IVE increases profits by 22% as it plans to streamline brand names

IVE Group, parent company of Kalido, Blue Star, Pareto and IVEO, has reported a 22% uplift in profits for the 2019 financial year to $31.04m

The company said that in November, it will drop the four brands to trade under one IVE brand name in order to “create a highly impactful, strong and simplified offer to the market”.

Earnings before interest, tax, depreciation and amortisation (EBITDA) was $77.3m. Pro forma results, however, which exclude restructure and acquisition costs, was $80.4m, up 9.8%.

IVE Group’s results for 2019 (Click to enlarge)

Restructure costs for the financial year were $3.1m, while acquisitions cost $0.5m.

The group invested $6.4m in high speed continuous inkjet technology to support “further expansion in personalised communications”.

Net profit after tax (NPAT) on a pro forma basis was $33.8m, up 4.5%

IVE’s pro forma results (Click to enlarge)

IVE Group executive chairperson, Geoff Selig, said: “We are very pleased to have again delivered a solid result, a year that brought to a conclusion the most significant investment program the sector has seen for many years. Strong free cashflow continues to underpin an ongoing very healthy dividend yield”. 

In its presentation to investors, the company said that the global pulp and paper market has faced a volatile 12 months. This means increases in paper prices have negatively impacted margin in the Franklin Web business, and resulted in the need to temporarily purchase significantly more inventory. Over the past three months, however, the group said there had been some stabilisation.

Additionally, IVE noted that it has experienced no “material client losses” and has signed a number of contract extensions in the period. Kalido Asia, however, has continued to face “unacceptable levels of bad debts”.

With regards to the transition from four brands to one, CMO Rob Draper added that it will benefit clients.

“We couldn’t have a better platform from which to transition to one unified IVE brand in November this year,” Draper said.

“Being able to consolidate under one brand will further integrate our unparalleled offering, provide simpler access to our services, and ultimately make our clients experience in partnering with us easier moving forward. It’s an exciting time to be part of IVE.” 

Click to enlarge

IVE forecasted that “the solid performance and strong free cashflow” will continue in FY20.

Following a period of heavy investment in a number of strategic growth initiatives, FY20 targeted and maintenance capital expenditure reduces significantly to circa $8-10m,” it said.

“The Group also has no further deferred consideration payable from prior acquisitions. FY20 significant items are once again expected to be minimal.”

CEO Matt Aitken said the 2020 financial year will involve a number of important initiatives.

“We will continue as always to be relentless in our focus on delivering for our customers, and ensuring we operate as efficiently as possible to deliver an acceptable return for our shareholders. We have an exciting year ahead with a number of important initiatives to support the ongoing strength and sustainability of the business,” he said.


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