News Column

CWG Diversifies Operations to Boost Profit

September 3, 2014

Goddy Egene

Computer Warehouse Group (CWG) Plc is diversifying its operations to improve its profit in the second half of the year and beyond. The information and communication technology company reported a decline of 47 per cent in profit after tax for the half year ended June 30, 2014. The decline, the company explained, resulted from decline in margins on its information technology (IT) infrastructure business.

The lower margins are in turn caused by increased competitive pressures in the market due to influx of new players in the Nigerian market and the shift in consumer behaviour with the increased availability of cloud service options.

However, explaining its business outlook for the second half of the year, CWG said it is investing in subscription based new lines of business, which would fully address the margin challenge, and the unpredictability of the current revenue streams.

CWG said it is focused on scaling its new subscription businesses in order to see a change in the profitability going forward. The company explained that in order to achieve this, it spent first half of 2014 focusing on the launch of its various cloud based offerings and the development of other subscription based businesses.

CWG said its SMERP product has received increasing interest and different channel partnerships are being developed for rapid deployment of the product.

According to the company, SMERP is an enterprise resource planning solution specifically tailored to address the business operations of SMEs.

It helps to manage the entire operation of the SME business and allows for proper book keeping of their sales, purchase, inventory, accounting and employees records.

"A lot of interest has been shown by banks and other organisations that support SMEs on this solution and recently we partnered with SMEDAN to drive the solution to Small and Medium enterprises in the county starting with SMEs in Abuja for the pilot launch," CWG said.

The company added that its online e-commerce platform (Openshop) that would enable businesses in Nigeria to sell their products online will boost its performance going forward.

"Openshop is an online e-commerce platform that provides an online presence for merchants and store owners to sell their products and increase their market reach. This comes integrated to a secured payment gateway thereby allowing online buyers to pay with their cards. There is a lot of interest for this service from individual merchant, banks and other organisations that support SME business. We have partnered SMEDAN to drive the solution to SMEs in the country starting with SMEs in Abuja," the company added.

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Source: AllAfrica

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