IVE PROFITS UP ON STATIC REVENUE

Marketing services group IVE, which is the country’s biggest print business, saw all its key profit metrics rise in the 2023/24 financial year.

Its EBITDA rose to $127.8m, up by 7.5 per cent from the previous year, while its net profit after tax was up by 8.4 per cent, to $43m.

Revenue was virtually unchanged, up by just 0.3 per cent, or $2.5m, to $969.9m, which the company’s managing director Matt Aitken attributed to “an increasingly difficult economic landscape.”

IVE’s base revenue was down by about four per cent, relative to what it says was a strong prior corresponding year, the drop it says largely due to economic conditions in the second half from January to June. Its commercial printing business in particular was hit, along with its CX and Data business.

IVE’s net debt rose by $6.8m to $131m, reflecting the $28m acquisition cost of JacPak, which was largely offset by a strong increase in operating cash flow.

IVE forecasts its net profit after tax to increase slightly in the current financial year, it says it will be around $45-$50m.

The company says that while diversification through acquisition remains a core strategy it does not currently have anything in its sights.

Aitken said, “The FY24 result was consistent with the targets we set at the beginning the year.

“In addition to completing the Ovato acquisition ahead of schedule and reaffirming the integration synergies, we completed the acquisition of JacPak, which is performing in accordance with expectations.”

Organic revenue growth came in brand activations (display print), third party logistics, and fulfilment. It says magazines and catalogues were in line with expectations.

Retailers make up half of IVE’s customer base at 51.4 per cent, with financial services the next largest sector at 8.7 per cent.

IVE placed deposits of $2.8m on new packaging equipment to go into its commercial printing facility at Sydney, which is being expanded to accommodate a packaging operation mirrored on JacPak in Melbourne. It will include new die-cutting and folder gluing systems. IVE says when fully functioning its packaging operation of the new Sydney facility, combined with JacPak in Melbourne, will generate around $90m in annual revenue.

It says its target of $150m in packaging revenue between the two sites will be achieved within five years, once its phase two additional investment is undertaken. IVE says the value of folding carton packaging in Australia is around $800m, and growing each year.

JacPak, which was acquired in October last year, contributed $28.3m in revenue, which IVE said was broadly in line with its anticipated $45m a year sales.