University Press Plc: Profit and Cash Flow Forecast for Q4 FY2025

Introduction
University Press Plc has released its profit and cash flow forecast for the fourth quarter ending March 31, 2025. The company projects a profit after tax of ₦375.66 million, highlighting strong operational performance despite challenges in working capital and cash flow management. With revenue anticipated at ₦3.25 billion and strategic cost management, University Press Plc continues to demonstrate its resilience and adaptability in a competitive publishing industry.

Key Financial Highlights for Q4 FY2025

1. Revenue and Profitability:
   • Revenue: ₦3,250,050,000
   • Cost of Sales: ₦1,290,665,000
   • Gross Profit: ₦1,959,385,000
   • Other Operating Income: ₦298,885,000
   • Finance Income: ₦73,194,000
   • Overheads: ₦1,795,481,000
   • Profit Before Tax (PBT): ₦535,983,000
   • Profit After Tax (PAT): ₦375,658,000

The gross profit margin highlights efficient cost management, while the PAT underscores a stable bottom line after accounting for taxation of ₦160.33 million.

Operational Efficiency

1. Other Operating Income:
   • Income from activities such as asset disposals contributes an additional ₦298.89 million, reflecting effective utilization of non-core revenue streams.
2. Cost Management:
   • Tight control over overheads, amounting to ₦1,795.48 million, ensures the company retains profitability.
3. Finance Income:
   • Interest income of ₦73.19 million supports profitability and offsets some operating costs.

Cash Flow Performance

The company forecasts a net decrease in cash and cash equivalents of ₦531.60 million by the end of the quarter, reflecting pressures from working capital changes and significant capital expenditures.

Cash Flows from Operating Activities:

• Profit After Tax: ₦375.66 million
• Adjusted for depreciation, tax, and gains from property disposals, net operating cash is ₦56.14 million.
• Working capital changes, particularly a ₦845.09 million decrease in trade payables and a ₦305.96 million decrease in other payables, lead to a net cash outflow from operating activities of ₦556.76 million.

Cash Flows from Investing Activities:

• Net inflow of ₦35.94 million, supported by property sales of ₦343.20 million and finance income of ₦73.19 million.

Cash Flows from Financing Activities:

• Dividend payments of ₦10.79 million result in a net outflow.

Closing Cash Position

The cash and cash equivalents are projected to decrease from ₦1.16 billion at the beginning of the quarter to ₦631.11 million by the end. While cash flow from operations faces challenges, the company’s ability to generate liquidity through asset sales and prudent financing activities ensures a stable cash position.

Key Insights and Strategies

1. Working Capital Management:
   • The company faces significant reductions in trade and other payables, which impact cash flow. Improved credit terms and inventory turnover will be critical to address this challenge.
2. Focus on Revenue Streams:
   • Maintaining consistent revenue generation of ₦3.25 billion ensures profitability, supported by diversification in operating income.
3. Strategic Investments:
   • Capital expenditures of ₦380.45 million demonstrate the company’s commitment to enhancing operational capacity.
4. Dividend Policy:
   • A modest dividend payment of ₦10.79 million reflects a balanced approach to rewarding shareholders while maintaining financial flexibility.

Outlook

University Press Plc is on track to deliver stable financial performance for Q4 FY2025, supported by strong revenue and efficient cost management. While cash flow pressures exist, the company’s ability to generate income from asset sales and finance activities ensures liquidity. Moving forward, strategic efforts in working capital optimization and revenue diversification will be pivotal in sustaining growth and profitability.