Financial Results Highlights for the Six Months Ended 30 September 2017:
- Headline earnings per share increased by 13,3% to 71,7 cents per share (2016: 63,3 cents per share)
- Revenue increased by 5,4% to R2,29 billion (2016: R2,18 billion)
- Improved gross profit margin of 28,7% (2016: 26,5%)
- Operating profit excluding impairments and profit/(loss) on disposal of assets increased by 9,2% to R332,1 million (2016: R304,1 million)
13 November 2017: Novus Holdings (JSE: NVS) announced a headline earnings increase of 13,3% to R229 million for the six months to September 2017.
The Western-Cape based commercial printing and manufacturing company increased revenue by 5,4% to R2,29 billion and improved its gross profit margin to 28,7%. The latter is attributed to increased print volumes, a favourable exchange rate and growth initiatives tracking well.
Novus welcomes new shareholders
The unbundling of Novus Holdings’ shares as a result of Media24’s divestment of the majority of its shareholding (66% to 19%) was completed on 26 September 2017. The unbundling has increased liquidity and free float from 25% in the previous period to 73%.
“Print revenue increased by 4,3% to R2,13 billion due to increased print volumes in the first six months of the year,” says Keith Vroon, Novus Holdings Group CEO. He added that other performance highlights in the last six months include the timing of the Department of Basic Education workbook tender and the increased uptake from key label clients in the carbonated soft drinks and alcoholic beverages industries, resulting in the growth of wrap-around and wet-glue labels. The business also experienced good growth in self-adhesive label volumes. Novus Holdings is in the process of consolidating its heatset and coldset print divisions, which will strengthen the business’s ability to respond to changing market dynamics going forward.
“The tissue business experienced a volume increase of 5,1%. Now that it is able to provide jumbo reels at full capacity, sales volumes are expected to increase as the business grows its market share. In alignment with the growth strategy, further investment in production capacity is envisioned for self-adhesive labels as demand exceeds existing capacity within the label division,” Vroon says.
Diversification strategy moves ahead
Going forward, it is anticipated that there will be continued pressure on overall print volumes. In addition, the Group is currently engaging with Media24 regarding their printing agreements due to the notice of termination, effective 31 March 2018. It is expected that the new terms of agreement will have a material impact on future results.
“Accordingly, the Group will intensify its focus on reducing cost structures and driving efficiencies in order to mitigate this financial impact. We continue to look to diversification as a key strategy and will consider targeted opportunities from within our existing portfolio and strategically aligned acquisitions,” concludes Vroon.
In line with this, the company completed the acquisition of ITB Manufacturing on 1 October 2017, which will see Novus Holdings expand into the flexible plastics and other packaging sectors. Solutions will be delivered for FMCG products, automated packaging films for dry goods (both food and non-food), industrial bulk packaging for polymers and chemicals, tamper-evident security bags, courier envelopes and general flexible plastic packaging.