Experts have advocated intervention in the printing sector through the provision of single-digit funds to enable operators to scale up capacity, maintain healthy cash flow and boost profitability.
Managing Director of Academy Press Plc, Olugbenga Ladipo, in a chat with The Guardian at the firm’s 2022 yearly general meeting held in Lagos at the weekend, said the sector is faced with myriads of problems that affect the pace of development of firms under the sector. He noted that access to cheap funds would enable the sector to survive and maintain good cash flow.
Besides, shareholders at the meeting endorsed a total dividend of N75.6 million, culminating in 10 kobo per share and representing a 25 per cent increase over the figure declared in the previous year. The company also issued bonus shares to shareholders earlier in the year.
According to him, firms in the sector require substantial working capital to purchase new equipment, hiring and training, ensure the smooth operation of business activities and boost profitability.
However, he stated that the current economic reality, and the emergence of technology, which has developed the electronic system of learning (e-learning), coupled with foreign exchange (forex) challenges and poor infrastructure have negatively impacted the earnings of companies, under the printing sub-sector.
In addition, he bemoaned government low investment in education, urging government at all levels to intervene in the areas of book supply to schools and invest heavily in education to avoid a total collapse of businesses in the sector and a repeat of what happened in the textile industry.
“The sector is facing readership and patronage challenges since purchasing power is becoming very low, it is affecting the level of patronage in the industry. In the past, you will see both federal and state governments intervening in book supplies to schools but this is not happening again, the ones happening now are on a low scale.
“The total amount expended by the federal government to procure books for schools all over the country currently is not upto 20 per cent of N30 billion spent in the past. Remember what happened to the textile and other industries so that we do not begin to have that kind of situation in the printing industry,” he said.
Earlier, the chairman of the company, Wahab Dabiri, said the company posted revenue of N4.5 billion, representing a nine per cent rise from N4.1 billion achieved in the corresponding period in 2022 while profit before tax also rose by three per cent from N225 million to N232 million.
He said the firm’s diversification agenda especially in the light packaging business is still on course adding that the company is depending largely on bankers for facility support to duly consummate the project.
To this effect, he said the company has secured approval and is currently in the process of accessing the approved fund.
He added that the company has also acquired part of a building that belongs to the subsidiary to facilitate the project.
Dabiri further expressed optimism that the company would consolidate on the performance, sustain its growth trajectory and improve shareholders value through consistent dividend payout.
President of Issuers and Investors Alternative Dispute Resolution Initiative (IIDRI), Moses Igbrude, said the printing sector is challenged by the high cost of papers, inks and now the high cost of diesel.
In addition, he stressed the need for the government and its agencies to increase patronage of locally-made products and remove tariffs on raw materials.
According to him, with the persistent dollar surge, coupled with the devastating effect of the COVID-19 crisis, there is a need for the government to support the industry by imposing tariffs on imported goods and eliminating charges on raw materials to grow indigenous firms.
