Nigeria’s leading book publishing firm, University Press plc, seems not to be tapping into the country’s robust economy as sales dropped by 8.33 percent in the third quarter (Q3) of 2014.
For the first nine months through September 2014, the company’s sales reduced by 8.33 percent to N1.32 billion from N1.44 billion the same period of the corresponding year Q3 2013, while profit fell by 4.18 percent to N261.16 million.
Earnings per share (EPS) reduced by 10.55 percent to 60.21K compared with 58.21K last year.
Some industry analysts interviewed by BusinessDay say economic challenges have hampered the company from tapping into the Nigeria growing population that is below the age of 24 years. This age bracket, analysts say, needs reading and writing materials.
They went further to say that University Press publishing may has suffered a hit due to squeeze in consumer spending, drop in school enrollment in the North, cause by insecurity and the proliferation of electronic books. Also crippling the publishing business is the poor reading culture among the new generation of Nigerians.
“Nigeria produces less than 1 percent of her actual book needs, which should now stand at some 199.76 million books per year,” said, Emmanuel Nnolue Emenanjo, a reknowed linguists, in a recent lecture delivered in one of the Nigerian universities
“This calculation is based on a modest estimate of four – six books per child in primary school, for 20.4 million pupils; eight books per student in the secondary school, for 6.4 million students, and eight books per student for close to 1 million students in tertiary education,” he said.
Based on BusinessDay analysis, the company was slightly cost effective as operating expenses were down by 3.70 percent to N402.42 million from N417.87 million the preceding year.
University Press is incurring more operating expense to generate sales as operating expense margin (OPEX Margin) moved to 19.27 percent in the review period as against 17.43 percent, as of Q3 2013.
Cost of sales margin, which measures the relationship between sales and production costs, remained flattish at 46 percent, while cost of sales increased by 8.15 percent to N659.40 million.
Gross profits were down by 8.30 percent to N717.90 million in Q3 2014, from N782.27 million the preceding year, which means the company’s management of direct costs attributable to projects, has slowed.
Total assets were up by 7 percent to N3.19 billion in the review period as against N2.97 billion the preceding year.
Current ratio, which measures the ability of firm to meet its short-term obligation increased to 2.58x from 2.62x- within the 2.1x industry average.
“Nigerians have the lowest rate of paper consumption in the world with only 3 kilos of printed materials per person, per year as against South Africa, with 100 kilos, Europeans with 250 kilos, Americans with 270 kilos, and Japanese with 300 kilos,” said Emenanjo.
University Press share price closed at N4.01 on the floor of the stock exchange, while market capitalisation was N1.82 billion.
BALA AUGIE
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
