Despite a decrease in profit and revenue over FY2017, Spicers improves its EBIT and net cash inflow.
Paper merchant Spicers saw its net sales revenue for the year come to $380m, a 10 per cent decrease from the 2016 result of $422m. Print & Packaging declined 6.7 per cent, accounting for $303m in revenue, while Sign & Display grew by 14.3 per cent, accounting for $77m.
Statutory profit after tax is $1.7m, significantly down from the pcp result of $5.3m, with Spicers noting the pcp included a greater level of non-recurring benefits related to the discontinued operations in Germany.
Australian sales revenue for FY2017 is down 4.3 per cent, which Spicers attributes to declining volumes and tough trading conditions in the commercial print category. The 4.3 per cent drop was lower for commercial papers, its fall was partially offset by gains in Sign & Display. EBIT in Australia dropped 44.6 per cent, to a result of $2.3m from 2016’s $4.2m.
Underlying EBIT across Spicers is $4.9m, compared to $4.5m in the prior corresponding period (pcp), with improved New Zealand, and Asia results offsetting weaknesses in Australia.
Profit after tax is $0.4m, dropping more than 70 per cent from the pcp result of $1.5m, however, Spicers points to the $2.1m in restructuring costs related to warehouse rationalisation and headcount reduction.
Net cash inflow from operating activities, including discontinued operations, is $6.3m, compared to the negative result of a $13.6m outflow in 2016.
Net cash inflow from operating activities for continuing operations is $6.7m, compared to the net outflow of $13.6m in the pcp.
Spicers says the recent bolt on acquisition of NZ-based LED and Neon component distributor, Sign Technology, will provide further opportunities for growth in Sign & Display revenue streams going forward by giving access to strong global brands in this market sector.
David Martin, CEO, Spicers, says “While volumes continue to decline and trading conditions remain tough in our commercial print markets, it is pleasing to report that we have been able to deliver an increase in group underlying earnings with good results from our New Zealand and Asian businesses and a reduction in continuing corporate costs as activities continue to be rationalised.
“I am also pleased to be able to confirm an operating cash inflow of $6.3m for FY 2017, with the Australian business in particular delivering a significant turnaround on the prior year due to a strong focus on cash and working capital.
“Our changed approach to portfolio and product segmentation has delivered profitable growth in Sign & Display and other diversified categories, while we continue to focus on maximising our positions and returns in our Print & Packaging markets. I am confident this approach will also bring future growth opportunities as we move forward.
A shakeup is due to occur in the Spicers executive branch, with two new members to be voted in, and CFO Wayne Johnston may lose his position pending a vote. The Extraordinary General Meeting is taking place September 6.
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