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Chairman's Report


Distinguished shareholders, Board of Directors, Ladies and Gentlemen, I thank you all for being present today and welcome you to the 41st Annual General Meeting of our company, University Press Plc. It is my pleasure to present to you the Annual Reports and Financial Statements for the financial year that ended 31st March 2019.

Economic and Operating Environment


According to the International Monetary Fund, global expansion has weakened. Global economy is projected to grow at 3.5% in 2019 and 3.6% in 2020 which are 0.2% and 0.1% below October 2018 projections. Foreign exchange reserves grew from $28.57 bn in May 2015 to $42.92 billion by mid-December 2018. This contributed to exchange rate stability and provided a buffer against unanticipated external shocks. Inflation has also declined from a peak of 18.72 percent in January 2017 to 11.28 percent in November 2018.

Nigeria has moved from a deficit to a surplus of N681.27bn in our trade balance as of the third quarter of 2018, representing a significant improvement from the deficit of N290.1bn in 2017. This reflects an increase in non-oil exports and a reduction in the importation of food and items that can be produced locally. Nigeria’s economic freedom score is 57.3% making the economy the 111th freest in the 2019 Index of Economic Freedom. Nigeria has the largest economy in Africa which is highly dependent on oil revenues. The growth in the Nigerian economy has been crawling due to its infrastructure deficit, high interest rates and security challenges such as the Boko Haram menace, conflict between cattle herdsmen and farmers and kidnapping have all taken their toll on the Nigerian economy. A more favourable business environment is likely to entice the startup of new businesses and the expansion of existing ones across different sectors of the economy. This, in turn, will boost the output of these sectors and the economy’s total input.

Publishing Sector


The Publishing sector is embattled with quite a number of challenges. The prevalent Nigerian economy is unconducive for businesses generally as well as this sector.

Nigeria has been rated by the World Culture Score Index as one of the countries with the lowest reading culture. The poor reading culture of the Nigerian citizenry has suffered from widespread poverty, corruption, ineptitude and a dearth of dedicated quiet reading places like libraries.

The Nigerian Copyright Commission says the country has been losing $3bn (N988tn) annually to the activities of pirates. Piracy lies at the heart of the challenge facing the publishing sector. The dawn of information age and the advancement of technology in the reproduction of information and intellectual goods has created a favorable tool for piracy

Financial Performance


In the year in focus, our company recorded a revenue of N2.31bn for the 2018/2019 financial year. A 29% increase compared to last year’s revenue of N1.80bn. However, the profit after tax stood at N109m, a 47% decrease compared to the previous year which was N207.4m. The decrease was due to higher cost of doing business and specific expenses meant to have long term positive impact on the company’s performance. The impact of these have been absorbed in the current year under consideration and their effects are not expected to continue into the future.

Shareholders’ fund stood at N2.61bn as at 31st March 2019.

Dividend


In view of the Company’s performance, the Board is pleased to recommend for your approval a dividend of 15k per 50k ordinary share in respect of the 2018/2019 financial year which is the same as last year. The amount if approved will translate to a cash outlay of N64.7m.

Capital Expenditure


The total capital expenditure was N180m. The amount was invested on field operation vehicles, office and computer equipment for the enhancement of our operations.

Board Retirements/Appointments


In June 2019, I retired from the Board, having served as the Chairman for over 26 years. My resignation took effect from 31st July 2019. Mr. Obafunso Ogunkeye, a non-executive Director was nominated and voted as the Chairman of the Board, effective 1st August 2019.

Mr. Olayinka Lawal was appointed as a non-executive Director. The appointment took effect from 1st August, 2019.

 

Human Capital


Our staff has remained dedicated, the Company has continued to enjoy the loyalty and commitment of our result-oriented members of staff. The Company will continue to improve on her investment in the employees for a better result in subsequent years.

The Future


By allocating over 3 trillion naira ($8.3 billion) toward reducing the Nigerian infrastructural deficit over the past three years—the largest capital spending in Nigeria’s history— the construction of power, road, and rail projects have been jump-started which will be catalytic in connecting people, goods, and opportunities. One example, the Lagos- Kano rail, will help move freight over a more than 1,000-kilometer network of rail from the country’s busiest port in Lagos to the northern city of Kano. Increased infrastructural development is expected to enhance the business environment and reduce cost of doing business in Nigeria.

There is now a focus on creating an enabling business environment for small and medium-sized enterprises to thrive by making Nigeria a progressively easier place to do business, delivering several reforms, as evidenced by the fact that Nigeria moved up 24 places in the World Bank’s Doing Business report over the past three years. In 2019 and beyond, we are confident that by driving agriculture and agro-based industries, technology and innovation, solid minerals, and our vibrant creative sector, Nigeria will harness the energies of our entrepreneurial youth to deliver the promise of our future. Thus, we will in turn have continued increased in our company’s growth, profit and revenue.

 

Appreciation


With a heart filled of gratitude, I am grateful for the opportunity to serve this great company for 26 years along with industrious people who have served together with me over time. In my years of service, I have interacted with great minds who have contributed immensely in the journey of my successful tenure. I commend your team spirit and also implore you to continue with the new Chairman and indeed every member of the Board of Directors in the same vein for the growth of our company. 

 

 

Dr. Lalekan Are