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.
Fortunate to have known Matt since he set up further down Harris Street. A great advertising man, and obviously a great CEO. Who has galvanised a talented group of people to prove the naysayers wrong year on year. Impressive. Congratulations Matt.
RG.
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I’m no maths professor but pretty sure a rise from $4.9m to $8.5m doesn’t equal a 372.2% increase…
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either your numbers or your maths is way off.
profit of 13.5m, up from 10.4m is an increase of just under 30%…how did we get to 372%?
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Hi Mathematially challenged,
Net profit after tax (NPAT) including significant items was $1.8m for FY17. It was $8.5m for FY18. That is a 372.2% increase
The $4.9m figure you cite is the FY17 NPAT excluding significant items figure.
Hope that clears it up,
Vivienne – Mumbrella
Hi Fleshpeddler,
It appears you are referring to EBITDA (earnings before interest, tax, depreciation and amortisation) figures.
In talking about profit, I am referring to NPAT (net profit after tax) including significant items, which jumped from $1.8m to $8.5m – a 372% increase.
You are correct. EBITDA did not increase by such a large figure. NPAT, however, did.
Still a massive number, so we’ll have to ask Enero how they did it.
Vivienne – Mumbrella
NPAT may make the nicest headline but ime, EBITDA is the key figure
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Hi Viviene.
I was wondering did the Enero data report a +372.2% increase in the NPAT (including significant items) or did you derive it from the data.
If it was derived (which I believe is the case as $8.5m/$1.8m = +372.22222%) I think you are torturing mathematics by reporting the growth to the first decimal place.
That rounded $8.5m could have been as high as $8,549,999 or as low as $8,450,000. The rounded $1.8m could have been as high as $1,849,999 or as low as $1,750,000.
This means that the growth could have been anywhere between +356.8% and +388.6%., which I am sure you can appreciate is an 8.9% difference.
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Go Enron!
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Hi ‘Josh’,
Apologies I’m only just coming back to this now – your comment got lost in the sheer volume of competing comments which came through at a similar time. I hope you are still interested in my response.
Yes, Enero did report the 372.2% increase in NPAT (including significant items). I have now update the article to include a screenshot of Enero’s reporting.
To clear up any confusion around rounding, and to counter or confirm the accusation that I am ‘torturing mathematics’ (heavy), I have gone back into the financial report of Enero.
To clarify. The $8.5m figure was rounded (by Enero) from $8,473,000. The $1.8m figure was rounded (by Enero) from $1,796,000.
I calculate that to be a 371.7% difference, which, via rounding, means my headline remains correct. Deeper in its report, Enero calculates it as 371.8% (likely because they have the figures down to the dollar, not because they want to go to war with maths).
The 372.2% figure however remains what Enero reported in its headline results (slight difference down to, as you say, rounding).
In any case, you are correct that rounding was a contributing factor here. I would contend, however, that you are incorrect in the assumption that means my numbers are dramatically (8.9%) off, and in the accusation that I am involved in torturing the discipline of mathematics.
I am (as always) open to being corrected (again) though.
Vivienne – Mumbrella