Marketing services company Salmat records $5.2m loss after strategic review

Over $16m in significant items costs has been blamed for Salmat’s $5.2m loss, announced to the ASX today.

In the 2017 financial year the company improved its fortunes, posting a $4.3m profit after an $8m loss the year prior, however restructuring costs following business sales and “an impairment on loss of goodwill in the Marketing Solutions operating segment” held the business back this year. 

Salmat is suffering from the ongoing decline in its catalogue business

The company said continuing industry decline in the catalogue business, ongoing pricing pressures in the market and non-performance of some of the digital business ultimately cost the company $15.3m. 

The company also suffered from a 3.2% revenue decline, down from $258.5m in FY18 to $250.2m. The revenue decline was also attributed to troubles in the catalogue business and reduced activity in the digital business, as well as continued pressure on clients in a weak retail environment.

Salamt’s CEO Rebecca Lowde said it had been a year of change for the company.

“These results reflect Salmat’s new, smaller continuing operations following a year of change,” she said.

“The major contact centre business was sold following a comprehensive analysis of the entire Salmat Group through the strategic review process. We also sold the MessageNet business and some smaller digital businesses as part of the same review,” she said.

Salmat has now concluded a strategic review, which it says has refined its strategic priorities for the coming financial year.

“We are now more clearly focused on driving results from the remaining Marketing Solutions and Managed Services businesses,” Lowde added.

FY19’s key strategic pillars will be “Marketing Solutions Evolution, Sales Excellence and Operational Sustainability, underpinned by People”, according to the ASX release.

The new focus will help Salmat get back on track, Lowde said.

“While FY18 saw some significant change to the Group, FY19 represents a fresh opportunity to revitalise Salmat’s Marketing Solutions business and drive further growth in Managed Services,” she said.

The Marketing Solutions segment of Salmat “delivers relevant, targeted and integrated communications across all digital and traditional channels”, Salmat said.

“Salmat’s solutions enable clients to interact and engage with their customers through national letterbox distribution, digital catalogues, pre-shopping website Lasoo, search (SEO, SEM and display advertising) and email.”

The other focus, Managed Services, produces outsourced business solutions – including back-office processes and digital creative, development services and contact centre services.

The company used its annual report to flag the potential business risks coming from the Australian retail sector, as well as its strong reliance on a large number of independent contractors and numerous technology applications.

“We have a well-defined path to innovate our existing capabilities and extend Salmat’s reach and market share. We look forward to sharing our progress during the year ahead,” Lowde concluded.

Lowde’s remuneration totalled $1.052m, up from $615,316 last financial year, thanks largely to a $429,225 retention/ discretionary bonus, which related to the finalisation of the strategic review and sale of businesses.


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