Marketing services provider Salmat’s half year results saw the company’s EBITDA and profit before tax rise strongly while revenue dropped by 4.7 per cent $11.1m.
Salmat half year revenue is $224.5m, EBITDA is $13.4m, up 45.7 per cent, and the profit before tax is at $5.4m, compared to pcp at $1.2m.
Craig Dower, CEO, Salmat says the company’s transformation program that commenced in the 2015 calendar year is delivering results.
“Salmat has transformed significantly over the past two years. The major changed are now complete, our priority is new business and revenue generation. The underlying EBITDA growth we have achieved this year reflects the progress we have made with the transformation. This is the fourth successive had that we have posted earnings growth.”
Salmat sold its printing arm – or business process outsourcing as it was called – to Fuji Xerox almost five years ago for $375m. It remains a major print buyer, it has just produced 20 million leaflets for Pizza Hut as part of an integrated marketing campaign.
[Related: Salmat boosts Pizza Hut with print marketing]
Salmat says the revenue drop was due to the new business not yet fully compensating for the decline in revenue following the product and services rationalisation. Reduced discretionary spend and expired contacts also impacted total revenue. New business growth during the half mainly took place in digital and contact.
The EBITDA grew 46 per cent due to cost savings from the transformational program continuing to assist improvement at this line and earnings from new business also made a positive contribution.
Dower says, “The business transformation of the past two years has effectively focussed our attention on areas of market leadership, simplified every aspect of our operations and built the foundations for growth. Now more than ever, Salmat is well-placed to take advantage of market opportunities, as we aim to drive further profitable revenue.
“Revenue reduced for a period due to the product and services rationalisation but has grown again in this half. EBITDA has increased period on period since we started the transformation. We are maintaining a focus on costs and targeting additional business to continue this course.
“While there is still work to be done, we are on track to achieve the sustainable and profitable growth we are targeting.”
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