OVATO: Left Field Print injects $10m into company

Comments Comments

Opus, McPherson’s and Ligare owner, Hong Kong-based Left Field Print Group, has acquired a $4.8m chattel mortgage held over Ovato by Scottish Pacific, and has loaned Ovato a further $5.1m, to assist with its working capital.

Vote of confidence: James Hannan

Ovato CEO, James Hannan said that this support “provides a vote of confidence in the company, from an experienced industry player.”

The Chattel Mortgage Loan will be repaid by Ovato at an interest rate of 8.5 per cent, at $274,000 a month until November next year. The additional, non-revolving, loan of $5.14m also has an 8.5 per cent interest rate, with the loan due to be repaid on 25 November next year.

Left Field Printing Group (LFPG) bought the mortgage, which is secured against machinery and equipment with a book value of $29m, in cash from Scottish Pacific.

The company said the 8.5 per cent interest rate was a better deal than it could get from having the cash sit in a bank account. It has net assets of HK$237m, including cash and bank deposits of HK$188m ($31m).

LFPG saw revenues from its Australian print businesses fall during the first year of Covid, but then go on to recover. Revenue for the six months to 30 June 2021 was up by 41 per cent over the prior corresponding period to HK$193.6m ($33m), with the company attributing much of the growth to the “read for pleasure” market, and the quick turnaround it offered Australian publishers.

Ovato's sales were down to $161m in the six months to January, but net profit after tax was up by 282 per cent to $17.5m, as the slimmed-down company now having sold off virtually everything that is not core printing.

comments powered by Disqus