Vitafoam Nigeria doubles pre-tax profit to N1.18b

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Vitafoam Nigeria doubles pre-tax profit to N1.18b
January 28, 2020
 
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Vitafoam Nigeria Plc started the new business year on a double as the foam-manufacturing company doubled profit to N1.13 billion within the first three months of the year.

Vitafoam Nigeria’s share price rose by 6.0 per cent to N5.30 per share on Monday at the Nigerian Stock Exchange (NSE) as investors reacted positively to the first quarter results.

Key extracts of the interim report and accounts of Vitafoam Nigeria for the three-month period ended December 31, 2019 showed that pre-tax profit grew from N513.12 million to N1.18 billion. Profit after tax also leapt from N361.87 million to N819.67 million.

Earnings per share thus doubled to 62 kobo in first quarter ended December 2019 compared with 33 kobo recorded in comparable period of 2018. Turnover however declined from N6.38 billion to N5.98 billion.

The first quarter performance strengthened the return outlook of the group and it came on the heels on a 68 per cent increase in dividend payouts recommended by the board after the leading foam manufacturing company grew its bottom-line by 296.3 per cent in the immediate past business year.

The board of Vitafoam Nigeria has recommended payment of a dividend per share of 42 kobo or N525.35 million for the 2019 business year as against 25 kobo per share paid for the 2018 business year. The dividend will be paid in March 2020 after approval by shareholders at the annual general meeting scheduled for March 4, 2020.

The latest dividend represented a significant growth for shareholders given that the company had also distributed bonus shares of one share for five shares for the 2018 business year, which automatically increased shareholders’ holdings by 20 per cent. The 42 kobo per share will be paid on both the previous and bonus shares.

Key extracts of the audited report and accounts of Vitafoam Nigeria for the year ended September 30, 2019 had shown that profit before tax rose by 339.5 per cent while net profit grew by 296.3 per cent. With the dilution, basic earnings per share rose by 219.3 per cent. The company’s top-line had grown by 14.1 per cent, implying that bottom-line performance was driven by growing sales, improved financial management and enhanced operating efficiency.

Group turnover rose from N19.53 billion in 2018 to N22.28 billion in 2019. Profit before tax surged to N3.49 billion in 2019 from N793.85 million in 2018. While tax expenses leapt from N191.92 million in 2018 to N1.03 billion in 2019, net profit jumped from N601.9 million in 2018 to N2.39 billion in 2019. Earnings per share increased from 57 kobo to N1.82 per share. The dividend payout represents 23.1 per cent of the earnings per share, a considerable improvement on a payout ratio of 53.2 per cent in 2018.

Group Managing Director, Vitafoam Nigeria Plc, Mr Taiwo Adeniyi, has said consistent growths in key performance indicators in successive results provide basis for assurance that the company will be able to surpass its previous performance in the current business year.

Adeniyi said the group’s Nigerian businesses are on a stronger footing while three of its seven subsidiaries have started to generate profit.

He said the company will continue to innovate and develop products that will keep it ahead of competition and enable it to grow its turnover while extracting better values for shareholders.

Chairman, Vitafoam Nigeria Plc, Dr Bamidele Makanjuola, said the growth in turnover and profitability reflected the robustness and fundamental strength of the group’s business.

According to him, the company had taken strategic decision and reengineered its business with special focus on products quality, innovation, market differentiation, customer service and consumer education.

“These efforts underscored our long-term priorities of growing revenue, controlling operating costs, and driving higher gross margins. I am pleased to report that we made great strides in cost containment and sustained positive trends in gross margins,” Makanjuola said