Salmat has recorded a full year revenue of $435.3m, down 3.4 per cent from the prior year , bit with its underlying EBITDA coming in at $22.8m, up 16.3 per cent from the prior year.
Salmat says its revenue of $435.3m is down $15.5m from prior year as new business growth did not fully replace expired contracts. The products and services rationalisation undertaken during the business transformation accounted for more than $13.7m in discontinued revenue. While discretionary spend and volumes reduced in some markets, increased spend by existing clients boosted contact centre revenue in particular.
When it comes to replacing expired contracts Rebecca Lowde, CEO at Salmat says, “We need to fill the gaps by growing new business and also growing our business with existing clients. We are implementing a number of initiatives to make this happen and have also recently boosted our business development teams to help us achieve this.
“Earnings are on the right track. Underlying EBITDA has grown steadily each year for the past three years and EBITDA as a percentage of revenue has also grown. We are now also generating cash. These are all positive indicators that the transformation initiatives are taking effect.”
Underlying EBITDA was up $3.2m from $19.6m to $22.8m, this was due to the cost savings initiative contributing $9.5m and increased business from both new wins and existing clients contributed $4.2m.
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Lowde says, “The return to full year profit is a significant milestone for Salmat. While revenue was down this year, we have been able to do more with that revenue, growing both earnings and net profit. We are also generating more cash from operations.
“These full year results are a testament to the work we have done to transform Salmat’s business operations, but we remain mindful of the ongoing challenges of the current economic landscape. We are setting plans in place to address these market challenges, innovate Salmat’s service capabilities and grow new business.”
Underlying profit before income tax came in at $7.7m up 83.3 per cent from the prior year due to depreciation and amortisation as well as net interest expense remained largely consistent on the prior year.
Significant items had a net cost impact of $0.6m, compared with a net cost of $6.8m in the prior year. The key items for this year were costs associated with restructuring and the strategic review undertaken in the second half, as well as an impairment cost associated with investment in a joint venture, offset by profit on the sale of shares in an investment and a fair value adjustment gain on financial liabilities.
Salmat announced at half year that the business was undertaking a strategic review of options to drive profitable growth and maximise shareholder returns. This review was sparked by external market conditions- including sustained pressure in the retail market and print industry consolidation- that have had an ongoing impact on sales revenue and dampened growth.
Lowde says, "We are very much focused on strengthening our core businesses of catalogue, digital and contact and finding ways to innovate over these businesses to ensure we maintain our market leadership. We’ll also be improving our sales capabilities and pursuing new growth opportunities for the benefit of our staff, clients, partners and our shareholders."
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