Vitafoam increases dividend as profit rises by 296 per cent

By Taofik Salako, Capital Market Editor

Vitafoam Nigeria Plc yesterday declared a 68 per cent increase in dividend payouts to shareholders after the leading foam manufacturing company grew its bottom-line by 296.3 per cent.

Shareholders will receive 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 new dividend represents 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 showed 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.

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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.