THE board and management of Vitafoam Nigeria Plc yesterday reassured shareholders and other stakeholders that the company would continue to be innovative in delivering quality products and services to customers in order to ensure sustainable growth.
The reassurance came as shareholders yesterday at the annual general meeting in Lagos approved 68 per cent increase in dividend payout. Shareholders approved 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 new dividend represented 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.
Shareholders commended the company’s board and management for the good performance and urged the directors to continue to explore ways to improve performance.
Shareholders advised the board and management to strengthen the subsidiaries in order to expand the company’s revenue base.
Addressing the shareholders, Chairman, Vitafoam Nigeria Plc, Dr Bamidele Makanjuola, said the performance of the company was due to leadership ingenuity, innovation and passion of its young managers despite the inclement operating environment.
“Our outstanding performance is not just because we utilised the loans we took from the Bank of Industry and other banks to create value for shareholders but ingenuity of the company’s leadership. Vitafoam is blessed with level headed, innovative and passionate youths that form the core of our managers. The board also comprises wise elders who are always willing to assist the management, “Makanjuola said.
He said the remarkable improvement in performance reflected the effectiveness of improved funding efficiency and impact of the strategic initiatives implemented to address the protracted challenge of low margins in the business.
According to him, the company leveraged the Bank of Industry’s long -term loan facility and other flexible financing windows by negotiating better trade terms with foreign suppliers of raw materials, thereby sidestepping the middle men. The resulting reduction in the cost price of raw materials impacted positively on gross margin.