Vitafoam Nigeria reports 72% increase in profit, recommends N979m dividend


By Kayode Tokede

Shareholders of diversified manufacturers of foams and other household equipment, Vitafoam Nigeria Plc, will receive a dividend of N979.4 million for the year ended September 30, 2020.

The dividend, which shows an increase of 64.5 per cent, above the N595.4 million paid in 2019, translates into 70 kobo per share as against 42 kobo paid in the preceding year.

The board of the company recommended the higher dividend following the performance recorded in the year.

Vitafoam had posted a revenue of N23.44 billion, up by five per cent from N12.281 billion in 2019.

Profit before tax rose 62 per cent to N5.647 billion, from N3.496 billion, while profit after tax grew faster by 72 per cent from N2.56 billion to N4.108 billion.

The higher growth in bottom-line resulted from an 8.1 per cent drop in cost of sales and 11.4 per cent reduction in finance cost. Basic earnings per share increased from N1.82 to N3.05 and net assets per share hit N7.25 in 2020, 54.3 per cent above N4.70 recorded in 2019.

Commenting on the results, the Group Managing Director and Chief Executive, Vitafoam Nigeria Plc, Mr. Taiwo Adeniyi, said innovation is the drive.

“As a matter of corporate policy, we do continuous improvement on our products. We sell high margin products. We are highly connected with our customers. We know their different needs and as such our products always gain acceptance in the market. Our foams and other products meet specific needs.

“Last year, we launched Buy Rights when our research revealed that different weights require different types of foams. We do not just sell to customers, we offer health counseling to advise on the specific foam for individual customers. This has greatly endeared us to our customers,” he said.

Adeniyi explained that Vitafoam is not just about only rigid foams, but has strong footing in furniture and other household equipment such as Sandwich panels, insulation board and spray foam.

“Quality product is our second name. Our current performance was not driven by sales due to COVID-19. The margin from this is insignificant and we even donated foams to Lagos State government as our corporate support. Our investment in the subsidiaries as a growth strategy is beginning to pay off. All of them have turned profitable.

“We are not insulated from the tough operating environment as all the indices that should drive growth in the manufacturing sector are weak.

“But due to our innovative efforts, trust on the part of our customers and of course divine grace, our balance sheet today is one of the strongest in the industry. We have capacity to sustain the trajectory and we shall continue to reward our shareholders accordingly,” the MD/CEO said.