Australian-based creative production agency Wellcom is 8 per cent down on statutory revenue from last year, bringing in $73.9m in the 1H2017, compared to $80.3m in 1H2016.
While revenue is down, profits are up, with 1H2017 seeing profits of $5.7m, up from 1H2016’s $5.39m.
Wayne Sidwell, executive chairman of the Wellcom Group says, “Careful cost management practices have followed generally challenging market conditions and the recent closure of two large clients, Dick Smith Electronics and Masters Home Improvement.”
Net revenue (which excludes print management pass through costs) of $49.7m for the half-year is 5 per cent down from 1H2016’s result of $52.1m. EBIT for 1H2017 is $8.47m, five per cent higher than last year’s result of $8m. When the foreign exchange impact is taken into account, Wellcom says its revenues have grown by 1 per cent.
Capital expenditure for the HY is down significantly from last year, with Wellcom spending $0.8m, compared to $2.21m last HY.
In Australasia, net segment revenue is $27.6m, down 3.5 per cent from 2016’s HY result of $28.6m, while staffing levels dropped 7.4 per cent, from 339, to 314. The profit margin increased from 21 per cent to 24.4 per cent.
The company notes last year’s losses of Westpac Bank, Dick Smith, and Masters, are balanced by new business wins of AHM Medibank, Sigma Pharmaceuticals, Chemmart and Treasury Wine Estates, all in Australia.
Wellcom says its lack of debt, $4m cash on hand, and net tangible assets per share of 43.62 cents displays a strong cash and financial position.
Sidwell says, “A positive outlook for Wellcom with strong prospects in key markets, and a debt-free balance sheet, has allowed the fully franked interim dividend to be increased to 9.5c a share.”
EPS is 14.53c, up 5.6 per cent from 1H2016’s 13.76c, while DPS is 9.5c, up 5.6 per cent from 1H2016’s 9.0c.
The return on net assets improved 6.5 per cent, reaching $17.34m, from the PCP’s $16.28m.
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