IVE in strong position to reignite acquisition program

IVE executive chairman Geoff Selig says the strength in the balance sheet means Australia’s largest diversified marketing and print communications business is in a strong position to make a fresh acquisition without the need to raise capital if it wanted to take that step.

The company has made a number of significant acquisitions since listing on the Australian Securities Exchange in 2015, including the acquisition of Franklin WEB, AIW and SEMA.

IVE Group posted another strong result for the full year 2019 last week with revenue up 4.1 per cent to $724.2m and proforma EBITDA up 9.8 per cent to $80.4m despite a soft second half and margin pressure from increased global paper and pulp pricing.

Proforma NPATA was also up 4.4 per cent to $37.5m with shareholders to receive a final dividend of 7.7 cents per share taking the fully franked dividend for the full year to 16.3 cents, up 5.2 per cent.

“Trading conditions remain soft more broadly in the macro economic environment, with paper price increases in parts of our business challenging further. In saying that, we believe we have the best business in a tough sector” Selig told Sprinter.

A period of heavy investment in the $53m Franklin Web NSW large format web offset facility in western Sydney and the $6.4m expansion to its personalised printing capacity through the addition of new inkjet technology is now complete, with Selig declaring the 2019 results to be the cleanest yet, with the company in a strong position going forward to handle a new acquisition should the right one come along.

“We’ve completed two capital raises since we listed, and whilst we deployed those funds the right way, our investors at the moment don’t really want us to undertake another capital raise,” Selig said.

“We are in a good position to explore acquisitions and there are still some good opportunities out there, notwithstanding we made a decision 18 months ago to hold back for a while.

“We’ve got the balance sheet, the funding and the cash flow to support a reasonable sized acquisition without the need to do that.”

Predictably Selig ruled out any imminent acquisitions but said as the company has a track record of being acquisitive vendors regularly express interest in selling.

IVE Group‘s FY19 strong results would once again seem to demonstrate the underlying sustainability of their business and capacity to execute effectively on their strategic road map. The business has doubled in size and profit over the last four years.

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