New Horizon Computer (‘New Horizon’ or ‘the Firm’) is an Association of Persons, registered in 1999, and is engaged in providing IT based solutions.

The Firm was founded by Mr. Hanif Akbar Ali and Mr. Farooq Abdullah in 1999, and began with the sale and after-sale service of Laptops, Desktop Computers, Printers and Uninterruptible Power Supply (UPS), by becoming official dealers in Pakistan of manufacturers. Later in 2013, the Firm also began the sale and maintenance of storage servers and their spare parts for corporates, including multinational companies and commercial banks. In 2014, the Firm switched fully to supply and maintenance of servers.

Primary business activity of the Firm is of importers, assemblers, suppliers, of servers and their accessories. Currently, the Firm has ~120 employees, and has presence in Karachi, Lahore and Islamabad. The head office is located in Karachi, on Clifton.

Share of ownership resides between the Mr. Hanif Akbar Ali (51%) and Mr. Rahim Iqbal (49%). Previously, the ownership vested with Mr. Farooq Abdullah and Mr. Hanif Akbar equally. However, the Mr. Farooq retired from the partnership deed in 2011, and was replaced by Mr. Rahim Iqbal.

The firm exhibits stable ownership, with sponsors who hold a reputable position within the technology sector.

Mr. Hanif Akbar Ali, the Chairman and co-founder of the Firm, has more than 23 years of experience in technology-based solutions and system integration. He co-founded the Firm in 1999, and is responsible for building partnerships and synergies with renowned technology manufacturers.

The sponsors possess adequate financial strength and are also involved in the real estate sector through investments in coworking spaces

New Horizon, being a partnership business, does not have a formal Board structure. The oversight function – which is normally the function of the Board – is being exercised by the Sponsors.

Mr. Rahim Iqbal, the CEO, has more than 25 years of experience in technology-based solutions and system integration. He joined New Horizon in 2011, helped expanding the Firm’s clientele

Currently, the Firm does not have any formal committees. Being a partnership concern, the Firm lacks independent oversight and formal preparation of meeting minutes.

The Firm’s external auditors, Ale Imran & Co. have expressed an unqualified opinion on the financial statements of the Firm for the year ended Jun-24. The firm is a  QCR rated but not in SBP’s panel of auditors.

The Firm’s organizational structure reflects clear reporting lines and is split between Sales & Implementation, Finance & Accounts, HR & Admin, Support Services and Supply Chain. Each function is monitored by head of department, who reports to the CEO.

The management comprises experienced and qualified individuals. Mr. Qaiser Sarwar, the COO, has master’s in computer sciences and business administration, having above 21 years of overall experience. He has been associated with the Firm since 2010. Mr. Farooq Barkat is a Chartered Accountant and also holds a master’s in data Analytics. With 13 years of experience in finance, analytics, and corporate governance, he joined the Firm in 2022 and plays a pivotal role in financial strategy and regulatory compliance.

The Firm has no management committees in place. However, policies, procedures and key performance parameters are discussed among senior management regularly to review activity. Whereas, monthly reports are shared with the HoDs regarding the projects’ status.

The Firm has deployed Oracle Fusion as its MIS.

The Firm has a well-established internal audit function, led by Mr. Anique rupani, a CA finalist with significant experience in audit and risk management. The internal audit team conducts regular and structured reviews of the Firm’s operational and financial controls, ensuring compliance, identifying potential risks, and recommending improvements to enhance overall efficiency and governance.

While IT exports have surged by 24% in the fiscal year 2023-2024, reaching a commendable $3.2 billion from the previous year's $2.59 billion, this growth masks underlying vulnerabilities. The sector recorded an impressive $300 million in exports in June 2024 alone, a 33% increase from the previous year. This spike is largely driven by increased demand for Pakistani IT services in the Gulf Cooperation Council (GCC) countries, particularly Saudi Arabia. The State Bank's interventions, such as increasing the retention limit for foreign currency in special accounts from 35% to 50%, and efforts to stabilize the rupee, have undoubtedly played a role in this uptick. Yet, these measures are mere band aids. Over the past five years, IT exports have nearly doubled, yet the growth trajectory has been anything but steady. This inconsistency is a damning indictment of the global political and economic instability, compounded by the erratic and often shortsighted policies of successive Pakistani governments

New Horizon Computer is an emerging enterprise in the information technology sector, demonstrating consistent growth and innovation.

The revenue stream involves IT based solutions, including cloud computing, data protection, backup & recovery, networking hardware & software and implementing ERP systems management. These services are provided through strategic level partnerships with international vendors and manufacturers of hardware and software. The Firm has maintained a positive trend in margins since the last 3 years. Cost of sales majorly comprises of materials and components (servers and spare parts), which are imported. The Firm imports servers and other parts from UAE, China and Thailand, depending on the vendor. During FY24, the Business showed a revenue of PKR 3.3bln (FY23: PKR 2.8bln) showing a growth of 18%.

The Business has exhibited a favorable trajectory in terms of gross and operating profitability in FY24, signaling improved cost controls and operational efficiency. The gross profit margin rose to 35% (FY23: 33%), reflecting better management of input costs and procurement efficiencies. This, in turn, contributed to a notable increase in the operating profit margin, which improved to 20% from 15% in the prior year, underscoring disciplined cost management and scale benefits. However, despite improvements at the gross and operating levels, the net profit margin declined marginally to 12% (FY23: 13%). This decline is primarily attributable to higher finance costs, which diluted the impact of operational gains. The increase in financial charges may suggest rising leverage or higher borrowing costs, which could pose a risk to net profitability if not adequately managed. Overall, the profitability profile remains healthy, with strong gross and operating margins indicating a robust core business model. Nonetheless, the rising finance costs warrant monitoring, as sustained pressure at the bottom line could weigh on future creditworthiness or ratings, particularly if debt levels continue to increase.

The Firm has no major expansion activities planned, rather its main focus is to improve its clientele. For this purpose, the management plans to extend their short-term borrowing lines to supplement their working capital position.

The working capital cycle consists of stock in transit, including servers and their spare parts. Whereas, mostly the receivables are due from commercial banks. Both, the servers and their spare parts are imported from China, UAE and Thailand. During FY24, key working capital efficiency metrics demonstrated positive trends. Average inventory holding period decreased significantly to 31 days from 41 days in FY23, indicating improved inventory management and potentially faster sales. The average time to collect receivables also improved, reducing to 167 days from 180 days, suggesting more effective credit control and collection processes. Consequently, gross working capital days decreased from 220 days in FY23 to 198 days in FY24, reflecting an overall enhancement in the management of the company's operating cycle. While the average time to pay suppliers remained relatively stable at 50 days (FY23: 51 days), the net working capital days saw a notable reduction from 169 days to 148 days, highlighting a greater efficiency in funding operations and a reduced need for short-term financing. These improvements collectively point towards a more optimized working capital cycle in FY24 compared to the previous fiscal year).

New Horizon's debt coverage is intrinsically linked to its free cash flow from operations (FCFO) and finance costs. While the Firm experienced fluctuating profitability historically, FY24 saw an increase in FCFO to PKR 688 million from PKR 646 million in FY23. However, this improvement was partially offset by a rise in finance costs to PKR 274 million in FY24 compared to PKR 247 million in the previous year. Consequently, the Firm's FCFO to finance cost coverage slightly decreased to 2.5x in FY24 from 2.6x in FY23, and total coverage also saw a marginal decline to 2.3x from 2.4x. Furthermore, the debt payback ratio remained constant at 0.1x, indicating a consistent rate of debt repayment relative to FCFO. These trends suggest that while operational cash generation improved, the increased finance costs exerted downward pressure on debt coverage metrics.

As of FY24, the Business exhibited a leveraged capital structure, although the debt-to-equity ratio improved to approximately 50% compared to 60% in FY23, indicating a reduced reliance on debt financing relative to equity. Total borrowings decreased to PKR 1.0 billion during FY24 from PKR 1.3 billion in the prior year, reflecting a strategic reduction in overall debt. Notably, the composition of these borrowings was heavily weighted towards short-term obligations, constituting 95% of the total, which may expose the Firm to refinancing risks and fluctuations in short-term interest rates. This capital structure necessitates careful monitoring of liquidity and interest coverage ratios to ensure financial stability.