2023 COMMERCIAL: IVE HEADS TO $1BN REVENUE

Marketing services group IVE, the country’s biggest print operation, is on its way to becoming a billion dollar business, with its full year results all rising, and revenue expected to increase in the current financial year.

Full year revenue for the 2023 year was up 27.5 per cent on the previous year, with EBITDA up by 23 per cent, to $119m from $96.6m, and net profit after tax up by 19.8 per cent, to $39.7m from $33.1m. Underlying EBITDA growth, excluding the Ovato contribution, was 11.8 per cent. 

Geoff Selig, executive chairman of IVE said, "It is important to note that following two years of Covid and all the volatility that brought, IVE's results are significantly up on last year, which were themselves significantly up on the year before. That is very rewarding, especially given the headwinds that we have faced, including the rises in input and electricity costs."

The 2023 year is the first since its acquisition of stricken rival Ovato last September, with Ovato revenue contributing $136m to the $967m total achieved by IVE. It was also the first full year since the acquisitions of Active Display and AFI in November 2021, those businesses contributed $25m between them this year.

IVE is taking three of the manroland heatset webs from Ovato, and replacing three of its older machines, with one press each for Sunshine, Huntingwood and Silverwater. The Ovato integration is tracking ahead of schedule, and will be completed in March. 

Matt Aitken, CEO of IVE said, "Our focus in the coming 12 months will be on driving further organic growth and operational efficiency, and successfully executing the final phase of the Ovato integration."

IVE’s own revenue excluding Ovato and Active/AFI rose by 6.2 per cent or $47.4m, which the company says reflects a further uplift in post-Covid activity, strong new business momentum, especially in the first half, and continued high levels of client retention. The company says its revenue growth was broad-based, with particularly strong growth in Brand Activations (formerly Retail Display) and in 3PL third party logistics and fulfilment.

The Ovato revenue, in common with all the IVE web offset business, generated a lower material gross profit margin than the other divisions, but the company says the Ovato business will generate an uplift in EBITDA and net profit after tax once operating synergies are fully captured on completion of the integration.

IVE’s integration of Ovato ran to $22.2m in 2023 and included $16m of integration costs, $2.7m of acquisition costs, $6.2m asset impairment and loss of disposal, net of a $2.7m refund on purchase. It anticipates another $10m in the current financial year, with $5.5m on restructuring costs and $4.5m on capex.

Capex during the year for the Group was the same $13.9m as the previous year, and will run to the same this year, although with an extra $4.5m for the allocation to the Ovato business.

For the full year to come, IVE expects the Ovato business to contribute around $145m in revenue, EBITDA and $25m and net profit of around $13m, all these figures are less than originally expected, which were $160m, $28m and $15m respectively. All major Ovato customers and retained staff have transitioned to IVE. 

IVE’s ecommerce marketplace Lasoo is growing month by month following its launch in October, although it racked up an after tax loss of $4m on go-to-market costs.

The company will continue to broaden its base by driving growth in its content creation business, and its apparel and uniforms, which it says is $1.2bn market in Australia. It says it is well placed to enter the folding carton market by acquiring a "beachhead" business this year.

Revenue is expected to rise across all segments in the new financial year, except web offset, where a decline of 3-5 per cent is expected, due to its exit from printing in WA, the closure and/or failure of customer businesses, the closure of customer publications, and the impact of repricing Ovato and IVE customers as a result of "meaningful increases" in paper prices.

However Selig told Print21, "The web offset business is strong and significant. The decline is for the reasons we have outlined, we don't lose customers, they are maintaining their committment to print, it delivers results."

A quarter of the company's business comes from white goods retailers, eleven per cent from supermarkets, and ten per cent from the health and beauty business. Financial services is also ten per cent, and publishing 5.7 per cent.