IVE Group delivers strong half year result

The ASX listed IVE Group delivered a strong performance in its first half results, hitting all its targets and milestones in what was an exceptionally busy six months.

In the half year revenue was up by 73 per cent on the same period last year to $359m, pro forma EBITDA was up 56.9 per cent to $38.3m, pro forma NPATA was up 53.4 per cent to $19.1m.

The company says it is on target to meet its full year EBITDA guidance of $72m-$77m. IVE share price was up 2.25 per cent at noon.

Revenue was boosted over last year by the income from acquisitions Franklin WEB, AIW, and in the final quarter SEMA and Dominion.

[Related: IVE co Kalido wins sales award]

Net debt is 1.6 times full year pro forma EBITDA guidance of $75 million (mid-point guidance). Shareholders will receive an interim dividend declared of 8 cents per share, fully franked.

IVE met all its operational milestones, with the Franklin WEB Victoria and AIW merger completed in December, the Franklin WEB NSW greenfield site fully operational November 1, and a second 80 page manroland Lithoman heatset web press and ancillary equipment ordered for Franklin WEB NSW. The Blue Star DISPLAY Victoria merger with Franklin WEB’s retail display business and further expansion was completed in July, and the SEMA acquisition completed September, full integration with Blue Star DIRECT is on track for completion by May, and Dominion fully completed mid November.

The Franklin WEB Victoria site saw its print volumes increase by 23 per cent with the integration of AIW. IVE is investing $50m in its Franklin WEB NSW site, to create a highly automated and low cost print production facility, including two manroland 80pp Lithomans, with perfect binding and stitching lines also commissioned. The Group is making a capex investment of $5.5m as part of the SEMA integration in a high speed variable ink jet devise that enables Blue Star DIRECT to have a similar offering across all three locations in Victoria, NSW and Queensland. The SEMA brand will be retired on full integration.

IVE Group executive chairman Geoff Selig says: “It has been an important period for the Group as we successfully delivered over the last six months on all operational milestones as outlined at the annual general meeting in November last year.

“The Group’s financial performance is well up over the prior corresponding period, and strong cashflows continue to support our ongoing high dividend yield. We have a sound track record of delivering a meaningful dividend stream to shareholders, with $36.5m (including interim dividend for H1 2018) of fully franked dividends paid since listing in December 2015. Importantly, our balance sheet remains conservative, with net debt of 1.6 times pro forma full year mid-point EBITDA guidance of $75m.”

[Related: Blue Star acquires Dominion]

Warwick Hay, IVE Group managing director says, “It is a really strong half year, meeting all our milestones, seeing an uplifts in revenues across the board, seeing debt down to 1.6 times. It is a tribute to the talent and hard work of the management and staff to have achieved so much, including the opening of the new greenfield Franklin WEB site and the integration of SEMA and Dominion. We anticipate this momentum continuing into the second half.”

Hay says, “Having delivered operational success across our key business offerings, including our expanded value proposition, we are in an excellent position to continue to grow and create further value for our shareholders. The benefits from the investments we have made are flowing through, as we remain keenly focused on our objective of providing an unparalleled marketing and print communications offering to our customers.”

Heatset rival PMP has yet to release its figures, but in contrast to IVE, has issued two profits downgrades, one in November last year and one earlier this month, to nearly half that counted at the release of its full year results, sending its share price plummeting from 78c to 49c on the first downgrade  and then 35c on the second. 

In its presentation to analysts IVE says the marketing services and print communications industry is dynamic and constantly evolving. It says its response to this evolution has been to maintain relevance with our customers through ongoing investment and expansion of its product and service offering.

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