Shareholders of Academy Press Plc will not be paid dividend, as losses continue to pile, raising concerns about the future of a company operating in a sector that has become unprofitable.
The directors of the company attributed the decision not to reward owners to the need to strengthen its working capital position.
Book publishing in Africa’s most populous nation and largest oil producers has been hit by piracy, technological advancement, government negligence and an economic downturn.
For instance, many pirates hinder both the publishers and authors from making profit, a situation that discourages many people from writing for fret of losing money.
Also, experts say internet publishing is gradually fizzling out paper publishing and that it is high time industry players embrace latest technology if they want to remain in business.
The aforementioned challenges took its toll on Academy Press as the company posted a loss after tax of N512.72 million as at year ended 31 March 2017 from a loss position of N67.30 million it recorded the previous year.
The 2017 audited financial statement showed sales increased by 3.43 percent to N2.11 billion in the period under review as against N2.04 billion the previous year.
The Nigerian publishing firm is grappling with rising production costs and suppressed margins.
Cost of sales were up 13.67 percent to N1.73 billion in the period under review as against N1.52 billion as at year ended March 31 2017.
Academy’s cost of sales ratio rose to 82.15 percent in the period under review as against 74.56 percent the previous year. This means the firm has spent more on input cost to generate each unit of products.
The company’s gross profit margins dipped to 18 percent as at year ended March 2017 as against 25 percent the previous year.
Experts say the Nigerian economy doesn’t support publishing business as many publishers are discouraged because profit margins are slim.
While the country existed a recession last year as GDP expanded by 1.40 in the third quarter of 2017, a vast majority of people are unemployed and are ensnared in abject poverty.
The National Bureau of Statistics (NBS) says the country’s unemployment rate rose from 14.2 percent to 18.8 percent in 2017.
Experts say government should encourage private publishers, increase strategies that check privacy and promote digital publishing.
Academy’s share price closed at N0.50 as of Wednesday close of trading, valuing it at N202.50 million.