Ovato's statutory profit for the half-year ended 31 December 2021 was $17.6m, up $27.3m compared to the prior year. Sales of $161.4m were down $75.2m pcp [or 31.8%] - with $55.3m of the reduction due to the sale of its marketing services and magazine distribution businesses and the closure of its letterbox distribution unit in Australia.
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| "Adversely impacted by the COVID-19 pandemic": Michael Hannan, Ovato |
“When the impact on revenue of those discontinued businesses is excluded, sales were down $19.9m pcp [or 11.6%] as the business continued to be adversely impacted by the COVID-19 pandemic, continuity of supply with retail customers adversely influencing future advertising decisions and some customer losses,” said Ovato chairman Michael Hannan.
There were no dividends paid, recommended or declared during the current financial period.
“Other Revenue at $56.0m down $3.8m pcp [or 6.3%] mainly due to the $47.2m profit on sale of the marketing services and magazine distribution businesses, $4.8m recognition of sublease revenue, $0.7m government subsidies NZ and $1.1m other revenue,” Ovato told the ASX.
“The prior year included $37.7m scheme of arrangement and $19.9m government subsidies.
“Expenses at $185.0m down $115.4m pcp [or 38.4%], with $51.5m due to discontinued businesses and a $31.8m reduction in significant items ($19.3m impairment of assets & inventory, $8.6m professional and legal fees and $3.9m restructuring costs).
“When the impact of discontinued businesses and significant items is removed, EBITDA is down $10.2m pcp due to the discontinuance of government subsidies from the prior year offset by an improved operating result where the reduction in sales volume was more than offset by cost savings.”
Statutory Profit was $17.6m up $27.3m versus the prior year.
Statutory cashflow from operations was negative $23.2m, which is $27.5m worse pcp, “mainly due to the discontinuance of government subsidies, payment of deferred payables, partially offset by trading results (mainly cost savings).”
In June 2021, Ovato announced it was selling off its Retail Distribution and Marketing Services businesses to “bring its focus back on print.”
