How Olympia Capital makes and spends its money

Good morning 😃🌞☀️! Today let’s talk about Olympia Capital, I had my eye on this company since last year it seemed impressive but my knowledge of value investing wasn’t so developed as it is now but I knew something was special about this company but I didn’t want to invest in it just yet because I didn’t fully understand it but now I’m getting there.

So now I want to share some of the information with you but continue next week. We’re examining Olympia Capital’s revenue streams and spending patterns to reveal important lessons about sustainable business operations.

The Numbers Behind the Success Based on their latest reported earnings (December 31, 2024), Olympia Capital demonstrates an interesting financial structure worth analyzing:

• Total Revenue: BWP 49 million annually • Cost of Sales: BWP 32.23 million • Gross Profit: BWP 16.77 million

• Non-Operating Expenses: BWP 80,750 • Earnings: BWP 3.658 million • Profit Margin: 7.5%

• Free Cash Flow: -BWP 1.791 million Revenue Generation: Where the Money Comes From Olympia Capital has established a BWP 49 million annual revenue stream—an impressive figure that immediately raises questions about their business model and market positioning.

While the specific revenue channels aren’t detailed in our data, this substantial income indicates strong market presence and customer base development.

The company maintains a healthy gross profit of BWP 16.77 million after accounting for direct costs of BWP 32.23 million.

This represents a gross margin of approximately 34%, showing reasonable efficiency in their core operations. Spending Patterns:

Following the Money Trail The company’s expense allocation reveals critical insights into their operational strategy:

1. Cost of Sales (BWP 32.23M): Representing about 66% of revenue, this significant portion covers direct costs associated with delivering their products or services. For entrepreneurs, this highlights the importance of understanding your cost structure before setting prices.

2. Non-Operating Expenses (BWP 80,750): These relatively small expenses (less than 0.2% of revenue) suggest efficient operations with minimal costs outside their core business activities.

3. Additional Expenses (Approximately BWP 13M): These expenses (the difference between gross profit and final earnings) likely include overhead, marketing, staff costs, and other operational expenditures. The Bottom Line With final earnings of BWP 3.658 million and a profit margin of 7.5%, Olympia Capital demonstrates profitability, though not exceptionally high by some industry standards.

This moderate margin could indicate either a competitive market with price pressures or strategic reinvestment in growth.

The negative free cash flow of BWP 1.791 million is particularly noteworthy. This suggests that despite being profitable on paper, the company is investing more cash than it’s generating—potentially indicating expansion efforts, capital expenditures, or working capital challenges.

Key Takeaways for Young Professionals

1. Mind the Margin: A 7.5% profit margin reminds us that revenue size isn’t everything—efficiency matters tremendously.

2. Cash Flow Reality Check: Profits don’t always mean positive cash flow. Understanding this distinction is crucial for sustainable business planning.

3. Cost Structure Awareness: With 66% of revenue going to direct costs, Olympia demonstrates how important controlling your cost of sales is to maintaining profitability.

4. Strategic Investment: The negative free cash flow alongside positive earnings suggests deliberate investment for future growth—a common strategy for forward-thinking companies.

Looking Forward Historical data indicates that Olympia Capital has experienced fluctuations since 2014, with current positioning suggesting continued investment in future growth.

For young entrepreneurs and business students, this case study highlights the balancing act between current profitability and future-focused investments. Remember:

Understanding how established companies manage their finances provides valuable lessons for your own entrepreneurial journey.

Whether you’re launching a startup or climbing the corporate ladder, these insights into revenue generation and expense management offer practical guidance for informed decision-making.