IVE Group (ASX:IGL) FY19 results & outlook


by Anna Napoli

IVE Group Limited (ASX:IGL) Executive Chairman, Geoff Selig talks about FY19 results, trends strategy and FY20 outlook.

Anna Napoli: Welcome to the Finance News Network. I'm Anna Napoli and joining me now from IVE Group (ASX:IGL) is Executive Chairman, Geoff Selig. Geoff, welcome to FNN.

Geoff Selig: Thanks, Anna. Nice to be here.

Anna Napoli: First up, can you start with an introduction to the company?

Geoff Selig: The company was started by my grandfather in 1921, a printing business, but it's really been the last 20 years that the business began its journey of evolution and diversification. We listed just four years ago, December 2015, so today we have 1,800 staff and are the largest diversified marketing communications business in the country.

Anna Napoli: Thanks, Geoff. Now to your FY19 results, what were some of the highlights?

Geoff Selig: The opening of a $53 million facility in Sydney for one part of our business, so it's quite a significant investment. In terms of the financial highlights, revenue up, EBITDA up about 9.8 per cent. Net profit after tax up, and an increase in the dividend per share as well. So all in all, a solid result for the year.

Anna Napoli: Could you tell us about the business divisions and how they operate to deliver for clients?

Geoff Selig: Sure. Look, the first point to make would be that 75 per cent of all of our revenue comes from clients dealing with multiple parts of our business. So what that says to us is that the offer, or the product and service offering we take to market is very well-aligned to our client's requirements in the marketing communication space. So there's four parts of our business as we describe it, creative services, data-driven communications or personalised communications, production and distribution, and then integrated marketing, where for larger customers, we embed our staff on-site to manage the total category spend of Marcoms within that organisation. That's how we would think of the four parts of their business, and they work closely together because most customers require multiple products or services from our business, or see value in multiple products and services that our business offers.

Anna Napoli: And Geoff, a more general question now, how's the growth in online shopping affecting marketing in comms?

Geoff Selig: Yeah, it's a good question. Well, we play heavily in the retail space, so online shopping is a good example of digital disruption over the last 20 years that we've experienced in our business, and it puts our business today, given we operate across multiple channels printed through to email or social media channels, it puts us in a strong position to support retailers, encouraging customers to enter the online world. Equally, six months ago as a business, we launched an eCommerce platform called Nexus, which for our customers, whether they are retail marketers, or travel and tourism, corporate customers, basically takes what is in a printed version and turns that into any electronic eCommerce, shoppable experience for consumers, or for customers. So for us, the move to online environment is not a negative, it's well supported because we have multiple channels.

Anna Napoli: Last question now, Geoff, where would you like to see the business in 12 months from now?

Geoff Selig: Yes, look, we've moved from a phase of investment and significant growth over the last four years, as I said before, to a period now with lower cap peaks, no more acquisitions to pay for. This for us, is a world where we will generate with the continued solid performance of the business, a lot of surplus cash over and above the current dividend strain, which has been very, very generous, just under 8 per cent dividend yield. Since we listed fully franked dividend, we move into a world of surplus cash and that gives us even more flexibility as a business. So I think where we envisage the company in 12 months, not materially different from a value proposition, products, or service perspective, but certainly we're moving into a world of a stronger cash flows or free cash flows, again, that can be returned to shareholders.

Anna Napoli: Geoff Selig, thank you for the update.

Geoff Selig: Thanks, Anna. Thanks for having me.


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