Vitafoam Nigeria Plc has announced the introduction of eight new products into the market. According to the management of Vitafoam, the new offerings will help it expand its revenue base, enhance customers’ healthy living and boost shareholder value.
The new products include Vita Pearl, a pillow that regulates temperature and draws moisture from the body, assorted customised beds, Sofas, Trifold mat for leisure, Reading chairs, three specialised mattresses including orthopedic and classic and various polyurethane sandwich panel steels.
The Group had consistently made losses in the last three years. Vitafoam made a loss after tax of N71.9 million in 2015, N32 million in 2016 and N127 million in 2017. However, results for the 9 months ended June 2018 show the group is on the path of profitability once again as its profit after tax stood at N515 million in 2018 compared to N133 million made in the prior year.
The group consists of Vitafoam Plc (the company), as well as subsidiaries controlled by the company, including Vono Products Plc which it merged with in 2015. While Vitafoam (the company) has consistently made a profit, its subsidiaries have struggled. Last year’s results show most of them made losses.
Despite the impressive results, a look at the financial statement of the company shows that the finance costs are still on the high side, though they dropped year on year. Results for the 9 months ending June 2018 show that finance costs amounting to N885 million took up 52.1% of the company’s operating profit of N1.1 billion, as against 79% for the corresponding period of 2017. Full year results for the period ended September 2017, show that finance costs hit N1.3 billion, indicating that the firm may have lower finance costs this full year.
Interestingly, the company, perhaps in a bid to win more customers, has doubled down on advertising. Advert expenses surged from N76.5 million in 2017 to N126 million in its 9-month period ended 30th June 2018. Advert expenses for the full year ended September 2017 show that the group spent N134 million.
The group has been consistent in paying dividends, despite the fluctuating profitability. The company paid a dividend of N0.15 per share for the 2017 financial year, the board has also recommended a dividend of 260 million representing N0.25 for the for the financial year ended 30th September 2018 also approved the bonus issue of 1 new share for every 5 existing ordinary shares to shareholders. Its share price hit a year high of N4.99 per share early this year, though the stock has dipped in inter-day trading and it is currently trading at N4.49 with a one-year return of 60.04%. Its shares also gained by 46.7% in 2018.
According to the Group Managing Director/Chief Executive Officer, Vitafoam Nigeria Plc, Mr. Taiwo Adeniy the company will continue to leverage on research and development in order to keep abreast of changing dynamics of customers’ demand.
‘As soon as we have introduced a Product into the market, we are also working on some other ones. It is difficult to fake our products because as for us product differentiation is our strategy,’-He said.
Vitafoam was established in 1962 by two giants: British Vita and Unilever. The Nigerian Promoter Decree No. 3 of 1977, mandated companies to sell sixty percent of their share to the Nigerian public, thus in compliance with the decree, Vitafoam became a public company in 1978 and listed on the floor of the Nigerian Stock Exchange in 1978.
In 2008 and 2009, Vitafoam Ghana Limited and Vitafoam Sierra Leone Limited respectively were established. In 2010, Vitafoam became a major shareholder of Vono Products and established two sister companies: Vitapur Nigeria (an insulation products manufacturing company) and Vitablom (fibre processing and soft furnishing company). In 2012, Vitafoam established its youngest inclusion; Vitavisco for production and sales of Viscoelastic foam and Latex products.
