Salmat offloads SMS to focus on catalogues

ASX-listed direct mail and marketing services company Salmat has sold off its SMS business MessageNet for $14.8 million to Message4U, trading as MessageMedia. Proceeds from the sale will be used to pay down Salmat’s existing debt facility. Salmat CEO Rebecca Lowde, who was confirmed as the new chief executive one day before the announcement, said the sale aligns with Salmat's current strategic priorities of strengthening and achieving growth in its core business. "Salmat continues to focus on ensuring that it has the right mix of solutions to deliver on its promise to clients, employees and shareholders in a way that is profitable and sustainable. "With catalogue at the core of our Marketing Solutions business, Salmat’s digital focus in this segment in on solutions that help us extend the reach of our clients’ marketing campaigns, to help them reach and convert more customers," she said. Lowde said MessageNet was a great fit for new owner MessageMedia, and continuity would be maintained throughout the sale process. "MessageNet provides SMS-related services such as appointment confirmations, billing reminders and surveys: services that are not core to our Marketing Services proposition. As such, when the opportunity arose to sell MessageNet to a new owner, Salmat agreed to negotiate a sale," she said.

A Salmat spokesperson told Print21 that this sale would help Salmat provide better solutions for customers of its core catalogue business. "Our digital focus in this segment is on solutions that help extend the life of clients’ campaigns - such as Search, Email and eCommerce. The sale ensures Salmat has a much more focused offer for its clients that brings together the power of Catalogue (both print and online via Lasoo) and Digital, to help its clients reach more of their customers through their marketing activities and also convert more sales," the spokesperson said.

In August, Salmat posted its first net profit since 2014 after launching its 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. Founded in 1979, Salmat has evolved from a small letterbox distribution business to an ASX-listed marketing services company that manages billions of customer interactions every year.