ASX-listed marketing services company Salmat has recorded its first net profit since 2014 after launching a business transformation program to focus on key strengths that include digital and traditional direct mailing.
FY17 revenue was down 3.4 percent to $435.3 million but earnings before tax jumped 16.3 percent to $22.8 million and net profit after tax was $4.3 million - compared to a loss of $6 million the previous year. It’s the company’s first full year profit since FY14.
"The return to full year profit is a significant milestone for Salmat,” said CEO Rebecca Lowde, the former CFO who took over the top job following the departure of former chief Craig Dower in May 2017.
“While revenue was down this year, we have been able to do more with that revenue, growing both earnings and net profit,” Lowde said. “We are also generating more cash from operations. These full year results are a testament to the work we’ve done to transform Salmat’s business operations. Salmat is now more agile, disciplined and collaborative than we were a few years ago.
“We are locking down plans to ensure Salmat has a sustainable future by strengthening our core businesses, laying innovation over these core strengths to maintain market leadership and pursuing new growth opportunities for the benefit of our staff, clients, partners and our shareholders.”
During FY17, the group largely completed its Business Transformation program that launched early in 2015 with an aim to simplify every aspect of the business and focus on key strengths.
By combing the physical and digital assets, Salmat is uniquely positioned to enable its clients to distribute more engaging content,” the company told the ASX.
The Media + Digital division, which includes communications across digital and traditional channels, recorded a 12 percent drop in revenue to $224.3 million, after a fall in catalogue volumes.
The product and services rationalization undertaken during the business transformation mainly affected this segment, with a $9.6 million impact this year. Reduced volumes across the retail client base and pricing pressure in the catalogue market also impacted revenue.
The Contact division – which includes onshore and offshore contact centres and managed services – posted a $15.4 million increase in revenue to $210.3 million.