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Has Vitafoam finally left stormy waters?



Last week, Vitafoam Nigeria Plc hit a year high of N3.60. Year to date, the stock is up 20%.

The uptick in price also coincides with the company releasing its results for the 9 months ended June 2018. They showed improvement in both the top and bottom line, which hints at the possibility of the company delivering one of its best results in half a decade.

Profit is back up

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. Results for the 9 months ended June  2018 show that 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 profit, its subsidiaries have struggled. Last year’s results show most of them made losses

Was advertising a key factor?

The company, perhaps in a bid to win more customers, doubled down on advertising. Advert expenses jumped from N76.5 million in 2017 to N126 million in 2018. Advert expenses for the full year ended September 2017 show that the group spent N134 million.

Finance costs remain high

Despite the impressive results, 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.

Hopes of a better dividend

Vitafoam has been consistent in paying dividends, despite the swings in profitability. The company paid a dividend of N0.15 per share for the 2017 financial year from earnings of N0.18. Year on year, earnings per share, has increased from N0.16 to N0.62.

Share price is at an all-year high

Vitafoam’s share price has hit a year high of N3.60 per share, though the stock has dipped in inter-day trading.

About the company

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.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training.He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE).He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy.You can contact him via [email protected]

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Real Estate

FG to unveil dedicated portal for sale of houses to Nigerians

The Federal Government has announced plans to launch a dedicated web portal for the sale of buildings to Nigerians in the next few weeks.



Nigeria needs N1.5 trillion within the next 3 years to fix roads - Fashola

The Federal Government has announced plans to launch a dedicated web portal for the sale of buildings to Nigerians in the next few weeks.

The platform is expected to help contributors to the National Housing Fund (NHF) access mortgage loans on a first-come, first-serve basis.

This disclosure was made by the Minister of Works and Housing, Babatunde Raji Fashola while speaking at the ninth meeting of the National Council on Lands, Housing and Urban Development in Jos, Plateau State.

Fashola, who was represented by the Minister of State for Works and Housing, Abubakar Aliyu, pointed out that the ministry is currently at the completion stages of the first phase of the national housing programme in 34 states of the federation, which provided land for it.

He said, “We urge the state governments to alert their residents to this opportunity for interested persons to apply.”

Fashola commended the Federal Mortgage Bank of Nigeria (FMBN) for being at the forefront of the cooperative housing initiative at the federal level, adding that it has the advantage of allowing cooperative members to choose what they design and build to fit their budgets.

They can leverage their members to get group discount for the purchase of building materials as well as the engagement of contractors.

Fashola disclosed that FMBN as the driver of the housing initiative has engaged 86 co-operatives in projects; approved N35, 784 billion cumulatively; disbursed N10.95 billion; and processed as at January, 57 co-operative housing development loans.


Fashola emphasized that what the Federal Government can do directly in housing is limited compared to what states can do, just as state governments are also limited, compared to what the private sector and individuals can do.

He said, “The majority of houses available for sale or rent belong to individuals and private companies compared to what states or Federal Government has available. Therefore, many of the tenants who owe rent, who face eviction or who seek to rent or buy property are dealing with private citizens or companies and less so with government agencies.’

My recommendation for improving access and affordability to housing in the Covid-19 era is for private companies and individuals to give back some of what they control to citizens in the way the Federal Government has given back to citizens some of what it controls.’’

He explained, “for example in cases where the rent of businesses or individuals are due for renewal, the private landlords can give back, by accepting monthly, quarterly or half-yearly rent instead of one year, two or three years rent in advance.”

Bottom line

Nigeria has been bedevilled by a housing crisis that has left Africa’s most populous nation ill-equipped to properly provide accommodation for its citizens and inhabitants.

Some of the housing problems in the country include unresolved rent tenure arrangements, high cost of building materials, access to infrastructure, deficiency of housing finance arrangements, stringent loan conditions from mortgage banks, time to process legal documents and inadequate government housing policies.

Jaiz bank

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Covid-19: Nigeria committed to procuring 29 million J&J vaccines

The Nigerian Government is still committed to acquiring 29.59 million doses of Johnson & Johnson covid-19 vaccines through the Afrixem Bank AVAT initiative. 



AstraZeneca suspends COVID-19 vaccine final stage trial over safety concerns, COVID-19: J&J starts vaccine trials on humans after success on monkeys

The Nigerian Government says it is still committed to acquiring 29.59 million doses of Johnson & Johnson covid-19 vaccines through the Afrixem Bank AVAT initiative.

This was disclosed Mrs Zainab Ahmed, Minister of Finance at the recent ‘Collaborative Africa Budget Reform Initiative (CABRI) General Assembly webinar.

What the Minister said

“Therefore, the supplementary budget for COVID-19 vaccines will cover the cost of additional vaccines over and above those provided by COVAX, as well as the full cost of operations and logistics for delivering the vaccines around the country.

Already, the sum of N29.1 billion has been released from the Routine Immunization budgetary provision (Service Wide Vote) to the National Primary Healthcare Development Agency (NPHCDA) as an advance for the operational cost of deployment of the COVID-19 vaccines. The N29.1 billion represents about 52 percent of the amount required over 2021-22,” she said.

She added that FG plans to vaccinate 70 percent of eligible (18 years and above) Nigerians over the 2021 and 2022 fiscal years, with the COVAX agreement willing to cover 43.1 million of the eligible population.

In case you missed it

The World Health Organization (WHO)  announced the approval of China’s Sinopharm vaccine for Covid-19 vaccination. The vaccine is reported to have 79% efficacy against covid.

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