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Thriving IVE boosts profit and buys SEMA

Wednesday, 30 August 2017
By Print 21 Online Article

IVE Group hiked its pre-tax earnings by 23 percent to $55 million in FY17 and has launched a $55.6 million capital raising to fund the acquisition of data & communications business SEMA and the purchase of another 80-page LFWO press at its Franklin Web site in Sydney.

‘A very strong year’: Geoff Selig, chairman IVE Group.

“From our perspective, it’s a very strong result for the full year,” chairman Geoff Selig told investors in an international conference call results briefing.

IVE’s revenue was up by 30.1 percent to $496.9 million, with earnings before interest, tax, depreciation and amortization (EBITDA) up 23 percent on the previous year to $55.2 million. FY18 EBITDA is forecast to rise to $70-$75 million.

Selig said an increase in revenue of $114.8 million reflected the impact of the group’s Franklin WEB and AIW Printing acquisitions, as well as increased revenue from new customer wins.

Since acquiring Franklin and AIW, IVE has secured $70 million in annual contracted revenue, with significant new contracts from Coles, Pacific Magazines, and the extension and expansion of the NARTA contract.

IVE announced a capital raising of $55.6 million at $2.05 per share to fund its acquisition of the SEMA business and to buy a second 80-page large format web offset (LFWO) press at its new Franklin WEB plant at Huntingwood in western Sydney.

“We’ve launched a $55.6 million capital raise and there’s three components, the first being $19.6 million to fund the acquisition of the SEMA business, which is a business that operates in the data-driven, personalized communications space and has been around for 35 years,” Selig told investors. 

“They’re a business that has annualized revenues of $40.1 million and they operate out of Brisbane, Sydney and Melbourne, so part of the plan will be to integrate their operation in Sydney and in Melbourne with our existing Blue Star Direct businesses. We will leave their Brisbane operations as a standalone business but will rebrand that as Blue Star Direct.”

Selig said the deal would take IVE’s annualized revenues in the data-driven communications market to more than $100 million a year.

“This acquisition expands on the broader diversification strategy for IVE and positions our Blue Star Direct business as the market leader in the customer data management space,” said IVE’s chief operating officer, Matt Aitken. “SEMA bring to the table credibility in the essential communications space and have a range of additional capabilities and technologies that enable us to enter new sectors in the market.”

SEMA’s managing director John Stewart said: “The synergies between our businesses are compelling. Both have a customer first culture, many decades of proven history and a pedigree of high performance, diversity, innovation and quality. I very much look forward to continuing to build on our successes as we combine and strengthen our offer to the market.”

Selig said the purchase of a second LFWO press for the new Franklin WEB (NSW) site would finalise the rebalancing of LFWO capacity from Victoria to NSW to better service national retailers and publishers. This rebalancing of capacity has been instrumental in IVE securing new contracted revenues, he said.

“The second component of the raise is $22 million for the second 80-page web offset press and ancillary equipment – by ancillary equipment we mean post-press automated finishing equipment – at Franklin Web NSW. This is in addition to the first 80-page press that is being installed as we speak in our Franklin Web facility here in Sydney.”

The second 80-page press is scheduled to be commissioned at Huntingwood in August 2018.

$11.2 million from the capital raising will be used to fund more strategic acquisitions. “We have a very strong pipeline of acquisition opportunities,” said Selig. “I don’t think the company in the coming 12 or 18 months will be as acquisitive as we have been in previous years but there’s still some good opportunities around and we would like to take advantage of those if they work for the business.”

IVE has four divisions – Kalido, Blue Star Group, Pareto Group and IVEO – and employs 1,500 people across operations in Sydney, Melbourne, Brisbane, Singapore, Hong Kong, China and New Zealand.

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