Though Nigerian economy has shown resilience but the hard times are not yet over with declining crude oil prices. No doubts that the trickle-down effect of this is a major challenge staring at many companies in Nigeria as they operate under tough market environment.
Amid all these, investors still look to increase their returns-on-investments (RoI) for every share they bought at the Nigerian bourse. But more of interest is that long term stock buyers eyes are not too far from value companies whose strategies today are capable of boosting their future earnings with positive impact on returns to shareholders.
One of such companies is Chams plc, a leading indigenous ICT firm in Nigeria which is listed on the Nigeria Stock Exchange (NSE) . The company which was incorporated as a private limited company barely 30 years ago (September 10, 1985) became a public limited company (Plc) in 2007.
The company
Chams plc is Nigeria’s foremost integrated identity solutions provider, reputed for having led many public and private sector identity based projects, some of which include; the Bank Verification Number (BVN) project of the Central Bank of Nigeria; State Residency Projects for Lagos, Osun and Anambra States; Permanent Voters Card production and Smart Card Readers supply to the Independent National Electoral Commission; Front End partner and Concessionaire with the National Identity Management Commission for the New Nigerian Identity management system etc.
The principal activities of Chams plc and its subsidiaries remain provision of identification, transaction and payment solutions. This includes the development, deployment, implementation and maintenance of technology-based systems, computing and solutions platforms, communication infrastructure and other services designed to facilitate the operations of all forms of electronic business.
Financial highlights
The group posted solid financial results across key parameters, as reflected in its audited financial statements for the year ended December 31, 2014. Chams plc recorded robust growth in revenue, up 20 percent from N3.44billion in 2013 to N4.12billion.
The 2014 financial year was a period of business consolidation for Chams plc as the company took positive steps to achieve its set objectives. Its operating profit in 2014 financial year was N392.30million compared with N320.10 million in 2013, representing 22.5 percent increase.
Profit After Tax (PAT) rose strongly by over 48.7 percent from N188million in 2013 to N280million in 2014. Non-current assets grew by 36.7 percent to N2.8billion, compared to N2billion as at full year 2013. Also, as at December 31, 2014, the company’s shareholders’ funds increased by 26.5 percent, from N4.7billion in 2013 to N5.9billion. The company’s basic earnings per share was 7kobo in 2014, same as in 2013. It paid 2kobo dividend per ordinary share of 50kobo held and board hoped to do more in the subsequent years. The company’s ability to deliver growth across major financial indicators further attests to its strong market positioning and industry leadership.
Hedging against risk of further financial loses
Recently, the leading indigenous ICT firm in Nigeria disclosed the shutdown of the Ikeja ChamsCity digital Mall, due to lack of use of its digital citizen registration and mass enrolments infrastructure.
Other business process outsourcing services offered at the digital mall that includes contact centre services, computer based testing, pre-qualification employee tests and staff training are now to be offered by ChamsCity from its new location in Victoria Island, Lagos.
Ola Olasiyan, chief service officer, Chams plc had said that “We lost N9.2billion on ChamsCity, ChamsSwitch and CardCentre operations and have decided to close down loss makers tied to our concession on the national identity project.”
“We have remained resilient, and have taken learnings from the frustration of our concession on the national identity management project. With the success recorded on the ongoing Bank Verification Number (BVN) Project and a good number of other Identity related projects that Chams is working on, we now see a clearer, more-timely and potentially large opportunity to help transform the identity management sector of the economy. Hence our decision to refocus our efforts and investments by streamlining ChamsCity,” said Olasiyan.
Bright future portends improving returns on investments
Femi Williams, group managing director (GMD) designate, Chams plc told INVESTOR earlier this week that, “We are going to be more profitable going forward and we will do more in terms of dividend payout. By this time next year, two of our products will consistently drive our earnings growth. We are still very strong, if not the strongest in the country in terms of identity management. We are capable of executing and delivering more projects.”
Williams further noted: “For us as a company, we believe more in our products –this will continue to drive our profitability lines. I know the industry, business and the people. Everybody in Chams plc (board, management and staff) gave their assurances and commitments to continue in driving this company on the part of profitability.”
He added, “From the board level to the last level of staff; we have a clear idea of what to do every day. For instance, we are about 70 percent cloud now –which implies that about 70 percent of our technology is in the cloud. In two years time, we will not have any server on ground.”
Almost 30 years of relentless innovation…
Chams’ wealth of experience and expertise garnered over almost 30 years of existent from executing major identity projects nationwide and continuous research in identity management, as well as, deep consumer insight, gave rise to the innovative product, ConfirmMe. Chams plc holds the record as the first Nigerian home-grown company to be listed in the Guinness Book of World Records, for setting up the Chams City Mega Digital Facility.
Iheanyi Nwachukwu
