Solid EBITDA from IVE as soft market dents half yearlies
Diversified marketing communications group IVE – which includes one of the country's biggest print operations – saw its half year performance metrics slip back from last year, but that didn’t stop it paying out an ‘attractive’ dividend to investors.
Revenue in the six months was down by 4.1 per cent to $360.2m, the Pro Forma EBITDA slipped by 7.8 per cent but still came in at a solid $40.1m, the Pro Forma NPAT fell by 7.3 per cent to $17.6m.
The company declared an interim dividend of 8.6 cents per share, fully franked, which is the same as the corresponding period last year.
Speaking to Print21 on the company’s first half FY20 performance, IVE Group executive chairman Geoff Selig said: “We performed well in what was a subdued six months. We have engaged in a range of well-received initiatives.
"Pleasingly, our margins for gross profit and EBITDA are consistent with the FY19 full year, as is our dividend to shareholders.
“The subdued macro-economic conditions of the first six months play out in various ways, and have had an impact. Supermarkets, though, remain strong.”
Selig said, "The business continues to execute well on our strategy. This includes consolidating the diverse businesses we operate into the one IVE brand, reaffirming the powerful value proposition we take to market.
“Our business remains robust and diversified, though economic conditions were subdued in the first half, which is reflected in these results. Our commitment to creating value for customers and a solid dividend profile for shareholders remains undiminished."
In its outlook IVE group says it expects the full year results to reflect continuing subdued customer activity in some sectors. It says continuing softer macro-economic conditions will impact revenue, particularly in retail sector. The impacts of the Covid-19 virus on its Asian supply chain and broader customer base remain uncertain. Its gross profit margin is expected to remain stable. Key inputs cost of paper and energy have stabilised.
Chief executive officer Matt Aitken said, “We are pleased with our continued new business success, and have over the period renewed a number of key contracts.
“We expect the softness in revenue from the retail sector to continue for the second half. Additionally, expenses such as paper prices and energy while stable, remain elevated.
“With this backdrop we expect to deliver full year Pro Forma EBITDA in the range of $75m-$79m, with gross profit margin expected to remain stable.
“Our focus remains unlocking the value from the strategic investments of the last three years. This opportunity was enhanced further with the recent acquisition of Salmat Marketing Solutions, and Reach Media NZ – these businesses will contribute for the first time in the second half of FY20.”
The company is now under the unified IVE brand, and operating in four main areas; creative services, data driven communications, production (including print) and distribution, and integrated marketing.