Spicers is seeing positive results for the full year, with its underlying EBIT coming to $7.9m, up 3.1m or 63 per cent from $4.8m in the prior corresponding period (pcp).
Revenue for the year was $384m, up 0.9 per cent from $380.6m in the pcp.
The company’s statutory profit after tax more than doubled, coming to $3.5m, 107.5 per cent higher than the prior corresponding period (pcp) result of $1.6m.
In Australia, the company’s underlying EBIT of $4.2m was 80.6 per cent higher than $2.3m in the pcp, which Spicers says was driven by improved trading across key product categories. Net sales revenue for the country came in at $204.4m, increasing by 1 per cent from $201.8m while profit before interest and tax more than doubled, coming in at $3.2m, up 109.8 per cent from $1.5m.
The surge in earnings was said to be due to a combination of higher gross profits across both the Print & Packaging and Sign & Display categories and reduced operating costs.
Restructuring of the Australian arm, including corporate, delivered labour cost savings of $2.2m.
New Zealand’s underlying EBIT came to $7.3m, slipping by two per cent from $7.4m in the pcp, while sales came to $93.4m, down 8 per cent from $101m in FY17. Spicers says the region had solid profitability across its product categories and tight control of trading expenses.
[Related: Spicers earnings up 63 per cent]
In Asia, the company’s underlying EBIT of $2.2m was 18.1 per cent higher than $1.8m in the pcp in local currency terms, which Spicers says was driven by strong sales in Print & Packaging categories. The region generated sales of $86.6m, up by 11 per cent from $78m.
In the different sectors, Print & Packaging and Sign & Display revenue streams both grew, at 0.5 per cent and 2.6 per cent respectively. Print & Packaging saw sales of $304.7m, a slight increase from $303.3m in FY17. Sign & Display made $79.3m, increasing from $77.3m.
Spicers says media and consumables sales revenue grew solidly in both Australia and New Zealand, up by 6.9 per cent on the pcp. Hardware sales on the other hand provided lower profit returns for the business than media and consumables and was also behind on the pcp, with Spicers citing challenging market conditions.
David Martin, CEO of Spicers says, “These pleasing results for FY2018, with overall earnings and cash flows strongly improved on the prior year, reflect the ongoing drive of our people across the business to deliver on our strategic priorities.
“Our focus on customer and market engagement has driven improved trading results across our key product revenue streams, particularly in Australia and Asia. Our New Zealand business continues to deliver solid returns in challenging market conditions.
“We have now accelerated cost savings in our Australian organisation from the streamlining of operational and administrative activities. Our New Zealand business also delivered significant reductions in trading expenses, particularly from the successful relocation of its Auckland premises during the period.
“Our sharp management focus on supply chain efficiency and working capital has generated strong operating chase inflows in FY2018, particularly in the second half. Product portfolio breadth and inventory levels continue to be tightly managed, while overall debtor and creditor payment terms have been improved in the period.
“These strong FY2018 results reflect a business delivering on its promises to customers and shareholders. Going forward, we will continue to use our structured approach to portfolio and product segmentation to generate profitable revenue growth and identify new growth opportunities. We are driven to continue to optimise operating returns and cash flows, across our Print & Packaging and Sign & Display product categories.”
Jonathan Trollip, chairman of Spicers adds, “I am pleased that Spicers has been able to deliver substantial improvements in earnings and cash flows in FY2018, and thank our people for their commitment in achieving this. Following these strong results, the Board is reviewing options to recommence some form of distribution to shareholders, and will update the market accordingly when a decision is made.”
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