CAP defies covid-19 pandemic, records 3.5% growth in revenue to N8.7bn

 CAP P defies covid-19 pandemic, records 3.5% growth in revenue to N8.7bn

Despite the coronavirus, COVID-19 pandemic, Chemical and Allied Products, CAP Plc, has recorded revenue of N8.7 billion in its audited results for the year ended December 31, 2020, representing a growth of 3.9 per cent from N8.4 billion in the corresponding period of 2019.

This is driven by strong volume growth despite the disruptions in April, May and October, according to a report from the Company.

The Company, according to the results released by the Nigerian Stock Exchange, NSE recorded a gross profit decline of 5.8 per cent to N3.7 billion with margin of 42.8 per cent. Gross profit declined due to input cost pressures on account of currency devaluation and supply chain disruptions.

The Earning Before Interest and Tax, EBIT, according to the Company  lower at N1.6 billion, largely on account of the decline in gross profit, investments in talent to strengthen the work force and fixed operating cost base despite losing 7 weeks of sales.

Net finance income declined 41.3 per cent due to lower investment income yields in line with the interest rate environment.

Other performance indicators showed that Profit Before Tax declined by 29.1  per cent  in 2020 on account of the combined effects of lost sales during lockdown, devaluation, and supply chain disruptions.

Total profit for the year was N1.2 billion, a 29.8 per cent decline from N1.7 billion reported in 2019.Earnings per share of 175 kobo, down 29.7 per cent from 249 kobo in 2019. Total dividend of 210 kobo per share was declared for the year under review.

Free cash flow remained very strong at N1.2 billion signifying the continued strong cash generating ability of the company in spite of significant headwinds.

Commenting on the performance, Managing Director, David Wright, stated: “CAP 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 seven 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 which 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.

We announced the proposed merger between CAP and Portland Paints and Products Nigeria Plc in the fourth quarter of 2020. We have made significant progress and expect to conclude the merger in the second quarter of 2021, subject to receiving final regulatory approvals.”