Vitafoam Nigeria Plc has formally proposed a significant change to its equity structure, seeking approval at its upcoming Annual General Meeting in March 2026 to expand the company’s issued share capital to N750.5 million. The proposal, disclosed in a notice filed with the Nigerian Exchange Limited (NGX), reflects a strategic shift intended to strengthen the company’s capital foundation while positioning it for future operational scaling and shareholder reward mechanisms.
The board’s resolution to increase the share capital rests on creating 250,168,812 new ordinary shares of 50 kobo each, elevating the total outstanding shares from roughly 1.25 billion to about 1.50 billion. These new shares are to rank pari passu with existing ordinary shares, ensuring equal rights and treatment across the expanded equity base.
In the meeting notice, the company clearly states, “That the share capital of the company be and is hereby increased from N625,422,531 to N750,506,438 by creation of 250,168,812 ordinary shares of 50 kobo each,” underscoring the formal nature of the request and its compliance with statutory requirements.
This capital increase is directly linked to a proposed bonus share issue that does not require additional cash from investors. Under the plan, Vitafoam intends to issue one new share for every five existing shares held, translating into the same 250.17 million bonus shares made available through the capital expansion. The bonus shares will be fully paid and will rank pari passu with existing shares, though they will not qualify for dividends relating to the year ended September 30, 2025.
The bonus issue is funded by capitalising N125.08 million from the company’s retained earnings, a move designed to reward long-standing investors while preserving cash reserves. Only shareholders whose names appear on the register by February 6, 2026 will qualify for the bonus allotment.
Alongside this resolution, the board will table proposals to amend the relevant clauses of the company’s Memorandum and Articles of Association to reflect the enlarged share capital once approved. These changes align the legal documentation with the new capital base.
The backdrop to these proposals is Vitafoam’s robust financial performance in the 2025 financial year, which has delivered a strong turnaround after a challenging prior period. The company recorded a steep increase in revenue and profit, with profit before tax surging substantially and revenue rising by about 35 percent, driven by stronger demand and pricing discipline in key product lines.
On the strength of this performance, the board has also recommended a cash dividend of N3.00 per ordinary share in addition to the bonus issue, subject to shareholder approval. This recommendation signals confidence in the company’s earnings sustainability and its commitment to delivering tangible shareholder value.
In sum, Vitafoam’s proposed share capital increase represents a calculated effort to consolidate its equity base, provide shareholder returns through bonus shares and dividends, and align its capital structure with the company’s evolving scale and financial trajectory.
