Academy Press’ assets generate higher sales than peers

It is difficult to run a financially healthy company amid a tough and unpredictable macroeconomic environment.

But Academy Press Plc defied all odds as it utilised its assets to generate a higher revenue than peers as revealed in the third quarter (Q3) of 2024 unaudited financial statement of three listed publishing firms.

For every Naira invested in assets, Academy Press Plc generated N1.23 in sales, Learn Africa Plc and University Press Plc generated asset turnover of N0.61 and N0.10, respectively.

The asset turnover ratio is an efficiency ratio that measures a company’s ability to generate sales from its assets by comparing net sales with average total assets.

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The total asset turnover ratio calculates net sales as a percentage of assets to show how many sales are generated from each dollar of company assets.

Industry experts have noted that many printing firms struggle with outdated machinery and high operational costs, limiting their profitability.

The rise of e-books, online education platforms, and self-publishing models has intensified the competition, as younger publishing firms adopt digital-first strategies that appeal to a tech-savvy generation.

According to earlier reports by BusinessDay, Emeke Iwerebon, chairman of the board of directors at Learn Africa, had said the company invested substantially in improving digital platforms knowing the future of education lies in digitalisation.

He recognised the challenges faced by the Nigerian economy in 2023 and the company’s strategy to adapt to strategies in meeting the needs of consumers.

A fuel price hike and incessant devaluation of the currency combined with inflationary pressures have left these publishing houses gasping for breath as the cost of raw materials, especially paper have tripled.

According to the National Bureau of Statistics (NBS), Nigeria spent N367 billion in the third quarter of 2024 on the importation of paper and its allied products.

This represents an 83 percent increase from N200 billion spent in the third quarter of 2023.

Nigeria presently imports corrugated paper, newsprint, bond paper, cartons, Kraft paper, sack paper, liner board and chipboard, among others.

Book publishing, like other sectors of the global economy, has experienced unprecedented challenges in the post-COVID-19 era, which include disrupted supply chains, reduced purchasing power on the part of students and teachers, and increased competition from digital media.

The pandemic has also occasioned a change in business model and marketing strategy leading to the transition from physical to virtual platforms. In addition, the book publishing industry has equally experienced paper shortages, printing delays, and heightened costs of production thus, encroaching on the publishers’ profit margin.

In recent years, there has been a surge of new voices and fresh perspectives in Nigerian literature, and publishing companies have been at the forefront of bringing these voices to the world.

There are several book publishing companies in Nigeria, ranging from small independent publishers to large multinational corporations.

Some of the most prominent ones include Cassava Republic Press, Farafina, Kachifo Limited, Parrésia Publishers, and Quramo Publishing.

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Each of these companies has a unique vision, focus, and approach to publishing, but they all share a commitment to promoting Nigerian and African literature.

The Central Bank of Nigeria (CBN) Purchasing Managers Index report disclosed that printing & related support activities expanded to 51.5 percentage points in December, a 3.3 percent drop from 53.3 percentage points in November 2024.

The PMI index, which measures the performance of business activities, is based on changes in different aspects of respondents’ business activities.

An index above 50.0 points indicates an expansion in business activities while below 50.0 points indicates a contraction in business activities.

Profitability gains fuel net profit margin

With assets now working efficiently, these publishing houses. turned its attention to profitability. Cost reduction strategies renegotiated supplier contracts, and pricing optimisations boosted margins.

This led to a 22 percent and 7 percent increase in the net profit margin of Learn Africa and Academy Press, a crucial metric that measures the amount of net profit a company obtains per dollar of revenue gained.

However, University Press reported a negative profit margin during the period as competition intensified among its peers.

As net profits grew, so did return on equity (ROE), a metric that measures how effectively shareholder funds were being utilised.

University Press, which reported a negative profit margin, saw its ROE rise from 0.08 percent to 0.13 percent, thereby leading the pack.

When a company reports a negative profit margin but a positive ROE this suggests non-operating gains, high financial leverage, or accounting adjustments.

Learn Africa, followed suite with ROE rising from 0.4 percent to 0.8 percent. This meant that for every dollar of shareholder investment, the company was now generating more in profit, making it an attractive investment in the eyes of investors.

On the flip side, University Press saw a decline in its ROE falling to 14 percent from 23 percent.

ROE is often used to compare a company to its competitors and the overall market.

The higher the ROE, the more efficient a company’s management is at generating income and growth from its equity financing while a declining ROE means that the company earns less profit for each dollar of shareholder equity.

Companies that utilise their capital resources efficiently are financially and fundamentally strong and investors should pay attention to them because they tend to outperform the All Share Index.

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For investors, it is paramount to evaluate the capital efficiency of a company before picking their stocks or investing in them.

So far this year, publishing stocks have been active as investor’s appetite grows, pushing University Press and Learn Africa Plc to record high returns.

Between October 2024 and January 2025, Academy Press Plc saw a modest rise from N2.83 in October to N3.00 in January, reflecting steady growth. Learn Africa Plc surged from N3.3 to N4.5, marking a strong investor confidence boost. University Press Plc experienced the most dramatic increase, soaring from N3.38 in October to N5.6 in January, a 65.7 percent rise.

While Academy Press Plc remained stable, Learn Africa Plc and University Press Plc displayed exceptional growth, signaling increased demand for educational materials and publishing sector resilience in Nigeria’s evolving economy and making it an attractive choice for investors.