Enero profit jumps 372% as group looks to make further acquisitions

Enero Group – the holding company behind the likes of BMF, Naked, Hotwire and The Leading Edge – has seen its net profit soar 372.2% following the acquisition of Orchard Marketing and the realisation of cost reduction and cost efficiency initiatives.

The group also flagged it could be looking for further acquisitions which will enhance its geographical presence in certain areas or enable it to expand its services.

The Enero Group of companies

This financial year, the company bought Orchard Marketing, for an initial payment of $5m, with payments based on performance continuing until the end of the 2021 financial year.

The price for Orchard Marketing is capped at $27m.

Enero’s net revenue climbed slightly to $103.7m, up from $100.2m in the 2017 financial year. ‘Other’ revenue of $200,000 remained stagnant. Staff costs climbed slightly from $71.4m in FY17 to $72.3m, but the company reduced operating expenses from $18.6m to $18.1m.

This left Enero with an operating EBITDA (earnings before interest, tax, depreciation and amortisation) – excluding significant items – of $13.5m, compared to $10.4m the year prior.

Net profit after tax (NPAT) before significant items was up from $4.9m last financial year to $7.9m.

Once significant items were added in though, the difference between FY17 and FY18 was even more stark.

Last financial year, significant items cost the company $3.1m, leaving it with an NPAT to equity owners of $1.8m. This year, a significant item of $600,000 was added to the profit, leaving its NPAT to equity owners at $8.5m – up 372.2% from FY17.

The $600,000 addition was a gain on the sale of the Dark Blue Sea domain registry business and domain asset portfolio.

Last financial year, Australia contributed 44% of the company’s operating EBITDA and 43% of revenue. For FY18, Australia increased its share of both operating EBITDA and net revenue to 46%.

Enero CEO Matthew Melhuish said this financial year was a significant step forward in the grop’s strategic ambitions.

“Increases in key financial metrics of revenue, operating EBITDA and margin, coupled with the acquisition of Orchard Marketing during the year sets the group up for a successful year ahead,” he said.

“Orchard Marketing has enhanced the group’s digital capabilities in both Australia and the USA and is our key business in our digital pillar. Strong growth in our USA market businesses is re-balancing the geographic contributions of our key hubs.

“We remain open to further acquisitions to either enhance geographic presence in our hubs or expand services in key businesses.”

Enero – the Spanish word for January – was formerly known as Photon Group.

It changed its name back in 2012 after narrowly avoiding becoming overwhelmed by debt.


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