Wellcom profits surge 11 per cent
Australian creative services business Wellcom – which operates on a global basis – saw its net profit from continuing operations zoom upward by 11 per cent in the first half, on sales, excluding print management pass through costs, that were up by 13 per cent.
Wellcom services major retailers, corporations and advertising agencies, with operating centres in Melbourne and Sydney, as well as London, New York, Auckland, Kuala Lumpar and Singapore. It was established by Wayne Sidwell in 2000, who floated it five years later. Sidwell being of the famous family of that name that built up the Show Ads, which became the country's biggest pre-press business, before selling it to PMP, now Ovato, in 1996, for the not inconsiderable sum of $174m.
In the six months to December 2018 Wellcom was earning an average profit after tax of more than $1m a month, $6.6m in total, up from $5.9m in the prior corresponding period. Its net revenue without print management pass through costs was$58.9m, up from $52.1m last time around.
Its Australasia business saw an 11.4 per cent increase in net segment revenue to $31.1m, with the segment result up by 12.4 per cent to $7.27m from $6.47m. Margin increased slightly, by 0.9 per cent to 23.4 per cent. Staff numbers rose by 13.4 per cent to 381.
Revenues increased in each of Wellcom’s operating segments, In the UK net segment revenue was up by a third to $10.73m, while profit more than doubled to $1.4m. In the US revenue was up by 6.2 per cent to $17.1m, but the segment result fell back by a quarter to $2.5m, due to the loss of the JC Penney account, and higher lease costs on its building.
Earnings before interest, tax, depreciation and amortisation for the Group increased 10 per cent, to $11.45m, up from $10.37m pcp, with earnings before interest and tax for the Group also increasing by 10 per cent, to $9.79m compared to $8.91m last time.
Wayne Sidwell, chairman of Wellcom, said, “In the past six months we have on-boarded significant new business, including David Jones inAustralia, Tommy Hilfiger in the US and The Body Shop in the UK. We have also completed the acquisition of Brandsystems (marketing resource management technology), further strengthening the Group’s technology offering."
Looking forward Wellcom says it continues to have a positive outlook for the Group's services, “With a strong pipeline of new business opportunities, and organic growth from existing customers, evident in all key markets.”
Wellcom has just won the global business of Christie’s auction house, with transition from the incumbent service provider expected to occur in the coming months. This relationship will involve Wellcom providing dedicated studio services in a number of markets for Christie’s including London, New York and Hong Kong.
The company achieved some major new business wins in all operating areas including David Jones (Australia), Countdown (NZ), Southeastern Grocers (US), HomeAway -Expedia (UK), and The Body Shop International (UK), each of which made a contribution to the positive results.