By Kehinde Ibrahim, Lagos
University Press Plc has reported a disappointing financial performance for the year ended March 31, 2026, with profits falling sharply despite recording double-digit revenue growth, highlighting persistent operational weaknesses and mounting cost pressures that continue to erode shareholder value.
The company’s audited financial statements showed that profit before tax declined by 37.15 per cent to N389.52 million, down from N619.74 million recorded in the previous financial year. More concerning was the 52.58 per cent plunge in profit after tax, which fell to N213.67 million from N450.63 million in 2025, indicating that the publisher struggled to convert higher sales into improved earnings.
Although revenue rose by 14.47 per cent to N3.89 billion from N3.40 billion, the increase offered little comfort as it was overshadowed by surging production costs, rising operating expenses and a sharp decline in non-operating income. The figures suggested that while demand for the company’s products remained relatively resilient, its ability to manage costs and sustain profitability deteriorated significantly during the financial year.
Against its fourth-quarter projections, the company narrowly exceeded its forecast pre-tax profit of N388.10 million. However, profit after tax came is well below the projected N256.14 million, reflecting the extent to which escalating costs and weaker income streams weighed on the company’s bottom line.
Despite the sharp fall in earnings, the board has recommended a dividend of 18 kobo per ordinary share, amounting to N77.65 million, subject to shareholders’ approval at the Annual General Meeting. While the proposed payout may be welcomed by investors seeking returns, it is likely to raise questions about whether preserving cash should have taken priority at a time when earnings have weakened considerably and cash reserves are declining.
A closer examination of the financial statements revealed that the company’s profitability came under pressure primarily because costs increased faster than revenue. Cost of sales rose by more than 21 per cent to N1.76 billion from N1.45 billion, significantly outpacing the growth in turnover. As a result, gross profit margin narrowed to 54.74 per cent from 57.53 per cent a year earlier, reflecting weakening operating efficiency.
The cost of books sold remained the company’s largest expense, climbing to N1.45 billion from N1.15 billion, while royalty payments remained substantial at N251.35 million. Marketing and distribution expenses also increased to N775.70 million from N694.73 million, further squeezing margins. Administrative expenses remained high at N1.13 billion, suggesting that the company made little progress in controlling overhead costs despite the challenging operating environment.
Another major setback came from the collapse in other operating income, which plunged to N56.90 million from N404.94 million in the previous year. The decline was largely attributed to significantly lower gains from the disposal of property, plant and equipment, exposing the company’s reliance on one-off income to support earnings in previous years.
Finance income also weakened, dropping to N51.36 million from N78.39 million, providing even less support to overall profitability. Consequently, operating profit declined by 37.53 per cent to N338.16 million from N541.35 million, reinforcing concerns that the company’s core operations are coming under increasing financial strain.
The company’s earnings per share also suffered a dramatic decline, falling by 52.58 per cent to 49.53 kobo from 104.45 kobo, significantly reducing returns to shareholders and reflecting the severity of the earnings contraction.
Revenue analysis showed that the Western zone remained the company’s largest market, contributing N1.76 billion or 45.25 per cent of total sales. The Northern zone posted the strongest growth, with revenue increasing to N1.45 billion from N1.04 billion, while the Eastern zone contributed N683.67 million. By product category, primary school books continued to drive sales growth, generating N2.22 billion compared with N1.55 billion in the previous year. However, sales of secondary school books declined to N1.56 billion from N1.77 billion, signaling weakness in an important segment of the business.
Although total assets increased modestly by 4.98 per cent to N4.73 billion and shareholders’ funds rose to N3.56 billion, the balance sheet improvements did little to mask the deterioration in the company’s financial performance. Cash holdings declined by 6.06 per cent to N949.44 million from N1.01 billion, reflecting growing liquidity pressures.
The cash flow statement showed that net cash used in operating activities improved to N11.60 million from N377.93 million in the previous year. However, increased inventory levels and higher trade receivables continued to absorb cash, raising concerns about the company’s working capital management and its ability to generate stronger operating cash flows.
Overall, the results paint the picture of a company facing increasing operational challenges. Despite growing revenue, University Press failed to protect its margins or deliver stronger returns to shareholders as rising costs and weaker non-core income significantly undermined profitability.
Unless management implements more effective cost-control measures, improves operational efficiency and strengthens earnings from its core publishing business, sustained revenue growth alone may not be enough to reverse the company’s weakening financial trajectory.
