Highlights of interim financial results for the six months ended 30 September 2016
– Revenue increased by 4,5% to R2,18 billion (2015: R2,08 billion)
– Lower gross profit margin of 26,5% (2015: 31,4%)
– Operating profit decreased by 13,6% to R304,4 million (2015: R352,2 million)
– Headline earnings per share decreased by 16,4% to 63,3 cents per share (2015: 75,7 cents per share)
Novus Holdings’ (NVS) core printing business has reported on a satisfactory performance despite ongoing tough trading conditions. The Group’s results were most notably shaped by strained economic growth, coupled with a fluctuating and weakened exchange rate. Overall revenue increased by 4,5% to R2,18 billion compared to the first half of the previous year (R2,08 billion).
The Gross profit margin decreased by 4,9%, while operating profit decreased to R304,4 million from R352,2 million in the comparative period, mainly as a result of the forex impact and new projects not yet achieving profitability.
The Group’s print division experienced a marginal improvement in revenue to R2,04 billion compared to R1,97 billion for the previous period reported in 2015. The labels and tissue operations showed positive turnover growth with revenue increasing by 23,4% to R156,9 million (2015: R127,1 million).
Keith Vroon, Chief Executive Officer of Novus Holdings commented; “We are encouraged by the improvement our recently expanded labels division showed. The division achieved break-even in the past six months and is well positioned for increased turnover moving forward.”
While the Group’s tissue expansion project is on track with additional converting capacity successfully introduced, ongoing project expenses and the installation of the second tissue mill resulted in the incurrence of costs ahead of revenue contributions.
Continuing to receive increased focus, the Group’s Africa business achieved limited contribution during the reporting period.
Vroon added; “With challenging market conditions and currency volatility expected to continue, we are geared to chart our way forward as a robust business by capitalising on opportunities, focusing on our core strengths and actively building on our current diversified offerings.”
He concluded; “Our focus for the next six months is to continue our expansion and diversification strategy, through the completion of the tissue investment projects, maintaining the momentum on our labels turnover and leveraging print as our core asset. Operating results will be maximised through continuously achieving production efficiencies, effective procurement practices and a focus on aligning capacity with market demand.”