Shares of Vitafoam jumped past its five- year high after the foam maker on Monday reported its best start to a business year since 2015, at least.
The company’s shares surged 6 percent to hit N5.3 a unit, the highest level since 2016 according to Bloomberg data. Meanwhile, the price gained the most since a 6.82 percent when Vitafoam first traded this year.
Vitafoam has now gained 20.45 percent on year-to-date compared to broader gains of 10.10 percent in the Nigerian stock market.
The day’s brilliant performance followed a 127 percent surge in the company’s profit announced for the first quarter ended December 2019. This is the fastest Vitafoam has grown in corresponding periods since 2015 at least.
Read also: Vitafoam hits 5-year high on the back of impressive full-year result
First- quarter profit crossed the half-a-billion mark for the first time in the period covered (2019 Q12014 Q1) at N819.67mn, despite a 6.33 percent decline in Vitafoam sales to N5.98bn.
Sales was dragged by the underperformance of the company’s main business segment involving sales of foams and other products while its supporting segment noted improvement.
On the back of cost management Vitafoam was able to report a double-digit increase in gross income, company financials show.
Cost of raw materials fell by nearly 3o percent to drag the overall cost of
by similar measure to N3.43bn.
This resulted in a gross margin increase of 16 percent points meaning Vitafoam earned a gross profit of N43 from every N100 sales in made in the period compared to just N27 per hundred naira sales in the comparable period of 2018.
Operating profit nearly doubled in the period to N1.36bn as the jump in gross profit to N2.55bn outweighed increase in selling, general and administrative expenses as well as lower-income from other sources.
Finance cost in the period declined significantly to N182.67m from N229.71m, which led to a 130 percent rise in profit before tax.
Tax expenses rose 138 percent to N360m, bringing earnings per share to 62 kobo from 33 kobo year-on-year.
In the quarter, the company’s total asset rose roughly N3.5bn to N17.219bn while total liability rose about N2.6bn to N10.411bn. The puts shareholders equity to N6.8107bn, 14 percent in the quarter.
In the business year ended September 2019, Vitafoam grew profit by most in over 5yrs to outdo billion-naira mark
Vitafoam posted an annual profit of N2.46bn for the business year; an increase of more than 309 percent from the previous year and the fastest bottom-line growth in at least five years.
Vitafoam makes and sells mattresses, pillows, sponges, carpet underlays, mats, foam blocks, and other foam products.
