CWG 2.0 Business Model begins Yielding Fruit in H2 2015

Mr. Austin Okere, chief executive officer of Computer Warehouse Group (CWG) Plc, has said that the Company’s subscription business has begun to yield fruits.

This statement was made by the CWG boss during his speech at the 10th Annual General Meeting (AGM) held in Lagos on the 25th of June, 2015.

According to Mr. Okere, the CWG subscription business model was conceived five years ago as the Company needed to re-invent and transit herself to become a company that could predictably grow revenue and profit.

From a small startup some 23years ago with seed capital of barely N160,000, CWG has grown to become one of Africa’s largest system integrators with revenues of more than $100m, 650 staff and operations across Nigeria and three other African countries, CWG had always been at the forefront of innovative information technology solutions that enables growth.

Mr. Okere noted that the opportunities that CWG has successfully pursued under her subscription business include providing a cloud solution for micro finance institutions in partnership with MTN (a solution dubbed MTN XaaS), building a cloud based solution for Micro, Small and Medium Enterprises (MSMEs) to manage their businesses, partnering with openshopen.com to build an ecommerce platform for increased visibility and sales.

CWG’s investment in building technology that addresses power theft, which is a major concern of most Power Distribution Companies, has gained significant traction with the first commercial order, and four other proof of concepts completing and progressing into commercial sales.

The Company has also partnered with SES Astra to operate a digital satellite television teleport service.

He noted that being certified by the CBN as a payment terminal service provider (PTSP) will enable the company to deepen her offering in the Point of Sale and Payment systems.

Recognizing the need for automation and effective management of internally generated revenue, CWG has recently launched technology solutions that help State Governments to increase their internally generated revenue in the area of third party Insurance management system.

“Not unexpectedly, this has been a slow and difficult journey into innovative and uncharted territory that is beginning to show green shoots in sales, that will be consolidated in the second half of 2015.

For instance, adapting the FinEdge technology platform to power the backend of the Diamond Yello Account product, has generated platform subscriber base exceeding expectation to 4 million in less than a year after launch, and with potential to grow to 10 million by the end of 2015.

Also, the first order for the power theft detection and prevention system has been secured with one of the electricity distributors opening the way for a foray into a market with estimated potential in excess of $200m within the next two years” Mr. Okere enthused.

He further highlighted that the Company’s SMERP business management platform has been extended to various verticals including medical, retail and manufacturing and is fast winning deals, including one with a major retail chain about to build out more than twenty outlets in Nigeria within the next two years. The CWG-SES teleport infrastructure has also begun re-broadcasting digital television signals for more than 8 broadcasters.

“CWG’s Mobile Financial Services partnership with CIT Vericash is set to power the mobile financial services of one of the largest banks in Nigeria with plans for full scale Africa-wide deployment in the coming months. Most significantly, CWG and her consortium partners have started their first phase of the deployment of a unique third party insurance management system for one of the largest states in Nigeria. This system is projected to help the state generate significant revenue while ensuring that the public gets benefit for their mandatory third party insurance on their vehicles” Mr. Okere continued

“While not yet Africa’s number one Technology Platform Provider, the increasing pace of roll out of platform solutions and growth in subscriber numbers are clear pointers of reaching that ambitious goal sooner than later” he concluded.

Addressing the participants, Mr. Abiodun Fawunmi, company’s acting chairman, remarked that “CWG Plc made significant progress in her key business objective for 2014 which was to Scale out the Subscription business in order to be the Number one Technology Platform provider in Africa by 2015, a business model that would provide predictability, as well as ensure annuity revenues”

The Company re-iterated her commitment to continue her focus in developing new lines of businesses, under the CWG2.0 model, which are better positioned to withstand macroeconomic shocks, especially those relating to foreign exchange movements.

The new products include the flagship CWG-SMERP, the cloud based Enterprise Resource Planning (ERP) product for SMEs, the award-winning Openshopen.ng, her ecommerce technology platform and CWG-SES Teleport Services. Being Intellectual Property locally developed, implemented and supported by CWG, the business growth and profitability are immune from the shocks of foreign exchange fluctuation.

On the Company’s financial scorecard, the Acting Chairman noted that her gross margin percentage grew by 5% to 20% (2013: 19%) while the financing costs and general operating costs declined by 43% and 15% respectively to N199.8m and N2.7bn (2013: Financing cost N348.7m, OPEX N3.2bn) showing better efficiency of our operations. The Company also finished with an improved cash position of over N1.5bn at the year end. Shareholders at the event were informed of the payment of the 2kobo dividends per unit share, to be made within 24 hours.

The event also witnessed the election of Mr. Kunle Ayodeji as an Executive member of the Board in charge of Finance and Operations. Mr. Ayodeji is a seasoned professional with over 15 years of experience in the fields of banking, financial consulting and private equity.

He has held Executive positions in numerous organizations including KPMG and Abraaj Capital. In the same vein, three other shareholders were also elected as members of the audit committee, while Ernst and Young was reappointed the company’s auditor for another year.

The AGM was well attended by the esteemed shareholders, the media, the Company’s Acting Chairman, Mr. Abiodun Fawunmi;  Executive Directors: Chief Executive Officer, Mr. Austin Okere; Chief Operating Officer, Mr. Phillip Obioha; Chief Technology Officer, Mr. James Agada; Executive Director, Finance and Operations, Mr. Kunle Ayodeji; Non-Executive Director, Mr. Emmanuel Ijewere; Company Secretary, Barrister Okey Ejibe, and other stakeholders.