CAP Plc: Financial results for the fourth quarter and twelve months ended 31 December 2020

CAP Plc’s revenue increased 4.4% to N2.8 billion in Q4 2020, supported by strong volume growth (30.4%) across key product lines.


Chemical and Allied Products Plc (“CAP”), one of Nigeria’s leading paints and decorative companies, announced its unaudited results for the fourth quarter and twelve months ended 31 December 2020.

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 7 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 received preliminary regulatory approvals and an order from the Federal High Court to hold a Court-Ordered Meeting. Merger completion is subject to shareholder approval and final regulatory approvals and we expect to conclude the merger in the first quarter of 2021.”  

Financial Review: Q4 2020

Revenue increased 4.4% to N2.8 billion in Q4 2020, supported by strong volume growth (30.4%) across key product lines.

Gross profit of N1.1 billion was achieved in Q4 2020 from N1.2 billion in Q4 2019, reflecting a 13.2% decline. The decline in gross profit was due to higher input costs on account of supply chain disruptions resulting in a scarcity premium on raw materials which were in short supply.

EBIT was N475 million compared to N640 million in Q4 2019 on account of higher cost of sales. Operating expenses only increased 0.3% YoY while operating expenses/ sales improved 90 bps.

Profit Before Tax of N532 million was achieved in Q4 2020, a 28.1% decline from N739 million on account of the combined effects of the decline in operating profit mentioned above and a 42.6% reduction in net finance income given lower treasury yields compared to prior year.

Financial Review: FY 2020

Revenue increased 3.9% from N8.4 billion in FY 2019 to N8.7 billion in FY 2020, driven by strong volume growth despite the disruptions in April, May and October.

Gross profit declined 5.5% to N3.8 billion, with gross margin of 43.0%. Gross profit declined due to input cost pressures on account of currency devaluation and supply chain disruptions.

 EBIT of N1.6 billion, reflecting a decline of 22.4%, with EBIT margin reducing 638 basis points from 25.2% to 18.9%. Key drivers of the reduction in EBIT are the decline in gross profit and investments in talent to strengthen the work force and drive profitable growth.

The decline in EBIT, coupled with a 41.1% decline in net finance income on account of lower investment income yields resulted in a Profit Before Tax decline of 25.5% to N1.9 billion in FY 2020. Profit Before Tax Margin declined 860 basis points to 21.7%.

Total profit for the year was N1.3 billion, a 26.0% decline from N1.7 billion reported in FY 2019.  Earnings per share for the period of 182 kobo, down 26.1% from 249 kobo in FY 2019.

Free Cash Flow of N1.0 billion in FY 2020, compared to N1.5 billion in FY 2019. Free cash flow impacted by lower operating cash flows which was offset by a reduction in net capital expenditure (-58.4% decline to N113 million in FY 2020). The company continues to maintain a strong cash position (N5.8 billion) which will be deployed towards growth initiatives.

Key Financial Highlights


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