DURBAN – Novus Holdings said on Thursday that its profits slid by more than 83 percent for the six months to end September, hurt by the reduced demand across all product categories as a result of the Covid-19 outbreak.
Its headline earnings per share fell by 83.8 percent to 4.8 cents a share.
The group services the country and customers across the African continent through its print production magazines, retail inserts, catalogues, books, newspapers and commercial work as well as producing educational materials for governments and multinational publishers.
Novus said its performance has been severely impacted by the effect of the Covid-19 lockdown and the pandemic’s effect on the economy.
“The publishing sector was worst hit, with key customers announcing several title closures and reduction in volumes and pagination. All the group’s divisions stringently adhered to the lockdown regulations and measures, with all operations only allowing for production of essential goods and aligned operational capacities accordingly with the reduced demand,” the group said.
Novus was also impacted by the ban of the alcoholic beverages, which had a negative effect on its Labels Gravure division, with production only normalising in the second quarter.
“The already contracting print industry, together with shifts in advertising spend, further exacerbated the print segment’s performance,” it added.
As a result, the group’s revenue declined by 31.6 percent to R1.52 billion and operating profit declined by 106.3 percent to an operating loss of R9.2 million compared to an operating profit of R146.1m reported a year earlier.
Novus said while the performance had been bleak, the first half of the year once again saw the recognition of the majority of contractual print work for the department of basic education, with the second half expecting to show a smaller portion of this work.
The Covid-19 has necessitated the group to right-size its print operations, reduce overhead costs and improve operational efficiencies.
The group was forced to retrench some workers at a cost of R6.3m during the period as a result of a poor outlook on the print industry.
Novus shares closed unchanged at R0.93 on the JSE on Thursday.
BUSINESS REPORT