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IVE sales reach $694m, profits up by a third

Wednesday, 29 August 2018
By Wayne Robinson

Diversified marketing and print communications group IVE delivered a strong result for the 2017/18 financial year, growing its revenue by 40 per cent, with profits up by a third, and organic growth up by 6.2 per cent.

Following two years of intense investment in acquisitions and equipment the company is looking at 2018/19 to focus on fully realising the value of its investments, with executive chairman Geoff Selig telling Print21 this year will be ‘a clear run’ with no planned acquisitions and reduced capex planned for the year.

For 2017/18 IVE revenue reached $694m, with pro forma EBITDA up by 32.4 per cent to $73.2m, and pro forma net profit after tax also up by 32.4 per cent, to $35.9m.

Its EBITDA was up by 77 per cent to $63.7m from $35.9m, with profit before tax up by 124.5 per cent to $36.9m from $16.4m.

EBITDA margin slipped slightly to 10.5 per cent from 11.1 per cent, as a result of the delayed closure of the AIW site due to contract wins, and the SEMA integration – both one-offs. Also impacting the margin were electricity and gas price increases, some bad debts associated with Kalido Asia, and some short term timing impacts of paper price increases.

Compelling proposition: Geoff Selig

Speaking exclusively to Print21 Geoff Selig said, “It was a very active year for the Group, the first full year with Franklin and AIW on board, and we acquired SEMA in September last year. We have grown our market share, 6.2 per cent organic growth is a strong result. We have a compelling value proposition which the market is responding to.

“In the last 18 months we have invested some $200m across the business to further expand our offering including the new Franklin WEB NSW operation. All four IVE divisions are doing well.”

Selig said the company would continue to look to unlock value from its existing business and is not actively seeking to acquire, although if ‘value acretive’ opportunities arose the company would look closely at them.

The company says all operational milestones were met in the year, which included relocating and merging the Victorian Blue Star Display business with the Franklin Web retail display business, and opening its $53m Franklin NSW site in Huntingwood, next month it will commission its second MAN Lithoman 80pp heatset web offset press there. The Franklin business will handle the company’s catalogue work and long run magazines. Shorter run magazines are printed at Blue Star Web. The company is also about to install another high speed continuous inkjet into its Blue Star Direct business in NSW.

Selig said: “We are pleased to have delivered another strong result, as we acquired and successfully completed the integration of a number of strategically important businesses into the Group, while ensuring throughout there was no disruption to our customers. During the year we achieved revenue growth from the combination of solid organic growth and the acquisitions of Franklin WEB, AIW and SEMA.

The company says the revenue increase of $198.5m or 39.9 per cent over PCP, reflects the impact of Franklin/AIW and SEMA acquisitions, as well as increased revenue through new customer wins and the existing customer base through expanded service offering. The revenue increase has been achieved through realising the successful execution of IVE’s growth strategy initiatives. This has led to a number of new customers partnering with the Group throughout the year, the continued success of cross selling to existing and acquired customers, and the ability to achieve several key contract extensions.

Following a period of significant investment IVE Group expects the positive momentum from FY18 to continue over the coming year, with continued revenue and earnings growth expected in FY19 and minimal restructure costs. The company expects to invest around $9m on capex in the current financial year, excluding previously committed capex.

 

Effective integration: Warwick Hay.

Commenting on the outlook, IVE Group managing director, Warwick Hay said: “Over the past 20 months we have successfully undertaken two significant acquisition and integration projects. Both projects involved major capital investment programs to ensure effective integration and to expand our capacity on the back of revenue growth. These projects are now close to complete and we are extremely pleased with the outcomes. Additionally, we have retained all key customers and grown market share over the period. As a result the business is ideally positioned to continue our growth trajector y and to build further value for our shareholders in FY19.”

Since its IPO in December 2015 IVE has been on a non-stop growth trajectory. Revenue for 2016 was $382m, for 2017 it hit $497m, with 2018 up to $696m. EBITDA has risen form $45m in 2016, to $55.2m last year, and $73.2m this year.

IVE is one of Australia’s most progressive communications businesses, the year also saw the launch of the IVE 360 company wide interactive workplace health and safety platform, it also gained ISO 27001 accreditation, and it expanded its employee benefits programme IVE Plus to incorporate a new Diversity and Inclusion programme.

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