Shareholders of Vitafoam Nigeria Plc on Thursday approved the company’s N245.70m dividend payout for the financial year ended September 30, 2013.
The shareholders gave the approval at the group’s Annual General Meeting held in Lagos.
Vitafoam’s financial results for the year showed that its turnover rose by 12.85 per cent to N16.339bn, from the N14.479bn it recorded in the year ended September 30, 2012.
However, the group witnessed a decline in its profit before tax and profit after tax. While its profit before tax fell by 23 per cent to N435.5m in the year under review, the group’s profit after tax was down by 18 per cent from N501.5m to N410.3m.
The Chairman, Board of Directors, Vitafoam, Dr. Bamidele Makanjuola, explained that the board recommended the dividend payment because it was optimistic that the company was well-positioned to deliver impressive returns in the years ahead.
He said, “Despite the decline in profit, the Board remains optimistic that resolute implementation of our various expansion strategies will continue to propel our brand to develop new opportunities for growth. With a focused expansion plan, qualitative service delivery and strong brand equity, the company is well placed to deliver impressive returns in the years ahead.”
Makanjuola told the company’s shareholders that the foam industry experienced stiff competition during the year ended September, 2013.
He added that the situation was worsened by the activities of counterfeiters, which posed a major challenge to the Vitafoam brand.
He explained that while the efforts of the Standards Organisation of Nigeria and other government agencies to combat the menace were commendable, “it is worthy of mention that product adulteration is a more organised and structured racket than generally perceived.”
According to him, a sustained approach in collaboration with real operators in the sector is required to combat the menace.
For its part, he said Vitafoam leveraged its large portfolio of innovative products to reduce the impact of adulteration.
“Efforts are also being made to continually differentiate our range of products through innovations and by showcasing their unique qualities,” he told the shareholders.
The Vitafoam Chairman, who stressed that the group’s investments were bound to boost its profits soon, gave the assurance that the company was in a good position to overcome the challenges before it.
He said, “Despite these challenges, the business remains resilient and continues to offer promise for growth and higher returns. Our expansion goals are tailored to position your company to take advantage of the emerging opportunities.
“The main thrust is to diversify operations into other areas that are potentially lucrative and less vulnerable to extraneous factors while reinforcing our position in the industry through innovation.”
Makanjuola, who said Vitafoam also had plans to explore opportunities in Sierra Leone (in the first quarter of 2014) and other neighbouring countries, added that the company also planned to better manage its finances.
He said, “As a measure to improve our profit outlook in the new fiscal year, efforts will be geared to creatively manage the company’s financing to ensure proper alignment of preferred financing option and to optimise the full benefits of our funding plans.”