Despite the negative effect of the COVID19 Pandemic on sales in 2020, Chemicals and Allied Products Plc (CAP), one of Nigeria’s leading paints and coatings companies, increased its revenue for the year ended December 31, 2020, by 3.9 per cent.
According to the company’s audited financial results for the Year Ended 31 December 2020, revenue increased 3.9 per cent from N8.4 billion in FY 2019 to N8.7 billion in FY 2020.
Commenting on the performance, Managing Director, David Wright, said the company recorded modest top-line growth last year despite the COVID-19 lockdown in the second quarter of 2020 and protests in the fourth quarter of 2020, effectively losing 7 weeks of sales.
“We are encouraged by the growth in revenue which has been solely driven by underlying volume growth in line with our strategy. Alongside the rest of the world, we experienced supply chain disruptions that impacted our raw material sourcing and resulted in input costs pressures. We have embarked on initiatives focused on mitigating these disruptions and expect to see positive results in 2021,” he said.
According to the company’s financial results, gross profit declined 5.8 per cent to N3.7 billion, with gross margin of 42.8 per cent.
Consequently, EBIT lower at N1.6 billion, largely on account of the decline in gross profit, investments in talent to strengthen the workforce and fixed operating cost base despite losing seven weeks of sales.
Net finance income also declined 41.3 per cent due to lower investment income yields in line with the interest rate environment.
During the year under review, Profit Before Tax declined by 29.1 per cent on account of the combined effects of lost sales during the lockdown, devaluation, and supply chain disruptions; while total profit for the year was N1.2 billion, a 29.8 per cent decline from N1.7 billion reported in FY 2019.
Speaking on the proposed merger between CAP and Portland Paints and Products Nigeria Plc announced in the fourth quarter of 2020, David Wright said the company had made significant progress and expect to conclude the merger in the second quarter of 2021, subject to receiving final regulatory approvals.
He, however, announced that the Board approved that a dividend of 210 kobo per ordinary share be recommended for payment to our shareholders. “This will be subject to the appropriate withholding tax and the approval of the shareholders at the Annual General Meeting,” he said.
CAP increases revenue by 3.9 per cent in FY2020
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