IVE rides recovery, shores up paper supply

The post-lockdown print market recovery currently underway has seen the country’s biggest print group, IVE, achieve revenue up by nine per cent in the first four months of the new financial year.

The company says it expects the surge in print demand will continue into next year, saying “Strong revenue momentum continues and we remain optimistic this will continue over the remiander of FY22, driven by post-lockdown economic recovery."

For the four months to 31 October, EBITDA is up by a third, while NPAT is up by three quarters, compared to the same period last year, which the company says is, “demonstrating heightened operating leverage across the business as highlighted in FY21 full year results.”

The $660m marketing services business is also among those benefitting from a move to onshore print that had previously gone overseas, with shipping issues forcing print buyers to come back to Australia for their print.

However those same shipping issues are having what the company describes as a dual effect, as they are also sending paper prices upwards, with IVE executive chairman Geoff Selig saying, “Paper prices have moved to the top end of their long-term historical range, driven by tightening supply, increases in pulp costs and well documented increases in global energy prices and shipping costs. Our expectation is that this price pressure will continue throughout 2022. These price movements primarily impact our web offset printing division.

“In response, we have moved quickly to shore up supply, and believe it is prudent to increase our paper inventory holdings as foreshadowed at the time of our full year results.”

Commenting on the company’s paper supply, and in particular price rises, something all printers are facing, Selig said, “IVE has long term strong relationships with all major international paper suppliers. We are working closely with our clients to manage and mitigate flow-through cost adjustments as required. We are confident that the majority of these recent paper cost increases will be passed through to clients.”

Selig also signalled further acquisitions, following the $6.2m purchase of Active Display Group and AFI Branding – a price which raised more than a few eyebrows in the industry, and which he described as “very low multiple” – with the company looking to the next 12-24 months as the time frame, and Selig saying IVE had allocated the best part of $30m-$40m for new acquisitions.