Vitafoam dropped its audited FY 2024 results a few days ago. While revenue grew year on year, there was a sharp dip in profit due to higher foreign exchange losses and finance costs. In response, the company has cut its dividend. 

About the firm 

Vitafoam Nigeria Plc was Incorporated on 4th August,1962 and listed on the floor of the Nigerian Stock Exchange in 1978. The company produces, polyether, foam products, furniture, upholstery products and adhesives. 

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 Plc. Subsequently both firms were mered. . 

It also has major share in the following sister companies

• Vitapur Nigeria (an insulations products manufacturing company).
• Vitablom (fibre processing and soft furnishing company).
• Vitavisco Nigeria Limited.
• Vitagreen Nigeria Limited.
• Vono Furniture Products Limited
• Vitaparts Nigeria Limited.

Key shareholders are

• Bolarinde Samuel with a 12.03% stake 150,427,902 shares.
• Neemtree Limited  with a 10.02% stake 125,334,977 shares 
• Awhua resources Limited with a 7.86% stake 98,281,981 shares 

The Numbers

Revenue went up by 55.9%  from N52.9 billion in 2023 to N82.6 billion in 2024. This is the highest revenue the group has made in the last 5 years.

Revenue is split between revenue made in Nigeria and revenue made outside the country. 

95.6% or N79.1 billion of the revenue was earned in Nigeria. The rest (N3.4 billion) was made outside the country. 

Profit after tax 

Profit after tax fell from N4.3 billion in 2023 to N952 million in 2024. The sharp decline was due to higher foreign exchange losses and finance costs.

Foreign exchange losses went up by more than 300%  from N3.6 billion in 2023 to N12.7 billion in 2024

Finance costs were up over 200% from N2.2 billion in 2023 to N7.1 billion in 2024. The sharp jump was due to higher interest on loans and overdrafts. 

Empty the sink please

Last year, the group made N422 million allowance for doubtful debt receivables. 

This is money set aside by a company to cover debt that might not be paid by customers over a time period. In essence money it does not expect to collect. 

This year, it made an allowance of N492 million. Management needs to do better in this aspect. 

Dividend cut

The company’s board has recommended a dividend of N1.05 per share  for approval by shareholders. That is a 45 kobo drop from the N1.50 it paid in the prior year. 

• Qualification date is  Friday 14th February, 2025.
• Payment date is Thursday, 6th March, 2025 

It made 29 kobo per share in earnings  in FY 2024, indicating the balance is coming from its reserves.