Event non-ATF Mobile

Small Cap company IVE Group (ASX:IGL) inks contract with ACM, Over $100 million revenue expected

  • October 26, 2020 11:30 PM AEDT
  • Team Kalkine
Small Cap company IVE Group (ASX:IGL) inks contract with ACM, Over $100 million revenue expected

Summary

  • ASX-listed IVE Group has signed a long term deal with Australian Community Media for printing and distribution of publications presently published and managed by ACM.
  • IVE is expecting to generate revenues of more than circa $100 million over the five-year term through this deal.
  • COVID-19 has negatively impacted IVE's FY20 revenues of $691.5 million.
  • The Board has resolved to suspend the final dividend for FY20 due to the ongoing economic impact of the pandemic.

Marketing company IVE Group Limited (ASX: IGL) has signed a long-term deal with Australian Community Media (ACM). The contract is for printing and distribution of publications which are presently published and managed by ACM. The Company is expecting to generate revenues of more than circa $100 million over the five-year term through this deal. Furthermore, it is anticipating revenue transitioning to IVE over the remainder of FY21. 

IVE will also acquire selected assets of ACM's web offset printing operation in Mandurah, Western Australia to support ACM's requirements, and further enhance service to its customers. Completion is due to take place on 30 October 2020, subject to customary conditions.

IVE's Financial Report for FY20

source: ASX announcement dated 23 October 2020

IVE Group’s total revenue for FY20 was $691.5 million.

It comprised acquisition revenue for H2 for Salmat Marketing Solutions (now IVE Distribution) and Reach Media of $50.0 million. When normalised for the acquisitions, revenue declined by $82.1 million from PCP of $723.6 million to $641.5 million. 

The COVID-19 pandemic had been affecting revenues from March 2020 till the end of Q4. As a result of COVID-19 impact, the Group qualified for the Federal Governments JobKeeper Program (i.e. April 2020 revenue down by more than 30 per cent to PCP).

IFRS and underlying gross profit was $329.6 million, compared to $346.6 million in PCP. IGL's gross profit margin has remained stable over the period at 47.7 per cent. By normalising for Salmat/Reach revenue, the gross profit margin stands at 48.6 per cent, an increase in PCP. 

IFRS EBITDA of $63.9 million also includes the net benefits of JobKeeper of $15.1 million. Non-operating items excluded from underlying earnings

— $8.7 million restructuring costs.

— $3.6 million acquisition costs.

— $40 million impairment to goodwill.

Underlying EBITDA of $76.6 million and an EBITDA margin of 11.1 per cent including JobKeeper on a continuing business basis compares to FY19 of $82.0 million. 

Net debt reduced from 23 March 2020 market update by $36.9 million to $137.1 million at 30 June 2020 due to tight liquidity control and working capital management from the start of COVID-19 period. 

On 23 March 2020, the Group notified the cancellation of the H1 FY20 interim dividend of 8.6 cents per share amounting to a total of $12,700 thousand. The Board has decided to suspend the final dividend for FY20 due to the continuous impact of the pandemic, to continue strengthening the balance sheet and support opportunities to create additional value for shareholders further.

IVE aims to resume dividend payments consistent with the existing dividend policy beginning H1 FY21 interim dividend. The company declared and paid total dividends of $11,412 thousand to its members during the 2020 financial year. 

On 26 October 2020, IGL was trading at $0.750 at AEST 3:16 PM, up by 2.739% from the previous close.

All financial information pertains to Australian Dollar unless stated otherwise.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!

 


Disclaimer
The website https://kalkinemedia.com/au is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) or engage in any investment activity under discussion. We are neither licensed nor qualified to provide investment advice through this platform. All pictures are copyright to their respective owner(s). Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

   
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK