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Better margins boost Salmat’s half-year

Wednesday, 28 February 2018
By Jake Nelson

Letterboxing giant Salmat has posted a 75 percent increase in net profit in its half-yearly results for the second half of 2017. Though revenue was down, the boost in profits was driven by improved margins and reduced costs.

Rebecca Lowde, CEO Salmat

Net profit after tax was $2.1 million, up from $1.2 million in the first half of last year; this is despite a 4.1 percent drop in revenue over the same period. Dividends have also resumed at 1.0 cents per share. Rebecca Lowde, who took the reins at Salmat as CEO in December, told Print21 that the company was making better use of its revenue. “A number of measures have contributed to the results, including margins from new business being better than from existing or discontinued clients, and a very tight focus on cost savings initiatives including a reduction in discretionary spend, facility expenses and bad debt year on year.

“While revenue has dipped in this period, the new business that has been won is higher quality revenue, and we are doing more with that revenue in line with our long term sustainability goals,” said Lowde.

Salmat offloaded a number of its businesses last year, including the MessageNet SMS service in December. Lowde said these sales had allowed Salmat to focus on its core business areas. “The divestments generated $15.3 million and Salmat now has a simpler and more focused Marketing Solutions offering of Search, Email and eCommerce complementing our letterbox distribution and Lasoo businesses.

“Salmat has made great strides in cost management, net operating cash flow, earnings and net profit.  We will continue to invest and innovate as part of our strategy to ensure long term sustainability. Our immediate focus is on driving new business across our Marketing Solutions and Contact Solutions segments,” she said.

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