Chemical and Allied Products (CAP) Plc posted a strong full-year performance in 2025, with profit after tax rising to N6.12 billion, up 61 percent from N3.81 billion in 2024, driven by robust revenue growth, improved operating efficiency and higher finance income.
The paint manufacturer’s revenue expanded by 23 percent to N44.86 billion from N36.36 billion a year earlier, reflecting stronger demand across its decorative and industrial coatings segments as well as improved pricing in an inflationary environment.
Gross profit climbed to N19.43 billion, up from N14.77 billion in 2024, as revenue growth outpaced the rise in cost of sales, which increased to N25.42 billion from N21.60 billion.
This translated into a gross margin of 43.3 percent, compared with 40.6 percent in the prior year, pointing to better cost control and favourable product mix.
Operating profit rose even faster, jumping 48 percent to N8.04 billion from N5.45 billion, despite higher selling, marketing and administrative expenses.
Operating expenses increased to N11.85 billion from N9.75 billion, reflecting inflationary pressures on logistics, personnel and overhead costs. However, the company maintained strong efficiency, lifting its operating margin to 17.9 percent from 15.0 percent in 2024.
Other income remained stable at N460 million, while finance income surged 68 percent to N1.09 billion, largely from interest earned on higher cash balances.
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With minimal finance costs of just N1.45 million, profit before tax rose 51 percent to N9.13 billion.
After accounting for a tax charge of N3.01 billion, net profit settled at N6.12 billion.
The earnings growth was strongly supported by cash flows. Net cash generated from operating activities increased to N7.55 billion from N5.03 billion in 2024, reflecting improved profitability and better working capital management.
Cash generated from operations before working capital changes stood at N9.30 billion, up from N6.66 billion, driven by higher operating profit and non-cash adjustments such as depreciation and employee benefit provisions.
The company’s cash conversion ratio (operating cash flow to profit after tax) stood at approximately 123 percent, indicating high earnings quality and strong liquidity.
As a result, cash and cash equivalents rose 67 percent to N11.74 billion from N7.01 billion.
The company’s statement disclosed that capital expenditure slowed in 2025, with additions to property, plant, and equipment falling to N907 million from N1.86 billion in 2024, suggesting a more cautious investment stance after prior expansion.
Despite this, the company maintained generous shareholder returns, paying dividends of N1.96 billion, up from N1.26 billion a year earlier.
Net cash used in financing activities rose to N3.06 billion, largely due to higher dividend payments and transfers to the unclaimed dividend trust fund.
During the surveyed period, total equity increased to N14.66 billion at the end of 2025 from N10.64 billion at the start of the year, supported by retained earnings growth.
With profit after tax of N6.12 billion against average equity levels, the company delivered an impressive return on equity (ROE) of about 42 percent, underscoring strong profitability and efficient capital use.
Total assets (equity and liabilities) expanded 26 percent to N24.70 billion, reflecting higher cash balances and overall business growth.
Net asset per share rose to 1,800 kobo from 1,305 kobo, while earnings per share jumped 61 percent to 751 kobo.