Chemical and Allied Products Plc (CAP) posted a net profit of N2.1 billion for 2022, reflecting a rise of 86 per cent compared to one year earlier, its unaudited financials issued on Friday showed.
Shares in the company had soared 9.8 per cent to N19.6 per unit as of 12:29 WAT on Lagos’ Custom Street on Friday, trading close to the 10 per cent maximum daily gain allowed by the Nigerian bourse, as the news reached investors.
The jump derived from an improvement in revenue, which grew 35.2 per cent to N19.2 billion, almost entirely contributed by the company’s primary income source: the sale of paint products.
But other income slid from N375.3 million to N254.5 million as the paint maker received lower management fees in the year under review and no exchange gain was reported unlike twelve months earlier when it earned N76.1 million from that income category.
Also, finance income fell 7.3 per cent to N167.3 million, taking a blow from less interest income on short-term bank deposits.
On the expenditure side, CAP, a subsidiary of the United African Company of Nigeria (UACN), incurred N11.6 billion in cost of sales, 20 per cent more than a year earlier, while selling & marketing expenses soared almost twofold to N1.9 billion.
Administrative expenses climbed to N3 billion from N2.4 billion chiefly driven by staff costs, excluding directors’ emoluments.
Finance cost, which refers to expenses incurred by the company while borrowing funds, increased 340.7 per cent to N33.6 million.
Profit before taxation stood at N3.1 billion, 79 per cent bigger than the figure for the preceding year, while post-tax profit grew 86 per cent from N1.1 billion to N2.1 billion.
Net profit margin, the metric gauging how much of revenue has turned to profit, was 10.9 per cent. It was 7.9 per cent one year prior.
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CAP Plc started as British multinational Imperial Chemical Industries Plc, which formalised its Nigeria operations in 1957 under ICI Exports Limited later becoming ICI Nigeria Limited in 1968.
It adopted the name “Chemical and Allied Products Plc” in 1991. UACN holds 56.5 per cent of the equity in CAP Plc, according to the latter’s 2021 audited financial report. CAP Plc’s assets totalled N13.8 billion as of the end of last year.
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