MeCure Industries Plc has delivered exceptional growth in Q2 2025, highlighted by a 634% YoY surge in pre-tax profit and 165% revenue growth, driven primarily by booming demand in its acute care and OTC product segments. The company’s sharp revenue and margin expansion have firmly placed it on an upward profitability trajectory. However, a heavily debt-funded balance sheet, with a gearing ratio of 73%, casts a shadow over its sustainability and financial flexibility.
📊 Q2 2025 Financial Highlights (YoY Growth)
Metric Q2 2025 (₦B) Q2 2024 (₦B) YoY Growth
Revenue 23.97 9.05 +164.9%
Cost of Sales 15.55 6.00 +159.2%
Gross Profit 8.32 3.01 +176.3%
Operating Profit 5.17 1.20 +329.7%
Finance Cost 2.07 0.78 +165.5%
Profit After Tax 2.16 0.30 +631.2%
Cash & Equivalents 3.17 0.35 +809.7%
Total Assets 67.50 54.85 +23.1%
Total Borrowing 46.10 36.17 +27.5%
Shareholders' Funds 16.09 13.96 +15.3%
Key Strengths
1. Explosive Revenue Growth
Q2 revenue surged to ₦23.97 billion (+165% YoY), driven by continued expansion in the acute care and OTC segments. This has already placed H1 2025 revenue on par with full-year 2024, suggesting MeCure is scaling rapidly.
2. Operating Leverage & Cost Control
While costs rose, MeCure improved operating efficiency significantly. Overheads dropped to 38% of gross profit, compared to 61% in Q2 2024 — resulting in a 330% rise in operating profit and a 21% operating margin.
3. Improved Interest Coverage
Finance costs jumped 165%, but earnings strength improved interest coverage to 2.49x, up from 1.59x in Q1 2024 — indicating a better ability to meet debt obligations from operations.
Key Weaknesses & Risks
1. Aggressive Debt Funding
Total borrowing now stands at ₦46.1 billion — accounting for 68% of total assets — leading to a gearing ratio of 73%. This level of leverage is high for a healthcare company and could constrain future capital raising or expose it to refinancing risk.
2. Low Equity Base
Shareholders' funds of ₦16.09 billion represent just 24% of the balance sheet, limiting its equity cushion and potentially exposing the firm to volatility in interest rates or market downturns.
3. Margin Sustainability
Current gross margins (35%) and operating margins (21%) are impressive, but sustainability may be tested in a high-inflation environment or if demand for acute care products slows.
Conclusion
MeCure Industries Plc is riding a wave of operational success, with standout performance in Q2 2025 across revenue, margins, and profitability. The company is capitalizing well on growing healthcare demand in Nigeria. However, the rising debt burden, relatively low equity base, and cost of capital pressures suggest caution in assigning aggressive multiples.
How well do narratives help inform your perspective?
Disclaimer
The user WaneInvestmentHouse holds no position in NGSE:MECURE. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.