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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


  • 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.


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