Vitafoam Nigeria Plc has announced a 1-for-5 bonus share issue alongside a proposed dividend of N3.00 per share ahead of its 64th Annual General Meeting scheduled for March 5, 2026, in Lagos.

The proposed bonus issue, which will be presented to shareholders for approval, involves the capitalisation of N125.08 million from retained earnings to create 250,168,812 new ordinary shares of 50 kobo each.

The new shares will be allotted to shareholders whose names appear on the company’s register as of February 6, 2025, on the basis of one new share for every five ordinary shares currently held.

According to the notice of meeting, the bonus 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 move as a strategic step aimed at strengthening Vitafoam’s capital structure while delivering additional value to shareholders after a year of exceptional financial performance.

The company is also seeking shareholder approval to increase its issued share capital from N625.42 million to N750.51 million, translating to 1.50 billion ordinary shares of 50 kobo each. This proposal will require amendments to Vitafoam’s Memorandum and Articles of Association and remains subject to regulatory approval.

Vitafoam explained that the increase in share capital, achieved through the conversion of retained earnings into share capital, will enhance its financial capacity as it positions itself for future expansion across its foam, bedding, and lifestyle product segments.

Directors further noted that the bonus issue reflects the company’s long-term commitment to rewarding shareholders following a period of strong operational recovery and improved earnings performance.

In addition to the bonus issue, the board has recommended a dividend of N3.00 per share, amounting to a total payout of N4.62 billion, representing a 145% increase. If approved, the dividend will be paid on March 5, 2026, to shareholders whose names appear on the register as of February 6, 2026, subject to the completion of the e-dividend registration process.

The AGM will also address statutory matters, including the presentation of the audited financial statements for the year ended September 30, 2025, the re-election of directors, the appointment of members of the Audit Committee, and the approval of directors’ remuneration.

Shareholders will also vote on the renewal of recurrent related-party transactions and the review of severance compensation for retiring directors in compliance with Section 297 of the Companies and Allied Matters Act 2020.

The decision to declare a bonus issue and higher dividend follows Vitafoam’s outstanding performance in the 2025 financial year. The company recorded 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, driven by revenue growth, price adjustments, and tighter cost management across operations.

Group revenue increased by 35% to N111.38 billion, while basic earnings per share improved to N9.43 from a loss of 72 kobo recorded in the previous year.

Total equity rose by 42% to N35.55 billion, while net assets per share climbed from N17 to N24, reflecting a stronger balance sheet position.

At the company level, revenue expanded by 33% to N97.40 billion, while profit before tax rose sharply to N17.49 billion, reversing a loss of N1.06 billion recorded in the prior year.

The dividend per share increased by 186% to N3.00, underscoring the company’s strengthened earnings base and improved cash flow position.

Vitafoam’s shares have reacted positively to the improved financial performance. As of September 30, 2025, the stock closed at N79.80, representing a 263% increase from N22 recorded a year earlier.

By December 24, 2025, the share price had advanced further to N94.60, translating to a 311% year-to-date gain and placing Vitafoam among the top ten best-performing stocks on the Nigerian Exchange.

Over the past three months, the company’s shares recorded trading activity of 99.6 million units in 10,483 deals, valued at N8.56 billion.

Vitafoam returned to profitability after recording losses in the previous year, supported by a rebound in demand for foam and bedding products and improved cost efficiency across its operations.

Higher capacity utilisation and stronger sales of mattresses and related products also supported the earnings recovery, despite ongoing pressures from rising energy and raw material costs.

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

The 1,775% growth in profit before tax highlights a significant improvement in the company’s business fundamentals and positions it to sustain dividend payments, strengthen its balance sheet, and pursue new growth opportunities.

The 1-for-5 bonus share issue, combined with a higher dividend, reflects management’s confidence in Vitafoam’s growth outlook and its strengthened financial footing.