The proposal was disclosed in a notice filed with the Nigerian Exchange (NGX) ahead of the company’s 64th Annual General Meeting (AGM), scheduled to hold in March 2026 in Lagos. At the meeting, shareholders will be asked to vote on the capital increase, a proposed bonus issue, amendments to the company’s constitutional documents, and other statutory resolutions.
The planned actions signal a significant step by the foam and bedding manufacturer to realign its capital structure in line with its improved financial position, while simultaneously rewarding shareholders for their continued support.
Capital expansion to support growth
Under the proposal, Vitafoam is seeking approval to increase its issued share capital from ₦625.42 million to ₦750.51 million. This will be achieved through the creation of an additional 250.17 million ordinary shares of 50 kobo each, raising the total number of issued shares from about 1.25 billion to approximately 1.50 billion.
According to the notice to shareholders, the new shares will rank pari passu with existing ordinary shares, carrying the same rights in terms of voting, dividends, and distribution of assets. The company explained that the increase is designed to strengthen its equity base and align its capital structure with the scale of its current operations.
The proposed increase will also provide the legal basis for the bonus share issue, which will be executed without raising fresh capital from the market.
Following approval of the capital increase, Vitafoam will seek shareholders’ consent to amend relevant clauses of its Memorandum and Articles of Association to reflect the enlarged issued share capital.
Bonus issue: one for every five shares
In addition to the capital increase, Vitafoam is proposing a bonus issue of one new ordinary share for every five existing shares held. Subject to regulatory approvals, a total of 250.17 million ordinary shares will be allotted to shareholders, matching the number of new shares created under the capital expansion.
The bonus issue will be funded by capitalising ₦125.08 million from the company’s retained earnings. Shareholders whose names appear on the register of members as at February 6, 2026, will be eligible to receive the bonus shares.
The company noted that the bonus shares will be fully paid and will rank pari passu with existing ordinary shares. However, they will not qualify for dividends for the financial year ended September 30, 2025.
Backed by a strong financial turnaround
The proposed capital restructuring comes on the back of a dramatic financial recovery by Vitafoam in the 2025 financial year. After a difficult prior year, the company recorded strong growth across key performance indicators, supported by improved pricing strategies, tighter cost management, and resilient demand for its products.
Profit before tax surged by about 1,775% to ₦21.48 billion for the year ended September 30, 2025, compared with ₦1.15 billion in the previous year. Profit after tax rose by approximately 1,427% to ₦14.54 billion from ₦952 million in FY2024.
Revenue increased by 35% to ₦111.38 billion, reflecting stronger sales of foam and bedding products across its markets. Basic earnings per share improved significantly to ₦9.43, compared with a loss per share of 72 kobo in the previous year.
Riding on this improved performance, the board has also recommended a cash dividend of ₦3.00 per ordinary share, to be paid alongside the proposed 1-for-5 bonus issue, subject to shareholder approval at the AGM.
Together, the capital increase, bonus issue, and dividend proposal underscore Vitafoam’s confidence in its financial position and its intention to consolidate recent gains while delivering value to shareholders.