The proposed merger between Chemical and Allied Products (CAP) Plc and Portlands Paints and Products Nigeria Plc is expected to be completed in the first quarter of 2021.
This was confirmed by the Managing Director of CAP Plc, Mr David Wright, when he was commenting on the financial performance of his firm in the 2020 fiscal year.
In a statement issued by the Head of Corporate Affairs and Communications at CAP Plc, Ms Chinwe Okpala, the MD expressed confidence that the final regulatory approval would be secured by that time.
“We announced the proposed merger between CAP and Portland Paints and Products Nigeria Plc in the fourth quarter of 2020.
“We have received preliminary regulatory approvals and an order from the Federal High Court to hold a Court-Ordered Meeting.
“[The] merger completion is subject to shareholder approval and final regulatory approvals and we expect to conclude the merger in the first quarter of 2021,” Mr Wright was quoted as saying in the statement.
During the 2020 accounting year, CAP grew its revenue by 3.9 per cent to N8.7 billion from N8.4 billion in 2019, according to the analysis of the results
This rise in revenue was as a result of the strong volume growth achieved by the firm despite the disruptions in April and May by the national lockdown and the #EndSARS protest in October.
Unfortunately, due to input cost pressures on account of currency devaluation and supply chain disruptions, the gross profit weakened by 5.5 per cent to N3.8 billion from N4.0 billion recorded a year ago.
Also, the other operating income reduced to N90 million from N98 million, while the selling & marketing expenses decreased to N564 million from N584 million, with the administrative costs rising by 19.7 per cent to N1.6 billion from N1.4 billion.
In the year, the operating costs, according to the results, stood at N2.2 billion as against N2.0 billion of the preceding year.
Furthermore, the earnings before interest and taxes (EBIT) stood at N1.7 billion in FY20 versus N2.1 billion in FY19 as the net finance income dropped to N251 million from N426 million.
At the close of business on December 31, 2020, the profit before tax of CAP Plc declined to N1.9 billion from N2.6 billion as at December 31, 2019, while the profit after tax went down to N1.3 billion from N1.7 billion.
For Mr Wright, this performance was modest, especially the top-line, when the disruptions of last year are put into consideration.
“We are encouraged by the growth in revenue which has been solely driven by underlying volume growth in line with our strategy,” he said.
“Alongside the rest of the world, we experienced supply chain disruptions which impacted our raw material sourcing and resulted in input costs pressures,” the MD explained.
However, he assured that things would be better this year because the company has “embarked on initiatives focused on mitigating these disruptions.”