Computer Warehouse Group Plc. (CWG), a leading pan African ICT Company, this week released its unaudited H1 2015 financial results for the period ended June 30, 2015 to the Nigerian Stock Exchange.
The Company’s revenue at N8.6b compares favorably with H1 2014 (N8.4b). However, business margins were squeezed from 20 percent in 2014 to 14 percent in 2015, as the Company was unable to fully pass increased costs to her customers.
There was 7 percent increase in Operating expenses to N1.4b (2014: N1.3b) over 2014, due largely to one-off restructuring expenses taken by the Company
The results with a PBT loss of N350m reflect the continued difficulty of the Nigerian business environment in 2015.
With a significant segment of the company’s business dependent on international procurement, the difficulties of foreign exchange sourcing had a negative impact on the results.
In particular, the H1 result was affected by the recognition of foreign exchange losses of N277m and the write-off of N103m, arising from the cancellation of a transaction duly recognised in Q4 2014. However, the Company finished with a strong cash position of N1.3b at the end of the quarter.
According to Kunle Ayodeji, the Executive Director, Finance and Operations, CWG Plc said the business environment remains very challenging, with many organizations holding back on new capital expenditure and investments, as the economic direction of the new government is being observed.
Ayodeji also noted that the Company is making a shift towards recurrent and subscription businesses which are more predictable, have increased margins and are less dependent on macroeconomic challenges, especially those arising from foreign exchange.
Recall that the Founder and Chief Executive Officer of Computer Warehouse Group, Austin Okere in a recent publication highlighted the yields from the Company’s subscription business model which started in the second half of 2015 and the products being better positioned to withstand macroeconomic shocks.
The products under the new business model include the CWG-SMERP, the cloud based Enterprise Resource Planning (ERP) product for SMEs, the award-winning Openshopen.ng which is an eCommerce technology platform, CWG-SES Teleport Services providing digital satellite broadcast, cloud solution for micro finance institutions in partnership with MTN (dubbed MTN XaaS), CWG’s Mobile Financial Services in partnership with CIT Vericash, Finedge Solution, which has powered Diamond Yello Account (DYA), electricity theft detection & prevention systems, and CWG’s IGR Solution for States amongst others.
While reviewing the H1 financial report,.Okere reiterated that the Company’s future looks promising as the products under her subscription business model are well positioned to soar above macroeconomic shocks, especially foreign exchange fluctuations that affect businesses generally.