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New chapter in Opus Group revival sees it exit NZ outdoor business

Wednesday, 26 August 2015
By Patrick Howard

Less than a year out of a major capital restructuring, Opus Group has posted an initial six monthly profit of $4.8 million and paid out 20% of it in dividends.

After surviving a near-death experience in 2014, the group was rescued by Hong Kong-based printing company, 1010 in a deal with the Commonwealth Bank that saw a write off of almost $30 million in debt. Relishing its new relatively debt-free situation the company, under Richard Celarc, executive chairman and Cliff Brigstock, CEO, is back on track.

It posted revenue for the six months to July of $55.5 million, mostly from the publishing division with the outdoor business accounting for $10.5 million.

Cliff Brigstocke CEO

As part of its new focus on core activities it is in the process of closing a deal for Omnigraphics, the New Zealand outdoor signage business. It goes hand in hand with a comprehensive technology investment strategy that will see almost every division get upgrades.

However according to Brigstock, the new investment will not result in extra capacity. “We’re not looking to increase capacity. We have sufficient capacity now. The whole industry has enough capacity,” he said.

Among the items due for upgrading will be a major offset press, possibly for the old McPherson business in Maryborough. It follows an intense installation period for new high-speed colour inkjet that has transformed its digital offering.

Thanks to its new financial situation, Opus Group is now looking at a combination of organic growth as well as mergers and acquisitions to expand. According to Celarc, while the synergy with Hong Kong-based 1010 is already delivering extra services for customers, the company is on the lookout for suitable takeover targets.

Richard Celarc, executive chairman

“The connection with 1010 has given us extra business and allows us to enhance the offering to our customers, with a mix of local and offshore production,” he said. “It is rewarding to see the benefits now flowing from the hard work all of our team have put into our plan. We are now ‘back’ and fully focused on the future. There is much to be done however and we are all focused on what is required to ensure our results can be maintained.

“We have returned, as promised, to a much more hands on approach, which is a proven formula in many ways and how we used to operate before our public listing. Our businesses have a great niche and are leaders in their field and we will continue to support each business to drive value and growth.”

The falling Australian dollar is also helping Opus bring book printing back to Australia from overseas. However Brigstock cautions that the revival , while satisfying, is still a work in progress.

“Our June 2015 half-year result highlights that the financial restructuring has progressed according to plan. Operations wise, it is still a work in progress as we face the challenges of margin erosion and rising costs of material brought about by the depreciation of the Australian dollar which in most cases, were not able to be passed onto customers.

“However, we’re is optimistic of the future prospects of the Group. Each of our businesses has strong underlying fundamentals, which with the Group free of the shackles of a high debt load and having completed an operational restructuring, have started to produce benefits for customers and shareholders.

“We will take advantage of our debt-free status, not only in terms of focus to deliver results, but also to further drive value to our customers. We will increasingly be a Group that delivers high quality services faster, that drives greater efficiency in our processes and will share these benefits with our customers.”

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