and continues to seek innovative solutions to improve its market position.
