New business buoys Wellcom sales up 42 per cent

Wellcom has posted another round of double-digit gains with client big wins in Australia and its American business performing better than expected, with more takeovers mooted.

The pre-media and print management company boosted profits by 11 per cent for the first six months of the 2015 financial year to $4.63m, backed up by a 42 per cent net revenue jump to $41.4m and statutory revenue increase of 24 per cent to $54.8m.

The about $13.4m revenue difference consisted of print management pass through costs, 10.4 per cent less than the same period of FY14, while EBITDA was up 24 per cent to $7.8m.

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Revenue from Australasian operations increased 7.6 per cent to $26.2m with profit rising 6.1 per cent to $6.3m, led by new content creation business wins in Australia with Stockland, Kmart, and Target. Australia contributed 95 per cent of revenue in the region.

The Australasian operation added 29 new jobs, up 10 per cent, 23 of which are in Australia and six at its Malaysian Centre of Excellence, where it says it is “leveraging low cost production”.

Wellcom chief financial officer Andrew Lumsden says the Malaysian operation is expanding "through organic growth within the region together with the ability to offer our Australian client base improved turnaround times where required due to the time difference", rather than through shifting work offshore from Australia.

Wellcom’s $7.1m acquisition of American pre-media and print management firm theLab a year ago earned almost $9m in the first half of the year – bringing its total to about $14.2m so far. Wellcom says it is “performing ahead of expectations”.

Its revenue in just the first 10 months of ownership is almost as much as its pre-acquisition $14.5m annual turnover, and considerably more expected in future years from both its own business and through exposing Wellcom to USA-based multinational brands.

It is now making more money than the UK business, which rose 29.7 per cent to $6.3m but had its margins slashed by three quarters and barely turned a profit due to “the absorption of costs associated with new business wins”.

Wellcom says it continues to ‘pursue complimentary acquisitions that would augment both the geographic and production capabilities of the business’.

Wellcom has no net debts and increased its net assets from $58.4m to $60.27m in the past six months, giving it plenty of firepower to buy its way to a global reach.

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