Vitafoam GMD says despite COVID-19 turnover grew to N23.44bn in 2020

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By Itohan Abara-Laserian (08152358494)

Lagos, Jan. 15, 2021 Vitafoam Nigeria Plc has attributed its turnover increase of 5.2 per cent from N22.28 billion in 2019 to N23.44 billion in 2020 among other impressive performances to innovation and expansion.

Mr Taiwo Adeniyi, Group Managing Director and Chief Executive Officer, Vitafoam, made the disclosure this in a statement made available to newsmen on Friday in Lagos.

Adeniyi said that the company’s investment in its subsidiaries as a growth strategy was beginning to pay off as the growth in total sales was up by 5.2 per cent.

“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,,” he said.

“This has greatly endeared us to our customers. Vitafoam is not just about only rigid foams. We have 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.”

The Vitafoam boss added: “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.”

Adeniyi said tha in spite of the adverse impact of COVID-19 pandemic, the company’s turnover rose by 5.2 per cent to N23.44 billion in 2020 from N22.28 billion in 2019.

“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 to N11.01 billion from N8.76 billion.

“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. Profit before tax soared by 61.5 per cent to N5.6 billion from N3.5 billion,” he added.

Meanwhile, the manufacturing giant announced that its 5.2 per cent increase in total sales, 8.1 per cent drop in cost of sales, while the 11.4 per cent reduction in finance were rewards for internal cost efficiency.

Specifically, after taxes, net profit soared by 72 per cent from N2.39 billion to N4.11 billion; basic earnings per share increased to N3.05 from N1.82 and net assets per share hit N7.25 in 2020, 54.3 per cent above N4.70 recorded in 2019.

On the strength of the company’s outstanding performance, the board has recommended a cash dividend of N979.4 million for 2020, 64.5 per cent above N595.4 million paid in 2019.

The current dividend translates into 70 kobo per share as against 42 kobo paid in the preceding year.

Mr Oluropo Dada, Managing Director and Chief Executive Officer, Network Capital, said that shareholders would get higher dividends, while the performance translated into higher valuations of investment for analysts and traders.

“It is a remarkable improvement on all the quantitative and qualitative parameters of the company which expectedly translated to better results with bountiful rewards to all the stakeholders.

“Shareholders are going home with higher dividends, while the performance translates into higher valuations of investment for analysts and traders,” Dada said.

The announcement of the results has attracted investors to Vitafoam shares on the Nigerian Stock Exchange (NSE) and positioned it as one of the most stable stocks, with its current net assets per share of N7.25.

Market watchers believe that Vitafoam’s share price is due for re-pricing on the capital market.

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