Ovato cuts losses as Covid continues to bite

Heatset print operation Ovato managed to claw back a chunk of its losses in the second quarter, with its net cash loss of $4.3m a significantly better result than the $23.2m loss in the corresponding period the previous year.

However the company warned it was suffering supply chain issues, and said that continuity of supply is likely to affect to future advertising decisions by its customers. On the bright side all renewals due in the quarter were signed.

The company says its focus on driving cost efficiencies from its core printing activity, allied with the sale of its marketing services and its retail distribution business (the former Gordon & Gotch), and the closure of its residential distribution business, resulted in the “positive impact” on its cashflow.

Ovato continues to be adversely impacted, financially and operationally, by the ongoing Covid-19 restrictions in Australia and New Zealand, which it says is having a “significant effect” on retail activity and supply chain management.

It said delivery timelines for both paper and ink had been disrupted, and both had incurred “significant price increases”.

Cash and cash equivalents at the end of the quarter were $9.3m, enough for 2.1 quarters of trading.