Vitafoam Nigeria Plc has announced that it has embarked on strategic plans that would enable it increase shareholder value with expected strong earnings from the subsidiaries.
Besides, the company has assured elated shareholders that the board and management will look into the popular demand to float a rights issue to strengthen its working capital.
The company’s performance last year, showed that most of its subsidiaries were operating profitably, while others have strong potential to enhance its profitability.
Addressing its shareholders at the yearly general meeting in Lagos at the weekend, the Chairman, Dr Bamidele Makanjuola, explained that a strategic review of Vitafoam’s business units to ascertain continued alignment with broader transformation objectives was undertaken to position it for accelerated profitability.
According to him, the company had completed its expansion project, and had begun to consolidate for optimal performance, as reflected in the current status of some subsidiaries.
“Vitapur Nigeria Limited has become a source of hope and inspiration. It has posted profit for the second year running. Our moulded foam products; Vitavisco Nigeria Limited, has continued to operate profitably, it is growing slowly but steadily. Vitafoam Nigeria Limited, has maintained its profit-making streak, although this was attenuated during the year by the adverse economic conditions in the country.”
He assured the shareholders that Vitafoam will revamp Vono Furniture Products, and Vitagreen Nigeria Limited, while strategic decision would be taken on Vitafoam Sierra Leone Limited, and Vitafoam Ghana Limited, respectively, in view of the negative impacts of foreign exchange on their operations.
He added that shareholder value would always be at the focal point of the company’s consolidation phase.
Commenting on the Rights Issue, the Group Managing Director, Taiwo Adeniyi, informed that Vitafoam will look into the capital injection option, and take the most professional decision on it at the appropriate time.
Adeniyi had earlier reviewed the unfavourable operating environment, and its impacts on the manufacturing sector, saying:
“On the forex issue, unfavourable monetary policy of the Federal Government led to high interest rates, devaluation of the Naira, and hyper inflation, which all combined to increase our production costs.
With the economic recession experienced during the greater part of the last financial year under review, management was mindful of price increases, but as a good corporate citizen, the company could not completely pass the costs to consumers through products’ price increases.”
The shareholders commended the company’s board and management on its long tradition of stability and regularity of dividends despite the tough operating environment.
The co-Founder, Noble Shareholders Association, Gbadebo Adetokunbo, commended Vitafoam’s foresight in diversifying into pre-fabricated buildings, and leather products that could be exported to earn foreign exchange.
He also canvassed for the floating of a Rights Issue to generate revenue internally, in addition to prudent management of the N2.1billion loan from the Bank of Industry (BOI).