Novus flags higher earnings


Novus flags higher earnings


Published Date: 2019-06-05 | Source: Stephen Gunnion | Author: Stephen Gunnion

Novus flags higher earnings

The print and packaging group's 2018 results were affected by big impairments after Media24 renegotiated a printing contract.

Novus expects a strong rebound in full-year earnings after its 2018 results were affected by big impairments.

In a trading update, the print and packaging group said basic earnings per share (EPS) for the year to end-March would be at least 34c or 155% higher than the 22c it reported previously, while headline EPS would rise by at least 42c or 41% from the 102.9c it reported at the end of its 2018 financial year.

Last year, Media24 renegotiated a printing agreement on less favourable terms than before, resulting in less printing work and reduced prices. It also resulted in significant impairments to assets that were made in the prior year.

For the six months to end-September, Novus reported a 14.1% decline in print revenue and a 38% fall in operating profit due to the new contract, which affected its newspaper and magazine categories. Revenue from its books and directories category was also lower after it held over a portion of a workbook tender for the Department of Basic Education (DBE) for the second half of the year. Last year, it printed the full DBE volumes in the first half of the year.

Full-year revenue at its Packaging division is also likely to have been boosted by the acquisition of ITB Plastics, while its Tissue operation was close to break-even in September as the group took measures to reduce losses.

The group said it would release a further trading statement once it had more certainty on the precise earnings range for the year. Its results are due for release later this month.

Its shares closed 0.3% up at R3.88 yesterday.


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