Key highlights:

• Revenue remains unchanged at R2,08 billion (2014: R2,07 billion)
• Improved gross profit margin of 31,4% (2014: 27,5%)
• Increased operating profit by 12,3% to R352,2 million (2014: R313,6 million)
• Strong cash position remains, free cash flow of R184,5 million generated (2014: R111,3 million)
• Increased headline earnings per share by 16,2% to 75,7 cents per share (2014: 65,1 cents per share)

Novus Holdings (NVS: SJ), the most comprehensive commercial printing and manufacturing operation in South Africa, today reported a solid set of interim results since listing on the JSE in March this year.

Formerly known as the Paarl Media Group, Novus Holdings’ revenue remained flat for the period at R2,08 billion compared to the first half of the previous year, whilst gross profit margin grew 3,9% mainly due to operational efficiencies. These included a focussed, worldwide raw material procurement programme, a beneficial productivity and efficiency initiative and a structured forward exchange programme.

Stephen Van der Walt, CEO of Novus Holdings commented, “Our revenue is generated through our diversified offering to a loyal and long-standing customer base that relies on our reliable and high-quality printing, manufacturing and distribution capabilities. Although top line growth was flat, we are encouraged by our operational efficiency initiatives and growth in new business areas. Our capital investment programme is on track to ensure that our network of plants continues to offer advanced technology and highly efficient, fully automated production processes outside the traditional print business and what’s being offered to our clients.”

“The market during the second half of the year will be challenging but we remain focused on our core strengths, new projects and diversified offering in the long-term to generate cash. We will continue to ensure our growth strategy leverages the opportunities across sub-Saharan Africa to unlock additional value,” concludes Van der Walt.

Operational developments

Novus Holdings currently operates 12 specialised printing plants and one tissue plant across South Africa.

The Group has installed a new packaging gravure press for the production of labels and wraparounds at their Cape Town facility. Imported from Italy, the new press came into operation in September and forms part of the Group’s diversification process in expanding its print on packaging capability, targeting the upper and top end food, beverage, cosmetics, and petrochemical markets.

Tissue demand is significantly increasing in sub-Saharan Africa and the delivery and installation of an additional tissue mill imported from Italy (acquired for R144 million) is currently underway and expected to yield benefits from early in the next financial year.

Print and manufacturing

The Group’s print division, which includes heatset, coldset and digital printing, experienced a marginal decline in revenue to R1,97 billion (2015: R2,0 billion) due to lower magazine volumes and paid for newspaper being under pressure, whereas demand for retail products has remained consistent.

On the manufacturing side, the Paarl Labels and Correll Tissue operations showed strong growth with revenue increasing by 63,9% to R127,1 million (2015: R77,5 million).