Johannesburg - Novus Holdings, the commercial printing and manufacturing group, yesterday reported an increase in earnings, despite a decline in its printing revenue and the effects of a weak rand.
Novus, formerly Paarl Media Group and part of Naspers’ stable, listed on the JSE in March last year.
Headline earnings a share increased by 9.6 percent to 139.9 cents a share for the year to end March. It declared a dividend of 70c a share, up by 9.38 percent from last year. The group said the dividend was from distributable reserves and it would be paid in cash.
“We achieved significant cost savings primarily through lower waste, higher productivity and proactive maintenance plans,” said acting chief executive Keith Vroon, who was appointed in March after Stephen van der Walt resigned as chief executive in February.
Management was proactive with regard to the fluctuating exchange rate, which resulted in optimised margins, he said.
Operating margin
Novus increased its operating margin, excluding impairments and profit/loss on disposal of fixed assets of 15.6 percent against 14.9 percent. Operating profit, excluding impairments and profit/loss on disposal of fixed assets, rose 2.5 percent to R650.7 million. Revenue was down at R4.17 billion from R4.26bn last year.
The group said it had shown resilience in a tough economy.
Vroon said that despite low economic growth and suppressed consumer confidence affecting publication print volumes, the profitability of the group’s core business remained solid.
The print division’s revenue declined from R4.04bn to R3.91bn due to volume pressure on newspapers and magazines. The foreign paper pricing adjustments and continued efficiency and productivity programmes helped to maintain profitability as the gross profit margin rose from 32 percent to 35 percent.
Retail inserts and catalogues remained the highest contributor to revenue at 29 percent, followed by newspapers with 21.9 percent, books and directories contributed 20.7 percent, magazines 20.6 percent and security print products added 1.7 percent.
Revenue derived from Africa sales increased from R91.7m to R149.1m. The revenue for the labels and tissue divisions rose to R256m up from R218m.
In May last year, Novus said it had acquired Digital Print Solutions. Novus said it expected the deal to be finalised by the middle of this year.
Vroon said while the challenging market conditions and currency volatility was expected to continue, he noted that the consolidation of existing assets and enhanced production efficiencies in the manufacturing environment had positioned the group for future growth in its diversified segments.
The share price closed unchanged at R11.50 yesterday.
BUSINESS REPORT