IVE on course for $100m full year EBITDA

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Holistic marketing services group IVE says it is on course to achieve its forecast $100m full year EBITDA, after releasing “solid” half year results.

Very pleased: Geoff Selig, executive chairman, IVE Group

Revenue in the Covid-hit half year to December declined by 3.2 per cent to $340.8m from $355.2m, while EBITDA, including JobKeeper, rose by 18.5 per cent to $59.2m. Net profit after tax rose to $23.8m from $12.4m. Revenue included $53.8m from Letterbox Distribution, which went some way to making up shortfalls in other areas.

IVE has reinstated its dividend to shareholders, paying 7c per share. During the half year it paid off $47m of its net debt, taking it to $90.1m. Debt is now below the target IVE set itself. It has $94.6m cash in hand.

The strength of IVE’s client relationships, flexibility of the cost base, and its capacity to respond to the impacts of Covid-19, were all cited as contributing factors to IVE’s solid financial performance for the period.

Geoff Selig, executive chairman of IVE said, “The impacts of Covid-19 have varied across our business, our clients, supply chain and the sector more broadly. Under the circumstances, the Board is very pleased with the first half performance and the significant reduction of $89m in net debt since the end of March.”

Covid meant IVE took a hit from the retail catalogue and travel sectors in particular, with the decision by Coles in September to stop printing the seven million run letterbox catalogue costing IVE $12m. The company says overall it expects a revenue reduction of “circa $50m to pcp as a result of Covid-19.”

Selig told Print21 that catalogues will continue to be a key part of IVE, and says that while Covid diminished the requirement for retailers due to stock flying off the shelf on one hand and supply chain issues on the other, in the post-Covid world catalogues will remain a key part of the marketing mix.

IVE Group chief executive officer Matt Aitken said, “Our solid first half performance reflects the depth and breadth of our client relationships, the diversity of the value proposition we take to market, and the resilience and commitment of our staff. IVE remains well placed to grow our market share across the numerous sectors we operate in as we emerge from the Covid-19 pandemic“.

During the half year IVE sold off its Telefundraising division, formerly Pareto Phone, for $16.5m, realising a $4.2m profit, which went straight onto the balance sheet. It also launched a new brand – ivolve – which has initially been providing PPE and hygiene products, and which will continue to provide workplace products once Covid has receded.

The half year also saw IVE engage in a significant and ongoing share buyback, so far purchasing 990,000 shares at $1.31 each.

The other notable event was the long term contract signed that sees IVE working with Australian Community Media, which it expects to bring in $100m over the next five years. IVE bought some of the ACM web operation in WA for $2m as part of the deal.

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