Chemical and Allied Products Plc (CAP Plc) has posted a profit after tax of N2.53 billion for the six months ended June 30, 2025, up 41 percent from N1.79 billion in the same period last year, driven by strong revenue growth, operational efficiency, and a rebound in core business performance.
The paint manufacturer’s revenue surged 29 percent to N20.09 billion from N15.61 billion a year earlier, reflecting increased product demand and improved market penetration. Paint product sales, which accounted for over 99 percent of total turnover, climbed to N20.05 billion, while service income contributed N46.26 million.
Bolarin Okunowo, the company’s managing director, said, “These results highlight the success of our strategic growth initiatives and disciplined cost management, underpinned by continued investment in retail expansion and operational efficiency.”
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Cost of sales rose 13 percent to N11.37 billion, a slower pace than revenue growth, helping gross profit jump 57 percent to N8.72 billion. The company credited the improvement to a more efficient sourcing strategy and better control of direct costs.
Operating expenses, however, were higher. Selling and marketing expenses rose 40 percent to N2.12 billion, largely from increased marketing campaigns, dealer incentives, and travel costs. Administrative expenses climbed 37 percent to N3.65 billion, driven by higher staff costs, IT-related expenses, and professional fees. Still, the company’s operating profit nearly doubled, rising 95 percent to N3.18 billion.
Finance income dropped 43 percent to N601.21 million from N1.05 billion, as a weaker foreign exchange gain (N84.22 million versus N984.58 million last year) offset stronger interest income on short-term bank deposits, which rose more than sevenfold to N516.99 million. Finance costs fell sharply to N726,000 from N6.26 million, reflecting lower borrowings.
Pre-tax profit rose 41 percent to N3.78 billion, with income tax expenses also increasing 41 percent to N1.25 billion, thereby maintaining the effective tax rate steady. Earnings per share advanced to N311 kobo from N220 kobo in the first half of 2024.
Total assets stood at N20.42 billion as of the end of June, representing a 4 percent increase from December 2024. Non-current assets edged up to N3.74 billion, supported by capital expenditure of N652.91 million, mainly on property, plant, and equipment.
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Current assets rose modestly to N16.68 billion, bolstered by an 8 percent increase in cash and cash equivalents to N7.59 billion despite higher dividend payouts.
Inventories fell 8 percent to N6.14 billion, reflecting faster stock turnover, while trade receivables rose 13 percent to N1.33 billion, in line with stronger sales. Prepayments grew 39 percent to N1.63 billion.
On the liabilities side, total obligations increased slightly to N9.21 billion, with non-current liabilities at N1.24 billion and current liabilities at N7.98 billion. The company maintained a solid equity base, with shareholders’ funds rising 5 percent to N11.21 billion.
CAP Plc recorded a sharp rebound in cash generation, with net cash from operating activities surging to N2.43 billion from just N53.80 million a year earlier, supported by higher profit and better working capital management. Changes in inventory and receivables contributed positively, offsetting a slight increase in prepayments.
Investing activities yielded a net inflow of N16.45 million, as PPE purchases were outweighed by proceeds from asset disposals and interest income. Financing activities, however, saw an outflow of N1.96 billion, mainly due to dividend payments.
Looking ahead, the company’s MD said, “As we look ahead to the second half of the year, we remain committed to sustaining profitable growth and continuously enhancing the customer experience.”