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Vitafoam Nigeria: Sustaining dividend payout, increase in profit



By Kayode Tokede

Vitafoam Nigeria Plc drew on increasing cost efficiency to optimise modest revenue growth into significant improvement in profitability, enabling the company to increase dividend payouts by about 67 per cent while providing four-fold assurance on dividend sustainability.

With the exception of a tint of increased gearing, the foam-manufacturing group recorded a well-rounded performance with considerable improvements in revenue, profitability, returns and balance sheet strength.

Audited report and accounts of Vitafoam Nigeria for the year ended September 30, 2020 showed that revenue  growth of 5.2 per cent while 8.1 per cent drop in cost of sales and 11.4 per cent reduction in finance cost boosted the overall bottom-line performance.

With 8.4 percentage points added to underlying profit margin, the board of directors increased dividend payout by 67 per cent, putting the company’s yield considerably above current rates in the fixed-income markets.

At N7.25, the net assets per share provided a base for possible further re-pricing of the company’s shares at the stock market.

All-round growth in profitability

Vitafoam recorded well-rounded profitability with modest sales growth, despite the adverse impact of COVID-19 pandemic.

Revenue rose by 5.2 per cent from N22.28 billion to N23.44 billion. Cost of sales dropped by 8.1 per cent from N13.52 billion to N12.43 billion. Gross profit thus rose by 25.7 per cent from N8.76 billion to N11.01 billion.

Administrative and marketing expenses increased by 10 per cent to N5.18 billion in 2020 as against N4.71 billion in 2019. Non-core business income rose by 52 per cent from N491 million to N745 million. Interest expenses reduced by 11.4 per cent from N1.05 billion to N930 million.

With these, profit before tax rose by 61.5 per cent from N3.5 billion to N5.6 billion. After taxes, net profit also jumped by 72 per cent from N2.39 billion to N4.11 billion.

Basic earnings per share thus increased from N1.82 to N3.05. Net assets per share rode on the back of high retained earnings to N7.25 in 2020, 54.3 per cent above N4.70 recorded in 2019.

With the expansive growth in the bottom-line, the board of the company has recommended distribution of N979.4 million as cash dividends for 2020, 64.5 per cent above N595.4 million paid for the 2019 business year. This implied a dividend per share of 70 kobo for 2020 as against 42 kobo paid in 2019.

Underlying ratios showed similar positive outlook. Gross profit margin increased from 39.3 per cent to 47 per cent.

Pre-tax profit margin- which measures average profit per unit of sales and serves as a major indicator of profitability, leapt to 24.1 per cent in 2020 as against 15.7 per cent in 2019. Return on total assets improved from 25.3 per cent to 26.1 per cent.

Return on equity also increased from 40 per cent to 45.4 per cent. Even with the increase in dividend payout, the sustainability improved with a dividend cover of 4.36 times in 2020 as against 4.33 times in 2019.

Stronger balance sheet

Group total balance sheet size grew by 56.5 per cent from N13.82 billion in 2019 to N21.64 billion in 2020. Total assets growth was driven by significant increases in current and non-current assets. Total liabilities also rose by 60.4 per cent from N7.85 billion in 2019 to N12.6 billion in 2020.

While the paid up share capital remained unchanged, total equity funds rose by 51.4 per cent from N5.97 billion to N9.04 billion.

With 35 per cent increase in bank loans, the group’s financing structure showed slight increase in leverage, though the internal financing structure remained considerably high.

The proportion of equity funds to total assets dropped from 43.2 per cent in 2019 to 41.8 per cent in 2020. Long-term liabilities/total assets ratio declined from 56.8 per cent in 2019 to 58.2 per cent in 2020.

Current liabilities also increased to 39.8 per cent of total assets in 2020 as against 37.3 per cent in 2019. Debt-to-equity ratio declined to 46.3 per cent in 2020, as against 35.9 per cent recorded in 2019.

Staff productivity and cost efficiency improved considerably during the year, providing the headroom for increased profitability and returns to shareholders.

Total number of employees increased from 607 persons in 2019 to 652 persons in 2020. Total staff costs also improved from N1.92 billion to N2.05 billion.

Average contribution of each employee to pre-tax profit rose from N5.76 million in 2019 to N8.66 million in 2020. Average staff cost per head however slipped marginally from N3.16 million in 2019 to N3.14 million in 2020. Total cost of business, excluding finance charges, in relations to sales improved from 81.8 per cent in 2019 to 75.1 per cent in 2020.

Modest liquidity

The liquidity position of the company improved considerably during the period with better financial coverage and working capital. Current ratio, which relates easily available finances to similar liabilities, increased from 1.6 times in 2019 to 1.8 times in 2020. The proportion of working capital to total sales improved from 12.8 per cent to 30.8 per cent. Debtors/creditors ratio stood at 111.1 per cent in 2020 compared with 245.5 per cent in 2019.

The latest audited report showed resilience and underscored the focused investments and expansions in value-adding businesses. In the increasingly competitive and constraining business landscape, companies with diversified products and long-established cost management structure stand greater chance of winning the headwinds. There is considerable untapped potential in the group’s emerging protective and insulation businesses while the foam, bedding and furniture businesses are in strong market-leading positions. Expected boost in intra-Africa trade should further open up opportunities to scale up market share. Overall, the outlook is positive.

 About Vitafoam Nigeria

Vitafoam Nigeria is Nigeria’s leading foam-manufacturing group. Incorporated on August 4, 1962 and listed on the Nigerian Stock Exchange (NSE) in November 1978, Vitafoam is a wholly Nigerian-owned company with highly diversified shareholding structure. Vitafoam engages in manufacturing and distribution of flexible, reconstituted and rigid foams, all in various forms and designs that make the group a one-stop cushion supermarket. It had recently integrated a wide range of furniture designs and related products, providing the group a lifelong value chain of birth, education, work and leisure. With subsidiaries in Ghana and Sierra Leone, other subsidiaries in Nigeria include Vita Blom, Vita Visco and Vitapur.

There were no changes in the board and management of the company. Mr. Bamidele Makanjuola remains the chairman while Mr Taiwo Adeniyi still leads the executive management as group managing director. The company broadly complies with the extant code of corporate governance for public companies.


Abiodun eulogies Alaba Lawson, says legacy will be sustained



Ogun State Governor, Prince Dapo Abiodun, on Friday said that the late Iyalode of Yoruba land, Chief Mrs. Alaba Lawson left a legacy that would be a reference and an inspiration to generations yet unborn.

Abiodun stated this at the funeral and outing service held at the African Church, Cathedral of St. James, Idi-Ape, Ago-Oko, Abeokuta, even as he noted that the late educationist life and times are inspiring narrative of great accomplishments.

According to the governor, as the first female president of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), former Chairman, Board of Governing Council, Moshood Abiola Polytechnic, Abeokuta, Fellow and Council Member, Institute of Directors, Chairman Board of Trustees, Nigerian Quality Infrastructure Forum, among others, the deceased dedicated her life to serving the nation, Ogun State and the society at large.

He added that her accomplishments are extraordinary and challenging to replicate.

The governor said: “Chief Alaba Lawson was a woman of remarkable achievements, leaving indelible marks and lasting impact, not just in our dear State, but throughout the entire country. A great philanthropist who garnered numerous accolades throughout her life time and her contributions to the society were immense.

“The Lawson family of Abeokuta has lost a true gem, and the Association of Academics in Nigeria mourns the loss of a distinguished member with exceptional intelligence. Her eventful life will continue to inspire many especially the younger generation.”

He described the late Alaba Lawson as the cultural ambassador who held on to her root by promoting the cultural values and the Adire fabrics wherever she went, adding that as an advocate of women rights, she was fearless and tireless and was always ready to sacrifice for the benefit of the society.

Mrs. Lawson, the governor emphasized, was a loving mother to her children and those of others, saying she lived an impactful life, and was a strong supporter of the present administration, assuring that his administration would do the needful to sustain her legacy.

“We as government, we will do the needful in sustaining your legacy. Let me assure you that we will continue to ensure that we sustain the legacy of our own dear Iyalode Oluwaseun Alaba Lawson,” Prince Abiodun said.

In his sermon, the Primate, African Church, His Eminence Julius Olayinka Abbe, said the late Alaba Lawson lived an impactful life as she was kind and generous to the people, the church and the society.

Iyalode Lawson, according to the Primate, was a defender to the defenceless, a reliable and worthy mother who was not only interested in the welfare of her biological children, but to anyone who crossed her path during her life time.

Taking his text from the Book of Matthew 5 verse 8, the Cleric decried the attitude of some wealthy individuals who care less about the well-being of others, noting that late Alaba Lawson, apart from being a well known educationist, an industrialist with wide network of connections, was a beacon of hope.

He added that her death has created a big vaccum that would be difficult to fill.

He called on the wealthy and those in authority, to work towards alleviating the sufferings in the land brought about by the removal of subsidy on petroleum products, saying many people are struggling to survive due to the hardship.

The service had in attendance the former President, Chief Olusegun Obasanjo and his wife, Chief (Mrs) Bola Obasanjo; former Governor of the state, Ibikunle Amosun his wife, Olufunso; the wife of the Ogun State Governor, Mrs Bamidele Abiodun, amongst others.

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Ministry sensitizes staff on cost cutting in governance



By Matthew Denis

The Head of Efficiency Unit Federal Ministry of Finance, Busola Ajiboye said that activities of Efficiency Unit are effectively helping the Federal Government to cut down the cost of governance.

Ajiboye made the disclosure in Uyo, the Akwa Ibom State capital today during a one-day sensitization exercise on Cost Cutting Measures in Governance.

Ajiboye in her welcome address said that, the Efficiency Unit through its critical role in enhancing the “prudent and transparent management of public resources” in the country has efficiently reduced wastages and improved value for money in government spending, adding that, the Unit has continually contributed significantly towards achieving the nation’s development goals.

She noted that the Unit’s main objective was to share knowledge on cost cutting devices through sensitisation programme such as this, reviewing all government overhead expenditures with a view to reducing wastes, promoting efficiency and ensuring quantifiable savings for the nation.

She added that the participants would be equipped with knowledge and tools at the end of the sensitisation programme to contribute to the efficient and effective use of public resources, noting that, cutting cost and blocking of loopholes is what the country needs at the moment so as to save for the rainy day.

She further explained that the aim of the workshop was to explore opportunity to learn, collaborate and make positive impact on efficient financial management, adding that, participants would also learn various initiatives, policies and strategies for ensuring optimal utilization of resources at every level of government.

She explained that it would serve as a platform for engaging in meaningful dialogue, sharing of experiences and fostering collaborations across different sectors.

The Head of Efficiency Unit disclosed that the Efficiency Unit would be established in all government’s Ministries Departments and Agencies (MDAs).

Mr. Fatimehin Adebayo, Assistant Director Efficiency Unit Federal Ministry of Finance in a vote of thanks said, “The workshop was timely because of the President Bola Ahmed Tinubu’s Renewed Hope Agenda whose core objective is cutting cost, prudent spending, blocking of loopholes and maximising available resources.” Adebayo also added, “Though the challenges are many but we will get there.”

He commended the Honourable Minister of Finance and Co-ordinating Minister of the Economy, Wale Edun, the Permanent Secretary Finance, Okokon Ekanem Udo, the Honourable Commissioner of Finance, Akwa Ibom State, Dr. Nsikan L. Nkan, the Permanent Secretary Finance and Accountant General of Akwa Ibom State, Pastor Uwem Andrew -Essien, the government and people of Akwa Ibom State, the workshop participants for their support and encouragement for the success of the sensitisation programme.

The workshop was well attended by representatives of Federal and State Governments Ministries, Departments and Agencies (MDAs).

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Crude Oil Theft: Navy nabs oil vessel with 17 crew



The Nigerian Navy says its Forward Operating Base (FOB), IGBOKODA, in Ondo State, hasi n the early hours of Thursday apprehended a 77-meter-long Motor Tanker (MT) VINNALARIS 1 LAGOS involved in crude oil theft.

This is contained in a statement issued by the Director of Naval Information, Commodore Adedotun Ayo-Vaughan, in Abuja.

Ayo-Vaughan said the vessel, which had 17 crew members onboard at the time of arrest, was caught engaging in illegal siphoning of crude oil from one of the well heads at EBESAN oil field about 7 nautical miles off the coast of Awoye riverine community in Ilaje Local Government Area of Ondo state.

He said the arrest of the vessel followed credible intelligence received by the Base on the illegal activities of crude oil thieves at the location, which informed the swift deployment of FOB IGBOKODA personnel to nab the vessel and her crew.

“Notably, as the anti-Crude Oil Theft Patrol Team of FOB IGBOKODA approached  MT VINNALARIS 1 LAGOS, the 2 x boats attached to the vessel fled on sighting the naval personnel, which confirmed the engagement of the vessel in illegality.

“Accordingly, on arrival at the scene, it was discovered that the vessel was actively involved in siphoning crude oil from both sides of the well head.

“Consequently, upon further search and interrogation, it was further discovered that the vessel had onboard 17 crew members of Nigerian nationality.”

Ayo-Vaughan said the vessel had storage capacity of about 15,000 metric tonnes, adding that it loaded about 500 metric tonnes of crude oil as at the time of arrest.

According to him, the arrest of MT VINNALARIS 1 LAGOS attests to the Nigerian Navy’s determination to curb crude oil theft and all manners of illegalities in Nigeria’s maritime domain.

He warned that the Nigerian navy would use all legitimate means at its disposal to track and arrest perpetrators of illegalities in Nigeria’s maritime environment.

He solicited the cooperation of patriotic and well-meaning members of the public to promptly report any form of criminality, especially in the coastal communities to the navy for necessary action.

According to him, it is believed that Tantita Security Service (TSS) is involved in these illegalities because Awoye riverine area which is close to the place of arrest is covered by TSS.

“Again, it was upon the arrest of the vessel by the Nigerian navy that TSS began to raise false alarm, totally unfounded and indeed mischievous.

“Nonetheless, the Nigerian navy remains resolute in the pursuit of her constitutional mandate for the protection of Nigeria’s Maritime Environment for national economic development and prosperity,” he stated.

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