Academy Press profit slumps 65% as one-off gains fade, operating costs rise

ACADEMY Press Plc recorded a sharp decline in earnings for the financial year ended March 31, 2026, with profit after tax falling by nearly 65 percent to N253.31 million, as higher operating costs and the absence of the sizeable one-off gains recorded in the previous year offset lower finance costs.

The company’s audited financial statements show that profit after tax dropped from N716.49 million in 2025, while profit before tax declined by almost 78 percent to N253.45 million, compared with N1.17 billion in the preceding year.

Although revenue remained relatively resilient, falling by just 3.8 percent to N4.41 billion from N4.59 billion, profitability came under pressure as administrative and distribution costs increased while other operating income fell sharply.

Gross profit declined to N1.26 billion from N1.38 billion, reflecting weaker sales performance despite a marginal reduction in the cost of sales.

A closer review of the accounts indicates that the biggest drag on earnings was the steep decline in other operating income, which plunged to N351.99 million from N996.98 million a year earlier. The previous year’s figure was boosted by significant gains, including proceeds from the disposal of assets, which did not recur in 2026.

Operating expenses also rose during the year. Administrative expenses increased by almost nine percent to N882.73 million, while selling and distribution costs climbed nearly 33 percent to N356.88 million, reflecting continued inflationary pressures and rising operating costs.

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Despite these headwinds, the company achieved meaningful savings in financing expenses. Finance costs fell by 37 percent to N93.98 million, largely due to lower borrowing costs and debt repayments during the year. However, the savings were insufficient to offset the weaker operating performance.

The balance sheet reflects a company undergoing significant investment while strengthening its capital structure. Property, plant and equipment rose sharply to N1.50 billion from N891 million, following capital expenditure of almost N794.25 million, suggesting Academy Press is investing heavily in upgrading production capacity and long-term assets.

At the same time, inventories fell by more than 60 percent to N473.77 million, while trade receivables also declined, pointing to improved inventory management and more efficient collections.

These improvements translated into stronger cash generation. Net cash generated from operating activities surged to N757.74 million, more than six times the N121.97 million recorded in the previous financial year, largely driven by better working capital management.

The company used part of the cash generated from operations to finance expansion, reduce debt and reward shareholders. During the year, Academy Press repaid N90.08 million in borrowings, invested nearly N800 million in new fixed assets and paid N113.4 million in dividends.

Despite these investments, cash and cash equivalents declined to N514.01 million from N774.47 million, reflecting the scale of capital expenditure undertaken during the year.

The company’s total liabilities also fell significantly to N2.39 billion from N3.01 billion, while shareholders’ equity improved to N920.76 million, indicating a stronger financial position despite weaker profitability.

The 2026 results suggest Academy Press is navigating a difficult operating environment marked by rising costs and softer earnings, while simultaneously investing for future growth. The sharp fall in profit appears to have been driven less by a collapse in the core business than by the absence of exceptional income recorded in the previous year, combined with persistent inflation-driven operating expenses.

The improved cash flow and increased investment in productive assets could position the company for stronger performance if revenue growth and margins recover in subsequent financial years.