Vitafoam profit slips on insecurity, cost of raw materials

The profit margin of Vitafoam Nigeria plc for the financial year ended Sep­tember 30, 2012 was ad­versely affected by several challenges in the operat­ing environment, some of which include insecurity that affected distribution of goods and rising cost of raw materials inputs.

Some of these costs could not be passed to consumers in view of the company’s desire to remain competitive in products pricing.

The board and manage­ment of Vitafoam Nigeria plc disclosed this in Lagos while presenting the finan­cial report of the company to shareholders at its 51st annual general meeting, noting that it will continue to take proactive steps towards ensuring that the company remains ahead of perennial challenges and sustain re­turns to shareholders.

Though, Vitafoam turnover rose marginal­ly from N13.979 billion in 2010/2011 to N14.126 billion in the year under review, its operating profit reduced from N970.25 million in 2010/2011 to N857.89 mil­lion in 2011/2012.

Profit after tax de­clined from N673.02 mil­lion to N546.75 million in 2011/2012. As a result of the performance achieved by the company in the financial year ended September 30, 2012, the board got share­holders approval to pay 30 kobo dividend per share valued at N245.7million.

“A number of pace setting initiatives are being imple­mented to maintain market leadership in the face of growing competition.

The comfort centre model which has created brand visibility for the company is being fine-tuned in line with international standards. The free 24 hours delivery from our comfort centres is expected to further confirm the company as a comfort solution provider. We have also developed the Vita shop concept to stimulate entre­preneurial spirit and further increase our visibility at ma­jor streets across the country.

The Vita shops are oper­ated by private entrepre­neurs under carefully articu­lated guidelines,” Samuel Bolarinde, chairman, Vita­foam Nigeria plc said at the meeting.

To counter the activi­ties of counterfeiters and fakers of its products and sustain the brand value, the company has launched an IT-driven anti-adulteration campaign nationwide which allows a consumer to verify the authenticity of a product at the point of purchase.

According to Bolarinde, “In the coming year, ef­forts will be geared towards consolidating the various investments for optimal result. It is projected that the prevailing uncertainties in the global economy will persist resulting from in re­duced public spending and consumption rate across the globe.

We will however continue to leverage our brand capital and the group synergy to ensure that the company stays resilient to anticipated impact of uncertainties in the global and local operat­ing environment.”

IHEANYI NWACHUKWU