VITAFOAM NIGERIA PLC Q2/H1 Theme: Strategic Deleveraging and Operational Efficiency The overarching theme for the first half of 2026 is profitability through cost optimization. Despite a moderate revenue growth of 10.9%, the company achieved a massive 43.8% surge in Profit After Tax (PAT). This was primarily driven by a significant reduction in finance costs and aggressive inventory management, which transformed the company’s cash position. Key Numbers (Group - H1 2026 vs H1 2025) • Revenue: ₦62.90 billion (Up 10.9% from ₦56.71 billion). • Gross Profit: ₦22.40 billion (Up 17.6% from ₦19.05 billion). • Operating Profit: ₦15.41 billion (Up 24.7% from ₦12.36 billion). • Finance Costs: ₦0.99 billion (Down 62% from ₦2.61 billion). • Profit After Tax (PAT): ₦9.64 billion (Up 43.8% from ₦6.70 billion). • Earnings Per Share (EPS): 710 kobo (Up from 502 kobo). Valuation Metrics • Annualized EPS: 1,420 kobo (based on H1 performance). • Price-to-Earnings (P/E): 8.3x (at end-of-period price of ₦118.00) or 10.3x (at current price of ₦146.00). • Book Value Per Share: ₦32.01. • Price-to-Book (P/B): 3.69x (at ₦118.00) or 4.56x (at ₦146.00). • Return on Equity (ROE): 48.1% (Annualized), indicating superior capital efficiency. Statement of Financial Position (Group) • Total Assets: ₦66.73 billion, a slight increase from ₦65.28 billion in Sept 2025. • Inventory Reduction: Down to ₦23.20 billion from ₦28.73 billion, signaling effective inventory liquidation and cash conversion. • Cash & Equivalents: Increased by 42.9% to ₦12.89 billion. • Liquidity: Current Ratio of 2.51x (Current Assets of ₦49.86bn / Current Liabilities of ₦19.90bn), showing a very healthy margin of safety. Retained Earnings and Equity Structure • Retained Earnings: Increased to ₦30.99 billion from ₦25.87 billion (Sept 2025), even after a dividend payout of ₦3.75 billion during the period. • Total Equity: Stood at ₦40.04 billion. • Shareholding: The structure remains stable with 1.25 billion issued shares. Substantial shareholders (Olaniyi, Awhua Resources, and Neemtree) control approximately 29.9% of the company. • Free Float: 65.86% (₦97.2 billion in value), well above regulatory requirements. Risks (Headwinds) • FX Volatility: Exchange differences on translating foreign operations resulted in a loss of ₦885.2 million in H1 2026, compared to a loss of ₦258 million in H1 2025. • Administrative Inflation: Admin expenses rose by ₦888 million (17.2% YoY), reflecting the impact of domestic inflation on operations. • Concentration Risk: Over 99.9% of company sales are within Nigeria, leaving it highly sensitive to local macroeconomic shifts. Price Projections and Verdict • 12-Month Target: ₦165.00 – ₦175.00. • Verdict: BUY / ACCUMULATE. • Rationale: The stock is currently trading at a forward P/E of ~10.3x despite a nearly 50% ROE and a massive reduction in interest-bearing debt. The turnaround in operating cash flow (from ₦0.64bn to ₦20.84bn) provides strong support for a higher dividend payout at year-end. • Action: While the price has moved to ₦146, the fundamental strength justifies further upside. Investors should look for entries on any pullbacks toward the ₦135-₦140 range.
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Finally.. dgen1.. Ethereum phone is here
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UNPOPULAR OPINION A younger friend that is into trading called me and asked where I would advise him to purchase land. I asked if he was ready to build. He said no. He wanted it as an investment. I asked him if the funds were from proceeds of trade or profit from the proceeds of trade. He went silent. Land is not a cash flow asset. And sadly in Nigeria, nor is rent when properly disaggregated. You can’t be rich from rental income unless you inherited the asset. Land is capital tied down for the possibility of capital appreciation. You buy land from profit of proceeds of a business. You grow your trading capital first. When you start earning sizable profit from your capital, you reinvest the profit and then you can tie down capital from that profit. This might not apply to salaried workers. Their salary is profit. So for such categories buying land might be some form of savings. In Nigeria, if you have regular income, trust me, you are better off as a tenant. Your landlord subsidizes your cost of living. Strive first for cash flow and then you can lock down capital after sufficiency. Then try not to invest more than 25% of your funds into your business. Seek finance. When you must pay back debt, you get better at understanding profits. Yes financing in Nigeria is killing. Learn numbers first!
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