Vitafoam could also be on watchlists after an attention-grabbing rally in 2025, buoyed by sturdy income and revenue development.
Vitafoam set a brand new 52-week excessive of N94.60 on December 24, 2025, capping off a stellar yr for the inventory.
Having began 2025 at N23.00, the share worth is now up 311%, rating Vitafoam because the tenth best-performing inventory on the NGX year-to-date.
Over the previous 4 weeks alone, the inventory has gained 13%, putting it twenty eighth in short-term efficiency.
That form of momentum, paired with a pointy earnings rebound and a tripled dividend, is more than likely to maintain traders having the inventory and on analysts’ watchlists.
Vitafoam’s development story in 2025 was powered not simply by top-line enlargement, however by what it didn’t lose – overseas change.
The froth phase continued to dominate income, contributing over 98% of group gross sales, which rose by 35% to N111.4 billion, reflecting regular demand and worth will increase.
Gross revenue grew consistent with income, up 35% to N41 billion, as gross margins remained comparatively steady at 36.77%, up barely from 36.50%.
Whereas this reveals Vitafoam was capable of protect pricing energy regardless of inflationary pressures, it was not sufficient by itself to clarify the corporate’s earnings soar.
The true story unfolds on the working line. With overseas change losses dropping sharply to simply N619 million from N12.7 billion in 2024, the corporate’s value base was considerably lighter.
In consequence, a a lot bigger portion of gross revenue flowed by means of to the working line. Working revenue soared to N27.28 billion, up 258%, and working margin greater than doubled to 24.5% from 9.4%.
This sturdy working efficiency lifted revenue earlier than tax to N27.28 billion, from simply N7.62 billion a yr earlier.
The FX aid not solely shielded earnings from volatility but additionally amplified Vitafoam’s profitability with out the corporate having to drive important value restructuring or margin enlargement in its core enterprise.
It was, in impact, a clear and direct increase to the underside line, which additionally allowed the corporate to extend dividends and enhance money flows.
Backed by this enchancment, the board proposed a N3.00 dividend per share, up from N1.05 final yr.
However as ever, not every thing is clear. The outcomes additionally revealed a buildup in stock, which rose by 40% to N28.73 billion, now making up 44% of whole property.
This contributed to a working capital cycle that lengthened to 118 days (from 86), suggesting slower stock turnover or a strategic stock-up.
Whereas the present ratio improved to 2.23x, exhibiting liquidity energy, the money conversion effectivity will want shut monitoring going ahead.
It means that whereas the corporate was worthwhile on paper, a good portion of that worth is tied up in unsold items, which, if not shortly transformed into gross sales, might strain liquidity within the close to time period.
At a present worth of N94.60, Vitafoam trades at 9x its FY2025 earnings (EPS: N10.80), a seemingly truthful a number of after a 311% rally with earnings per share development of three,624% in 2025 FY.
However what occurs if earnings develop at its extra sustainable 5-year CAGR of 33%?
If the corporate can ship regular, natural earnings development not pushed by FX swings, the present worth nonetheless undervalues its future potential.
By 2026, EPS might climb to round N14.36, primarily based on a practical 33% CAGR. That means room for additional upside.
However to justify and maintain that outlook, Vitafoam should tightly handle stock, enhance working capital effectivity, and proceed navigating macro dangers with self-discipline.
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