Vitafoam Nigeria Plc is yet to release its 2014 FY results for the period ended September 2014. If you are wondering why, well it is because they are encountering difficulties in their transition to Sage ERP. The reasons raised some valid concerns as investors don’t understand why results should be delayed for such a reason. This also raised genuine concerns about the company’s results and whether this has something to do with it.
Skeptics now have more reasons to be worried going by an article on Thisday where the Group Managing Director made suggestive remarks regarding the performance of their subsidiaries and perhaps Vitafoam itself. Here is what he had ton say
‘The current devaluation of the naira has had a major impact on our business because most of our raw materials are imported and has escalated the cost of our operations. We have to go back to the drawing board to weather the storm. The dwindling disposable income in the economy has reduced the buying power of consumers. The environment is very challenging but we are up to the task,”
“Our subsidiaries are still at their gestation stages , even if they are not making fantastic profits now, we are optimistic about the potentials they possess for the future. Our company is on the path of growth looking at our figures, although the dwindling disposable income has impacted business operations but we have looked inward to strategise to meet the expectations of our stakeholders in the country.”
“We have a trading outfit in Ghana and the products that we sell in Ghana are exported from our factory here in Lagos. We have a state-of-the-art factory in Sierra Leone but because of the current situation in the country, we are operating on a low, but we believe if the situation in the country improves, our company will go full blast. Our factory in Sierra Leone was set up to serve the West African corridor where we supply to other countries around Sierra Leone,” he said.
This is by no means a confirmation that the results will be bad but it is enough to raise concerns if we were shareholders.