VONO PRODUCTS TO RAISE N840M FROM CAPITAL MARKET
By Michael Eboh
Vono Products Plc said it intends using proceeds from its N840 million recapitalization exercise to strengthen its operations and pursue its expansion programme, even as the company disclosed that it will return to profitability by the end of the current financial year.
To this end, the company announced plans to raise N840 million from the Nigerian capital market through a proposed rights issue of 525 million ordinary shares of N0.50 each at N1.60 per share.
Speaking at the Completion Board Meeting of the company, in respect of the proposed rights issue, Mrs. Titilola Bakare, Managing Director, Vono Products, said the offer was spurred by the need to strengthen and expand its activities and ensure that the company is properly positioned to tap into the opportunities in the Nigeria economy and also ensure improved returns on investment for its shareholders.
According to her, proceeds from the recapitalization exercise will be used to upgrade the factory, buy new plants and machineries and boost its working capital among others.
She said boosting its working capital would eliminate dependence of banks for funding to finance its operations.
Bakare noted that the recapitalization drive becomes necessary to improve the fortune of Vono, ensuring that it reclaims its position in the economy of Nigeria.
Bakare disclosed that the company is faced with the challenges of a depleted working capital which has adversely affected its production capacity and in the effective distribution of its products.
She said, 'The brand is strong, the products are eye-catching and attractive to every one; people want it. What we just need is getting it right, making it available to every one.'
Commenting on its return to profitability, Bakare said the company has been able to reduce its loss considerably and will, hopefully, bounce back to profitability by the end of the 2012 financial year.
She said, 'The turnover figure for the year ended, 2010 is N430 million, for 2011 we ended the year at about N600 million, representing about 62 per cent increase in our turnover, even though we are still maintaining a loss position.
'We are happy to inform our stakeholders that our loss position has reduced considerably from about N300 million to about N100 million in the past one year.
'Vono is already on the way to bouncing back to profitability and we are looking at this year as the turn around year for profit. It is after profit that we will start talking about dividends for our shareholders.'
Bakare expressed optimism that with the passage of the budget and the budgets of the various state governments, that the federal and state government will undertake educational and health programmes, which are expected to impact positively on the company, especially through increased patronage.
She disclosed that its products for the health and educational sector will record significant improvement in the current year, going by the plans of the federal and state governments to increase their support and undertake major health and educational projects.