OVATO SHARES SOAR AS SLIMMED DOWN COMPANY RETURNS TO PROFIT

Shares in heatset giant Ovato raced up by 31 per cent on its half year figures, on sales that were down to $161m, and a net profit after tax up by 282 per cent to $17.5m.

Revenue fell by $75m or 32 per cent, but the majority of this was due to its sold off businesses, with sales revenue down by 11.6 per cent or $19.9m on the same period last year as Covid continued to bite.

Share price in the company rose by 31 per cent to 23c as investors were cheered by the clarity in the business, which has been through a tumultuous decade.

Ovato said continuity of supply, or rather advertisers’ nervousness over it, and some customer losses over the year had contributed to the downturn.

When the impact of discontinued businesses and significant items is removed EBITDA is down by $10.2m, which the company says is due to the end of government subsidies, offset by an improved operating result where the reduction in sales volume was more than offset by cost savings.

Sales in Australia were down by nine per cent or $11.9m excluding discontinued businesses, overall revenue was down by $67.3m with those now sold off businesses included.

Sales in New Zealand were down to $33.9m, shrinking by 19 per cent or $7.5m, although overall revenue was down by a quarter, $11m, as the magazine distribution business has been sold off.