Are decries unfriendly business environment

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The 2016 Annual General Meeting of the University Press Plc was held on Thursday at the Kakanfo Inn and Conference Centre, Ibadan, with the Chairman of the company, Dr. Lekan Are, stating that the firm recorded reduced profit because of the current economic situation in the country.

Dr. Lekan Are
Dr. Lekan Are

In his report to the company’s shareholders, Are said the global landscape in 2015 was defined by different but closely inter-related events, which resulted in subdued growth.

He attributed the main causes of the subdued growth to stronger United States dollar, aided by the hike in the federal fund rate and weak commodity prices.

Speaking on the difficult business year experienced by the publishing industry, Are noted that the depreciation of the naira had negative effect on the industry, stating that there was high increase in the cost of production due to limited access to foreign exchange to purchase printing materials and settle foreign suppliers.

He also explained that low government patronage resulted in the reduced income of UP Plc in the year under review.

Are stated, “The difficulty in accessing foreign exchange by banks made it virtually impossible to settle financial obligations to overseas printers as at when due. Publishers experienced low patronage in the year 2015/2016. There were no bulk purchases from both federal and state governments.

“The decline in revenue and the statutory allocations to states, which became worse at the beginning of 2016, meant that states lacked the purchasing power to buy books. Government’s inability to pay salaries made it difficult for parents to pay school fees much less buy books for their wards.”

While explaining the financial performance of the company, Are stated that because of the challenging economic environment last year, the company recorded further reduction in its operational results for the year ended March 31, 2016.

He said, “The revenue of the company dropped by 15 per cent from N1.728bn in 2014/2015 to N1.473bn in 2015/2016. The net profit also decreased by 46 per cent from N136.4m to N73.3m due to increasing costs of doing business in Nigeria.

“The total assets of the company as of March 2016 stood at N2.4bn, a slight increase of four percent when compared with the N2.3bn in 2015.”

In spite of the challenges, the company’s board of directors recommended N21.6m as total dividend, which translates to earnings of 5k per 50k ordinary share.

The chairman, however, stated that there was a bright future for the company with the Federal Government’s budget of N6.1tn for the 2016 fiscal year, adding that the budget was expected to boost growth and tackle some of the challenges facing the nation’s economy.

The shareholders were unanimous in their opinion that the company’s board and management deserved commendation, expressing their delight in the fact that it did not owe any debt.Dr. Lekan Are


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