CWG leads Nigerian Exchange to a rebound with a 9.6% gain: Here is why it matters

Leading ICT company, Computer Warehouse Group (CWG Plc) emerged as the top gainer in yesterday’s trading session in the Nigerian Stock Exchange Market (NGX). The company gained  (+9.6%) in its volume traded for the day.

Other gainers in the market were JAPAULGOLD (+7.7%) and WAPIC (+5.9%), while BETAGLAS (-10.0%), ALEX (-9.7%) and RTBRISCOE (-9.7%) posted as yesterday’s top losers.

This represents significant growth for the company whose stock is currently the 105th most valuable stock on the NGX with a market capitalization of NGN 2.02 billion and makes up about 0.0084% of the Nigerian Stock Exchange equity market.

The new milestone might not be far-fetched from the company’s growth in revenue coupled with the reduction in its liabilities consecutively in the last three fiscal years barring this year.

CWG’s total assets in 2021 were ₦8.4 billion, according to results from the financial report posted on the NGX, which was an increase of 4.5% from the ₦8.1 billion recorded for the year ended 2020. The company’s total liabilities were ₦7.4 billion, down 1.8% from the ₦7.5 billion recorded for 2020.

The company disclosed in its audited June 2022 financial report that the value of its total assets for the second quarter was ₦13.8 billion while its total liabilities for the same period were valued at ₦12.4 billion.

CWG’s continuous rise

Founded in 1992, CWG operates through three divisions: CWL Systems, DCC Networks and Expert Edge Software. The Nigerian tech company is offering integrated ICT solutions to commercial enterprises in sub-Saharan Africa.

The company listed on the Nigerian Stock Exchange (NGX) in 2005 and has risen above so many difficulties in its 30 years of doing business across the shores of Africa and beyond, this is according to the founder, Austin Okere.

In celebrating its 30years anniversary last month, the founder disclosed that the major challenge the business has encountered has been regulatory inconsistencies which include pre-shipment, inspection or destination inspection.

He cited an instance of a CBN policy banning banks from putting ATMs outside the bank branches.

“We had a warehouse full of ATMs that we had shipped with interest running on them,” because banks cancelled the deal with CWG to install ATMs. “That nearly killed the company.”

Austin Okere, Founder of CWG Plc

He noted that the company had some damages as a result of such policies. However, the company was able to survive those periods due to financial discipline and raises which helped it, although the policy was rescinded 18 months later.

A Growing Profitability

CWG has continually maintained a positive growth trajectory since 2019 and has maintained its hold as the largest Information and Communication Technology solutions and service provider in Nigeria.

According to its financial report in 2019, the company made a revenue of N9.56 Billion in the financial year (FY). The figure represented a 23.4% increase from the N7.75 billion gross revenue the company recorded in 2018.

Also, for the first time in two years, the company posted profits after taxes in that same year. According to the report, the company made a profit of N72.7 million in FY 2019. This is a significant turnaround from an N1.5 billion loss after taxes recorded in 2017 and the N1.1 billion loss after taxes posted in 2018.

In its unaudited financial statement for the period ended December 31, 2020, the largest system integration company in Nigeria, also recorded revenue of N11.8 billion and a gross profit of N2.6 billion, representing an increase of 23.4% and 13.9% Year-on-Year (Y/Y) respectively.

In 2021, the company also posted revenue of N9.44 billion in the nine months period in 2021, representing a 5.9% increase compared to N8.92 billion recorded in the corresponding period of 2020. Similarly, revenue in the third quarter grew marginally by 1.3% to N3.48b billion fromN3.43 billion recorded in Q3 2020.

This continuous rise in revenue, as well as assets, has pivoted the company in growth. The revenue growth has also made the company become even more attractive to investors in the NGX market which may be responsible for its latest performance in the market.