Wellcom hit by Dick Smith, Masters

Wellcom has released its full year results, with statutory revenue down seven per cent and EBITDA down by two per cent, the company blaming the demise of local retail clients Dick Smith and Masters as the major contributing factors.

The decrease in net revenues also followed a strengthening of the Australian dollar against overseas currencies, with net sales on a constant currency basis being consistent with the prior year.

Revenue slipped to $145.1m compared to $156.24m from last year. Its net revenue was $98.7m, down five per cent compared to $103.4m in the prior year, its EBITDA at $18.7m compared to $19.08m last year was down by two per cent, the EBIT came in at $15.9m, down three per cent compared to last year’s result of $16.4m, and  profit after tax from continuing operations came in at $10.6m down four per cent from $11.1m.

Wellcom says it has been successful in replacing the client losses of Dick Smith Holdings, Masters Home Improvement and Stream Solutions, with significant new business wins including Pernod Ricard in the US, J.C.Penney in the US and Sigma Pharmaceuticals.

[Related: Wellcom revenue down as profit rises]

Wayne Sidwell, executive chairman at Wellcom says, “We are pleased to report that, following a strong finish to the year, the group has exceeded recent earnings guidance,. We are also happy to announce the significant recent new business wins of News Corp, Mercer, Tesco in the UK, Red Lobster in the US and Southeastern Grocers in the US, all of which will have a positive earnings impact in the forthcoming year. Importantly, both Tesco and Southeastern Grocers represent the first significant Knowledgewell implementations into the US and UK markets respectively.

“A positive outlook for the group together with a debt-free balance sheet and strong cash flows from operating activities has allowed the full year dividend for the year ended June 30 2017 to be increased to 23 cents per share, reflecting a payout of 85 per cent.”

For its outlook, Wellcom says it will continue to push its proprietary Knowledgewell technology into overseas markets, following the current implementations into the major supermarket retailers of Tesco and Southeastern Grocers.

Wellcom says it will pursue further complimentary acquisitions that would augment both the geographic production capabilities of the business and deliver increased shareholder returns over the long term.

Wellcom is an independent creative production and marketing services agency, providing content creation and content management services in Australia, New Zealand, Malaysia, the UK and the USA.

From September 1, Sidwell will step down to non-executive chairman, he says, “The Wellcom Group is in an excellent position with strong leasers and management teams in every part of the business. I will continue to play an active role in mentoring and supporting these individuals and remain exceptionally passionate about the future for Wellcom and all our stakeholders.

Andrew Sidwell, Wayne Sidwell’s son is the current CEO, replacing Steve Rees earlier this year.

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