Chemical and Allied Products (CAP) Plc reported a profit after tax of N1.58 billion for the three months ended March 31, 2026, up 38 percent from N1.15 billion in the corresponding period of 2025, supported by revenue growth and improved cash generation.
According to the paint manufacturer’s interim financial statement for the period ended March 31st, released on Tuesday, revenue increased by 15 percent to N11.59 billion from N10.09 billion, driven by higher sales of paint products.
This translated into a 15 percent rise in gross profit to N5.08 billion, despite a 14 percent increase in cost of sales to N6.51 billion, reflecting higher raw material costs rising by 14 percent, distribution expenses (17 percent), royalty fees (17 percent); and direct overheads (19 percent).
Operating performance improved, with operating profit rising by 40 percent to N2.12 billion from N1.52 billion. This was supported by a modest 1 percent decline in administrative expenses to N1.86 billion, as reductions in staff costs by 7 percent and inventory provisions of 53 percent offset increases in impairment charges of 51 percent and depreciation of 15 percent. Selling and marketing expenses rose by 11 percent to N1.22 billion, largely due to higher marketing and incentive-related costs.
Bolarin Okunowo, managing director of the company, said in the earnings release that “We are pleased to announce our Q1 2026 results, with strong growth achieved across all key metrics, including topline revenue growth as well as growth in profitability.” Most notably, we delivered 40 percent growth in both our operating profit and profit before tax.”
“This strong growth in profitability was powered by the growth in our revenue (15 percent) and the improvements in margins as a result of our disciplined approach to pricing and our sustained focus on tight cost management. As we look ahead, we remain focused on driving long-term growth for the business through sustained operational excellence, product innovation, and continuous investment in our people and brands.
Finance income grew by 41 percent to N372.5 million, reflecting higher yields on short-term deposits, while finance costs increased by 53 percent to N102.2 million due to foreign exchange losses. Net finance income rose by 37 percent to N270.3 million, supporting a 40 percent increase in profit before tax to N2.39 billion.
Earnings per share increased to 194 kobo from 141 kobo.
Cash flow performance improved significantly during the period, with net cash generated from operating activities rising to N1.41 billion from N521.2 million, representing a 170 percent increase. The improvement was driven by higher operating earnings and better working capital management.
Inventory movements contributed N318.5 million to cash, while outflows from receivables moderated compared to the prior period. However, the company recorded a N512.8 million outflow from trade payables, indicating settlement of supplier obligations, and a N617.2 million increase in prepayments, which weighed on cash flows.
Investing activities resulted in a net cash outflow of N54.5 million, compared with an inflow of N212.7 million in the prior period, as capital expenditure nearly doubled to N386 million and the company invested in intangible assets. Interest income provided a partial offset to these outflows. Overall, cash and cash equivalents rose to N12.99 billion, a 69 percent increase from N7.68 billion recorded in the prior year.
On the balance sheet, total assets increased by 8 percent to N26.41 billion, supported by growth in current assets. Cash and cash equivalents rose sharply, while prepayments increased by 54 percent to N1.76 billion and trade receivables grew by 18 percent to N1.39 billion. Inventories declined by 5 percent to N6.38 billion, reflecting improved inventory management. Non-current assets rose by 5 percent to N3.89 billion, driven by additions to property, plant, and equipment and growth in intangible assets.
Total liabilities increased modestly by 4 percent to N10.58 billion. Current tax liabilities rose by 21 percent to N4.66 billion, reflecting higher tax obligations, while trade payables declined by 11 percent to N4.23 billion in line with cash outflows to suppliers. Equity grew by 11 percent to N15.83 billion, supported by a 13 percent increase in retained earnings to N13.93 billion.
The company began the year with a share price of N69.00 and has since gained 71.7 percent on that price valuation, ranking it 34th on the NGX in terms of year-to-date performance.
CAP Plc is currently the 60th most valuable stock on the NGX with a market capitalisation of N96.5 billion,