The Computer Warehouse Group (CWG) will on November 14, get listed on the Nigerian Stock Exchange (NSE). The technology company will be the first to be listed on the stock exchange, after the launch of the new trading engine, X-Gen.
The listing of the shares is expected to boost the market capitalisation of the NSE with about N14 billion, while CWG would be the highest capitalised security in the Information and Communications Technology (ICT) sector of the exchange.
Technology companies in the US recently listed their shares with Facebook, Google and Linkedln, which resulted in a boom. For instance, Google’s shares have gained a whopping 773 per cent post listing while LinkedIn and Facebook have gained 160 per cent and 29 per cent respectively as at October 4, 2013, following the listing of some technology companies.
Here in Nigeria, CWG said it would replicate such boom with its listing on NSE. With seed capital of about N160,000 in 1992, CWG received a valuation of N6.97 billion in 2009 from Vetiva Capital for her private placement.
The issue was oversubscribed; with Private Equity firm Aureos Capital LLC taking up a major chunk, defying the gloomy atmosphere of the global economic downturn at that time. The valuation resulted in an increase in invested capital of 4,400 times, meaning that an initial investment of $1,000 in 1992 would have yielded a whopping $4.4 million within 20 years.
CWG seems to be on track to repeat this feat on her listing, at a target share price of N5.48, almost doubling her private placement price of N3.40 in 2009 albeit in a difficult environment characterised by significant slowdown in global economic growth, the company said.
The Ministers of Finance, Trade and Investment, and Communications Technology, recently joined hands with the Chief executive of the NSE to canvas more technology listing towards achieving the goal of the NSE to reach a market capitalisation of $1trillion within a decade.
Speaking on the planned listing, CWG’s Founder and Chief Executive Officer, Mr. Austin Okere, said "Our best is yet to come, amid comments from sceptics that all previous technology listings on the stock exchange have lost significant value."
According to him, “The value of the stock is affected by performance and perception of potential. The stock also reacts negatively to swings in revenue, preferring predictability in forecasts."
He added, “CWG has over the years built a large proportion of her turnover into annuities from deploying her own Intellectual Property (IP), to enable financial inclusiveness in mobility, such as the recently announced Yello Diamond Account, which will bring banking services to over 55 million mobile phone subscribers, and the MTN XaaS product, which will provide financial services in the cloud for the over 1000 Microfinance banks and their customers on a pay as you use basis”.
The product rides on cloud computing to bring competitive advantage to relatively smaller banks which would otherwise have been disenfranchised, he said, adding that about 12 of the large banks in Nigeria run on the Finacle Core banking Application, which CWG jointly promotes in West Africa with the application developers, Infosys of India, processing over 60 per cent of all financial transaction in Nigeria and used by the likes of First Bank of Nigeria, UBA, Stanbic IBTC, Fidelity and FCMB among others.
Okere said "CWG has taken advantage of her early mover status in the surge in ICT outsourcing demands to provide the service for the largest telecommunications company and the largest downstream company in the Oil & Gas sector in Nigeria. This further assures annuity income that smoothes revenue swings and brings predictability to income." He explained that about 80 per cent of the company’s revenue was from repeat business, and new customers were more likely to be from referrals.
CWG is a strong player in the Automated Teller Machine (ATM) business, providing and supporting over 30 per cent of the country’s ATM installed base in conjunction with Wincor-Nixdorf of Germany, global leaders in the field.
In addition, the company has set up an academy to train young people to boost her talent pool. Currently, the CWG Academy trains over 200 graduates per year in Nigeria and Ghana, and is set to start in Uganda by mid next year.
In 2009, the Columbia Business School in New York published a case study on CWG and appointed Okere as an Entrepreneur in Residence (EIR), while in 2012, the Legatum Entrepreneurial Center of MIT Boston, published a video and written case study on the Computer Warehouse Group as well.
For the second year in a row, CWG was awarded the Most Outstanding Corporate Social Responsibility (CSR) Technology Company of the year in 2012.