Computer Ware House Group (CWG) has issued a profit warning that it is expecting an operating loss in its full year 2015 as the company continues to grapple with the tough operating environment.
The company said in a statement released on the NSE website that it suffered from exchange rate loss stoked by the devaluation of the currency by the CBN. Also, huge inventory and bad debts write off has led to lower margins.
“Following technology and business model changes which made some previous investments such as the investments in VSAT and MPLS network obsolete. Recall that CWG was a pioneer and one of the leaders in the provision of VSAT as a service to the banking sector,” said the company.
Basically CWG is blaming its loss on the naira, huge inventory and bad debts.
We don’t recall CWG being a big importer of raw materials, while inventory build up would be due to their not managing supply chain efficiently.
Saying the profit warning is dodgy because “We don’t recall CWG being a big importer of raw materials, while inventory build up would be due to their not managing supply chain efficiently.” is rather more ignorant than I would expect of nairametrics. CWG Plc is a big reseller of large IT equipment that are imported. So of course they will have forex losses. Even people importing shoes are reporting losses due to forex gyration since last year. And from your article, they said that the inventory write-offs were “Following technology and business model changes which made some previous investments such as the investments in VSAT and MPLS network obsolete. Recall that CWG was a pioneer and one of the leaders in the provision of VSAT as a service to the banking sector,” Rather than making snide remarks it may have been better to contact them and seek clarifications – did they exit some businesses?, why did they exit them? Why did the items become obsolete?
I would expect better analysis from nairametrics.