IVE Group – which includes Blue Star Group – saw all its half figures heading in the right direction, and says it is going to establish a new greenfield large format web offset plant in NSW.
The IVE half year results show the company is on its way to finishing the year strongly, says executive chairman Geoff Selig.
IVE Group delivered a 5.9 per cent increase in revenue in the first half to $207.7m, up from the prior corresponding period (pcp) result of $196.1m, with EBITDA of $24m also up by 8.1 per cent on pcp, on a pro forma basis.
IVE says the pro forma revenue growth of 5.9 per cent reflects the increased revenue through a combination of new business, expanding its existing customer base, expanded service offering and acquisitions. The EBITDA growth of 8.1 per cent compared to last year was achieved through revenue growth, stable gross profit and the continued management of production and administration costs, continuing to expand EBITDA margin.
The company says its gross profit margin at 53 per cent compared to 52 per cent pcp has remained stable due to managing inputs, continued leverage of supply chain, reducing outsourced expenditure where possible and work mix change.
[Related: IVE completed Franklin AIW buys]
Statutory revenue is up 12.5 per cent with EBITDA up 67.6 per cent on PCP, with the first half impacted by key acquisition and restructure costs primarily relating to the Franklin Web and AIW Printing acquisitions in mid-December. The H1 FY2016 statutory results were impacted by one off costs associated with the company listing on the ASX in December 2015.
The company says the results reflect continued growth through a combination of new business, as well as existing customer base, together with business acquisitions in the second half of FY2016, and the first half of FY2017.
Selig says, “We are pleased with our performance in the first half, with continued good momentum across the business. The acquisitions of Franklin Web and AIW Printing in December have been very well received by all key stakeholders, with our integration and expansion plan now well underway and on track. We expect the full year results to finish strongly and fell confident the business is very well positions for FY18.”
IVE says it is well placed heading into the second half of the year as it will benefit from its new business secured in the first half of the year, whilst continuing to grow market share in the second half through a mature prospect pipeline.
Going forward the company says its growth strategy is focused on increasing its value proposition to clients, winning new clients, winning a greater share of the wallet of existing clients, making more acquisitions and creating internal efficiencies.
The company has provided a range of $54m-$57m EBITDA (before key restructure and acquisition costs) for the full FY2017 year.
As a result of the Franklin and AIW acquisitions, net debt has increased to $116.8m and based on FY16 pro forma EBITDA (including Franklin and AIW) represents 1.9 times EBITDA.
The company notes that all key components of the Franklin /AIW integration plan and large format web offset expansion are on track to be completed in less than 12 months from the acquisition, with the expected synergies validated at a minimum of $11.5m per annum.
The positive HY result has been viewed favourably by the market, IVE shares trading up to a year high of $2.60, the launch price in December 2015 was $2.
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