Salmat has seen a net loss after tax of $5.2m for the full year, with its revenue slipping by 3.2 per cent to $250.2m, down from $258.5m in the previous corresponding period (pcp).
Underlying EBITDA for the year came to $20.3m, holding steady from the pcp result of $20.2m.
The company says its $5.2m loss figure can be explained by $16.6m in significant item costs, compared with $0.6m in FY17. Salmat made a profit of $8.7m in its previous year’s result.
Salmat notes $15.3m of the significant costs related to an impairment on loss of goodwill in the Marketing Solutions operating segment, with the due to restructuring costs following business sales.
The company produced 4.2bn catalogues, a three per cent slip from 4.3bn catalogues in the pcp. Salmat says its catalogue volumes decreased, along with the overall industry, while it maintained its majority market share. In the past year it rolled new digital business and service levels, establishing its app salmathub.
The marketing solutions sector, which includes Salmat’s print media, generated a revenue of $176.9m, dropping 7.5 per cent from $191.2m in FY17. EBITDA for the segment came to $16.6m, decreasing by 5.7 per cent from $17.6m.
Salmat CEO, Rebecca Lowde said: “These results reflect Salmat’s new, smaller continuing operations following a year of change. The major contact centre business was sold following a comprehensive analysis of the entire Salmat Group through the strategic review process. We also sold the MessageNet business and some smaller digital businesses as part of the same review.
“FY19 represents a fresh opportunity to revitalise Salmat’s Marketing Solutions business and drive further growth in Managed Services. We have a well defined path to innovate our existing capabilities and extend Salmat’s reach and market share.”
[Related: Salmat sales down while profits grow]
The company says revenue was impacted by both volume declines in the catalogue business and reduced activity in the digital business.
A spokesperson notes, “Continued pressure on clients in a weak retail environment also impacted revenue as discretionary spend reduced.
“Cost saving initiatives continued to have a positive impact, with EBITDA up $0.1m.
“Underlying profit before income tax from continuing operations of $13.7m was up $3.5m on FY17. Depreciation and amortisation was lower than the prior year as previous asset purchases continue to be written down.
“Underlying profit after tax but before significant items from continuing operations was $11.4m.
“As the strategic review concluded, Salmat’s key strategic priorities for FY19 were reviewed and refined. The sale of the contact centre business and non-core digital businesses has enabled a tighter focus on the Marketing Solutions and Managed Services segments, with specific growth and innovation actions set out for the coming year. Many of these initiatives are already underway.
“The key strategic pillars for FY19 relate to Marketing Solutions Evolution, Sales Excellence and Operational Sustainability, underpinned by People. Specific programs under these relate to areas including the salmathub catalogue distribution app; Lasoo; data insights; automated collation technology; client engagement and retention; service standards; and culture. New business, revenue and profit growth are key to each of these initiatives.”
Lowde clarifies, “While FY18 saw some significant change to the Group, FY19 represents a fresh opportunity to revitalise Salmat’s Marketing Solutions business and drive further growth in Managed Services. We have a well-defined path to innovate our existing capabilities and extend Salmat’s reach and market share. We look forward to sharing our progress during the year ahead.”
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