VITAFOAM NIGERIA PLC announced that there will be a delay in the release of the Company’s Audited Financial Statements for the year ended 30 September 2014 and the Unaudited Accounts for the first quarter ended 31 December 2014.
Vitafoam explained that the delay is as a result of challenges associated with its ongoing migration from Sage Line 500 accounting software to the newly acquired Sage ERP X3 Package. The Company explains that the implementation of the new software has impacted the timelines previously set for the preparation and audit of the year end accounts. The Company is hopeful that the issues will be satisfactorily resolved as soon as possible.
This reasons sounds rather strange in our opinion as we do not understand why a software migration should be delaying the release of an audited accounts. Is it that they had not posted journal entries since they released the half year results and as such can’t run complete reports? Also considering that the old and new software’s were created by the same company Sage, what could be so complicated about the migration and why take so long complete? Isn’t it a shame that this is happening in Nigeria and for a publicly quoted company in this 21st century? The delay in the release of this results would create suspicion in the minds of some investors considering past malpractices from listed companies.
We doubt if Vitafoam will give this sort of excuse if it were to be operating in a highly regulatory industry such as Banking and Financial Services. Even more annoying is the lack of a definite date when they now expect the results to be released. All Vitafoam said in their press release was that they are “hopeful that the issues will be satisfactorily resolved as soon as possible”. The Nigerian Stock Exchange should have also done more by giving Vitafoam a definite deadline to submit the results instead of this infinite timeline (by implication).
Vitafoam reported a 5% drop in EPS when it reported its last result for the 9 months ended June 30th 2014. Vitafoam share price has a 1 year negative return of 27%. The stock is down 11% YTD.
