Novus interim results September 2017
Revenue for the interim period increased to R2.3 billion (2016: R2.2 billion). Gross profit rose to R658.6 million (2016: R576.3 million). Operating profit grew to R338.5 million (2016: R304.4 million). Net profit for the period attributable to equity holders of the group was higher at R233.8 million (2016: R202.3 million). Furthermore, headline earnings per share increased to 71.71 cents per share (2016: 63.25 cents per share).
A dividend of R179 million (2017: R224 million) that relates to the period to 31 March 2017 was paid in September 2017.
The Group consolidated its heatset and coldset divisions in the first six months of the year. In the second half of the year, Novus Holdings will focus on streamlining and standardising processes across the two divisions. The consolidation of its heatset and coldset operations will strengthen the Group's ability to respond to changing market dynamics going forward.
For the second half of the year, both the timing of the DBE workbooks and continued volume declines will impact results negatively.
The Group is currently engaging with Media24 regarding the printing agreements due to the termination effective 31 March 2018. It is expected that the new terms will have a material impact on future results.
Looking beyond the current financial year, it is anticipated that there will be continued pressure on overall print volumes. This impact is exacerbated by an availability of excess print capacity in the market with competitors all vying for the same declining volumes. Accordingly, the Group will intensify its focus on reducing cost structures and driving efficiencies in order to mitigate the financial impact.
With the tissue operation able to provide jumbo reels at full capacity, sales volumes are expected to increase as the Group grows its market share.
The labels operation is well positioned to hone its efficiencies as the busy season sees an increase in volumes for both wet-glue and wrap-around labels. Further investment in production capacity is envisioned for self-adhesive labels as demand exceeds existing capacity.
Benefits of the ITB acquisition will accrue effective 1 October 2017. Novus Holdings looks forward to a positive contribution to the Group results from flexible plastic products.
The Africa business remains part of the Group's long-term diversification strategy - with a strong focus on securing recurring revenue streams in the future to mitigate the cyclicality of Africa projects.
Novus Holdings will continue to look for growth opportunities, both within its existing portfolio and from other targeted and strategically aligned acquisitions.
Shareholders are advised that Novus Holdings will host a live audio webcast at 10h00 (SA time) on 14 November 2017. The webcast can be accessed at www.corpcam.com/Novus14112017.htm. Once concluded, a recording of the webcast will be available on the Group's website at www.novus.holdings.
Changes to the company secretary
Shareholders are advised that Kilgetty Statutory Services (Pty) Ltd. has resigned as the company secretary of Novus Holdings effective 9 November 2017.
Ms Marlene McConnell has been appointed as the company secretary of Novus Holdings effective 9 November 2017.