CAP Plc: Company Profile
May 8th, 2007 Ogbuotobo Chuks || chuks@stockmarketnigeria.com
By Ogbuotobo Chuks
Chemical and Allied Products (CAP) Plc is a company that is presently having a good run in the stock exchange. The company evolved from the renowned British multinational Imperial Chemical Industries Plc, which formalized its Nigerian operations in 1957 under ICI Exports Limited. In 1962, ICI Paints Limited was also incorporated to manufacture Dulux Paints. In 1965, ICI Exports Limited changed its name to ICI Nigeria Limited.
Due to the indigenization Decrees in 1972 and 1977, ICI Nigeria at first sold 40 per cent and later 60 per cent of its share capital to the Nigerian public and the shareholders changed its name to Chemical and Allied Products Limited. In 1992, ICI Nigeria Limited disposed of its minority 40 per cent shareholding in CAP Plc when it sold 35.7 per cent of the equity to UAC of Nigeria Plc, and the rest to the Nigerian public on the floor of the Nigerian Stock Exchange.
The company which was listed on the NSE in 1978 under the Chemical and Paint sub-sector engages in the business of manufacturing and sales of paints personal products and household products.
Financing Structure
Share capital of CAP Plc was N105.000 million in 2005, as this was the same level in 2006. Its shareholders funds was N796.317 million in 2005, by the end of 2006 accounting period, the contributions of investors to business was N857.065million which translates to eight per cent growth. Total assets of the company grew by 50 per cent to N1.545 billion in 2006 from N1.361 billion in 2005. Current assets rose by 16 per cent in the year under review from N1.147 billion in 2005 to N1.326 billion at the end of 2006 accounting period. From the value of N161.168 million in 2005, it became N172.347 million in 2006. That represents seven percent growth or value addition of N11.179 million. Equity contribution to total assets in 2005 was 59 per cent.
Profitability
Turnover of the company added N460.821 million in 2005. From N1.525 billion in 2005 it came to N1.986 billion in 2006. Cost of sales in 2005 was N914.407 million. It became N1.216 billion in 2006. Gross profit in 2005 was N611.019 million; it came to N769.841 million in 2006. This represented an increase of 26 per cent. Profit before taxation in 2005 was N302.660 million and it increased to N456 million in 2006. Profit after tax added N111.177 million or some 55 per cent to the value of N201.571 million it made in 2005 to rake in N312.748 million in 2006. Return on equity in 2005 was 38 per cent, in 2006 it was improved upon and it became 53 per cent in 2006. From 70 kobo dividend of 2005, the company gave 100kobo in 2006.
Liquidity
The current ratio in 2005 was 2.3:1. This means that the current assets could cover the current liabilities two point three times. It can cover it more than two times. The situation changed slightly in 2006. It fell to 2.2:1. This is still very good as it current assets could conveniently cover its current liabilities more than two times.
The proportion of working capital to sales in 2005 was 43 per cent. This value indicator rose significantly to 60 per cent in 2006. The liquidity ratio in 2005 was 1.6:1 which means the current assets less stock could cover the current liabilities. In 2006, it rose to 1.9:1 which means after deducting stock from the current assets. It still covers its current liabilities 1.9 times.
Management
The board of the company remained in tact in the year Alhaji Mohammed Koguna is the chairman while Mr. Abdul Bello is the managing director. Other members of the board include Mrs. Omolara Elemide, Asiwaju Akintunde Asalu; Mr. Ayorinde Thomas; and Mr. Solomon Aigbavboa.
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