PACKAGING BECKONS FOR IVE

As it waits for the ACCC to approve its bid for stricken rival Ovato, diversified marketing services provider IVE saw all its figures rise in its full year results, with the company now poised to enter the packaging market.

IVE revenue for the year was up by 15.6 per cent to $759m, its EBITDA increased by 13.3 per cent to $96.9m, while its net profit after tax rose by 66 per cent to $33.1m (figures excluding JobKeeper). IVE bought Active Display Group and AFI Branding in November.

Matt Aitken, CEO at IVE, said, We were encouraged by the uplift in revenue during FY22, and while the macroeconomic environment remains somewhat uncertain, I am optimistic about the year ahead given our demonstrated track record, business fundamentals, and strong market position.”

IVE said the company, which now has 1800 staff, had seen bounceback across most parts of the business as the economy emerges from Covid.

Following a strategic review IVE will now “move more aggressively” into the packaging sector, and is actively seeking an appropriate acquisition to expedite this strategy, with $30m-$40m allocated to fund this, and any other “earnings accretive opportunities.”

Speaking to Print21 Geoff Selig, executive chair of IVE said, "Our entry into packaging will be fibre-based, and we will build from there. We have plenty of fuel to use."

All IVE’s existing contracts were renewed during the year, its share of wallet growth increased across its 2,800 customers, and there were no material client losses in the year.

Supply chain issues were a factor in the year, with IVE “paying close attention”, and increasing its inventory of raw materials. However there was an upside, with the company seeing an onshoring of work that had previously gone overseas, particularly in the retail display sector.

IVE’s capex for the year was $13.9m, with $3.8m of that on the new Braeside site, and $3.7m invested in upgrading its digital printing fleet. This year’s capex is expected to be about the same.

The company says it is expecting its revenue momentum will continue into 2023, with guidance of a ten per cent rise in EBITDA to $105m and underlying net profit after tax to $36m. The figures exclude any potential impact of the Ovato transaction, and an expected $3.3m loss on the Lasoo roll-out.

Selig said, "Sales increased by 16 per cent but revenue increased by 66 per cent. That shows IVE is managing its cost base particuarly well. Our debt is just $77m and we have $68m in cash. FY22 is a solid and very pleasing result."

IVE is also investing strongly in its Lasoo digital catalogue platform, it spent $4.7m in the year to rebuild and market test the platform, and will invest another $3.3m this year. The site currently has 200,000 active monthly users, with 8.6 per cent of sessions resulting in a buy now click.

Aitken said, “We enter FY23 with a strong balance sheet having already funded a precautionary but material increase in inventories, and having repaid a significant amount of debt over the past two years.

“My thanks to our board and the entire IVE team for their skill and ongoing commitment throughout a year of volatility and uncertainty.”