Vitafoam announces 1-for-5 Bonus Issue, N3 dividend ahead of AGM

2026-02-24 08:07:37

Vitafoam Nigeria Plc has announced a 1-for-5 bonus share issue in addition to a proposed N3.00 dividend per share distribution ahead of its 64th Annual General Meeting (AGM) slated for March 5, 2026, in Lagos.

The bonus issue, which has been proposed for shareholder approval, involves the capitalisation of N125.08 million from retained earnings to issue 250,168,812 new ordinary shares of 50 kobo each.

The shares will be allotted to investors whose names appeared on the company’s register as of February 6, 2026, on the basis of one new share for every five existing shares held.

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According to the notice of meeting in the company’s financial statement filed with the Nigerian Exchange (NGX), the new shares will rank pari passu with existing shares in all respects, except that they will not qualify for the dividend declared for the 2025 financial year.

The board described the bonus issue as a strategic move aimed at strengthening the company’s capital structure while providing direct value to shareholders following a year of exceptional financial performance.

What the company is saying

The company is proposing a resolution to increase Vitafoam’s issued share capital from N625.42 million to N750.51 million, representing 1.50 billion ordinary shares of 50 kobo each. This adjustment will require amendments to the company’s Memorandum and Articles of Association and is subject to regulatory approval.

The company noted that the capital raise—achieved through the conversion of retained earnings into share capital—will bolster Vitafoam’s financial capacity as it positions for future expansion across its foam, bedding, and lifestyle product portfolios.

Directors further emphasised that the initiative underscores the company’s long-term commitment to rewarding shareholders after a period of robust operational recovery.

Dividend recommendation and Other AGM Business

Alongside the bonus issue, Vitafoam’s directors are recommending a N3.00 dividend per share, amounting to a total payout of N4.62 billion, an increase of 145%. If approved, payments will be made on March 5, 2026 to shareholders on the register as at February 6, 2026, provided they have completed the e-dividend registration process.

The AGM will also consider routine business such as the presentation of the audited accounts for the financial year ended September 30, 2025, the re-election of directors, appointment of the Audit Committee, and approval of directors’ fees. Shareholders will also vote on the renewal of recurrent related-party transactions and the review of severance compensation for retiring directors in line with Section 297 of the Companies and Allied Matters Act (CAMA) 2020.

Financial Performance:

Vitafoam’s decision to issue a bonus and higher dividend reflects the company’s stellar performance in the 2025 financial year. The foam maker posted a 1,775% surge in profit before tax, rising from N1.15 billion in 2024 to N21.48 billion in 2025. Profit after tax grew by 1,427% to N14.54 billion, which management attributed to revenue expansion, pricing adjustments, and tighter cost controls.

Group revenue increased by 35% to N111.38 billion, while basic earnings per share climbed to N9.43, compared to a loss of 72 kobo in 2024.

Total equity rose 42% to N35.554 billion, and net assets per share increased from N17 to N24. The dividend per share rose 186% to N3.00, reflecting the company’s strengthened earnings base.

Recent stock performance on NGX

Vitafoam’s shares have responded strongly to the company’s improved fundamentals. As at September 30, 2025, the stock closed at N79.80, up 263% from N22 a year earlier.

By December 24, 2025, the share price had risen further to N94.60, representing a 311% year-to-date gain, ranking it the 10th-best performer on the Nigerian Exchange.

Over the past three months alone, the stock traded 99.6 million shares in 10,483 deals, valued at N8.56 billion.

What you should know

Vitafoam Nigeria rose from a sharp decline in profit prior year to a strong pre-tax profit growth on the strength of a recovery in demand for its foam and bedding products, and improved cost efficiency across its operations.

Improved capacity utilisation and stronger demand for mattresses and related products also contributed to the earnings rebound, despite rising energy and raw material costs.

The turnaround from losses to solid profitability at the company level suggests that Vitafoam has stabilised its core operations and strengthened its earnings base.

Vitafoam’s 1,775% increase in pretax profit signals a substantial improvement in business fundamentals and positions the company to sustain dividend payments, strengthen its balance sheet, and pursue growth opportunities.

The 1-for-5 bonus issue, coupled with a higher dividend, underscores the company’s confidence in its growth outlook and its strengthened financial footing.

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