ASX-listed printing company, Ovato, has recorded a $17.6 million profit in its half year 2021 results, an increase of $27.3 million on the prior corresponding period as it shed its marketing services and magazine distribution businesses.
Sales revenue was down 31.8 per cent to $161 million with total revenue down 26.6 per cent to $217 million with $55.3 million (or 23.4%) of the reduction in sales revenue due to the sale of its marketing services and magazine distribution businesses and the closure of its letterbox distribution business in Australia.
In an explanation of its results to the ASX, Ovato said:
“When the impact on revenue of those discontinued businesses is excluded, sales were down $19.9m pcp [or 11.6%] as the business continued to be adversely impacted by the COVID-19 pandemic, continuity of supply with retail customers adversely influencing future advertising decisions and some customer losses,” Ovato said in a statement to the ASX.
“Other Revenue at $56.0m down $3.8m pcp [or 6.3%] mainly due to the $47.2m profit on sale of the marketing services and magazine distribution businesses, $4.8m recognition of sublease revenue, $0.7m government subsidies NZ and $1.1m other revenue.”
No dividends were paid, recommended or declared for the current financial period.
Ovato says expenses were at $185 million, down $115m on the pcp with $51.5m due to discontinued businesses and a $31.8 million reduction in significant items.
“When the impact of discontinued businesses and significant items is removed expenses are down $32.1m pcp with $25.0m due to lower volumes offset slightly by increased sell price, cost savings through restructuring activities and lower depreciation due to impairments and disposals,” Ovato said.
Ovato executive chairman Michael Hannan said the business continues to be adversely impacted by COVID-19 with continuity of supply challenges for retail customers adversely influencing future advertising decisions and some customer losses YOY.
The results come as Ovato continues to re-focus on print as its core business. It follows a couple of tumultuous years which saw significant restructures, including the closure of the company’s print site at Clayton in Melbourne.
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