Listed manufacturer of foam products, Vitafoam has announced its profit quadrupled and crossed a record billion naira-mark in 2019 after company sales jumped 14 percent.
Vitafoam posted an annual profit of N2.46bn for the business year ended 30 September 2019. This is 309 percent more than it made in the previous year and the fastest bottom-line growth in at least five years.
Price of Vitafoam shares rose by 10 percent, the maximum allowable limit for a trading session, to N4.4 per unit following the announcement of the results on Tuesday.
The stock beat the general market performance with a year’s return of almost 20 percent while the NSE’s main equity gauge lost nearly 15 percent in 2019.
The manufacturer grew revenue by 14 percent to N22.28bn with sales from foams and other products up by 10 percent year-on-year while Freight income which was dormant in 2018 contributed N779.328m in 2019.
The addition from the latter segment was a significant boost to Vitafoam earnings. Cost of sales declined by 1.15 percent which resulted in an increase in gross profit by almost 50 percent to N8.76bn.
The results meant that for every N100 sales Vitafoam was able to retain N39.33 after settling direct costs. This is an improvement compared to a gross margin of 29.98 percent or N29.98 per hundred naira sales.
Profit from operating activities was 112.44 percent higher in 2019 compared to N2bn recorded in the preceding year.
Vitafoam also noted a 27.62 percent rise in its finance income although net finance income slumped almost 27 percent after finance cost rose by 23.79 percent. Net finance income stood at N948.67 million compared to N1.298bn in 2018. Profit before tax grew by 340.36 percent while Earnings Per Share (basic) jumped 222.1 percent from 56.64 kobo to N1.8244.
Vitafoam announced that its board recommended a dividend of N525m which would translate to 42kobo per share for the 2019 business year.
The dividend is subject to shareholders approval and withholding tax. The manufacturer also advised the Exchange and investing public of the appointment of Achike Charles Umunna as a non-executive director with effect from December 19, 2019.
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