The Group Chief Executive Officer of pioneer indigenous ICT firm, Computer Warehouse Group (CWG) Plc., James Agada, has opened up on the profit after tax of N128 million in its 2016 operations, despite the microeconomic challenges it faced ib both Ghana and Nigeria operations within the period under review.
The report according to a statement by the group showed that the company eliminated past losses of N1.8 billion incurred in 2015.
Agada, in the statement said “The company started the 2016 business with microeconomic headwinds that started in Nigeria in 2015, as a result of low price in oil, uncertainty in the foreign exchange market and the recession. We also had presidential elections in Ghana, one of our operating countries, and these headwinds severely affected our technology business in 2016”.
“But despite the challenges, the company was able to generate a profit of N127,675,000.00, compared to the loss of N1,795,846,000.00 in 2015. As we promised at the end of 2015, we continued in the repositioning of our company to exit from businesses that we were unable to generate and protect profit and margins.
“We hence refocused more on service contracts with better margins. We also walked away from businesses where we could not cover the foreign exchange risks. By streaming our businesses, we were able to reduce our administrative costs from N4.41 billion in 2015 to N2.61 billion in 2016, a 41 per cent reduction, which allowed us to make a profit, even though our revenue dropped by 47 per cent, compared to last year.
“Our business mix has also tilted in favour of subscription service contracts, which have better margins and predictability, hence raising our gross margins to 24 per cent from the 16 per cent in 2015,” Agada said.
According to the group chairman, Abiodun Fawunmi, despite the odds, CWG recovered from its loss position of N1.8 billion in 2015, to achieve a profit after tax status of N128 million in 2016.
“Your company therefore exudes an impressive and promising outlook for current and potential investors, considering that some quoted companies recorded a bearish trend, following the economic headwinds in the country last year,” Fawunmi said.
In his response, the founder and Vice Chairman of CWG, Austin Okere, promised shareholders that the company would continue to diversify its business activities in Nigeria, Ghana and Cameroon, in order to declare dividend in next financial year.
In his submission, Okere averred that “the current collaboration between CWG and state governments in Nigeria, in the area of internally generated revenue (IGR) for the states, using modern technology, would further boost the revenue stream of CWG”.
