Novus rallies as it builds cash position


Novus rallies as it builds cash position


Published Date: 2021-05-11 | Source: Stephen Gunnion | Author: Stephen Gunnion

Novus rallies as it builds cash position

The print and packaging company says cash generation and careful cash preservation saw it end the year with more in the bank.

Novus rallied yesterday after it primed shareholders to expect a significantly smaller full-year loss and said it had generated a lot more cash. At their best, its shares traded 18% higher.

In a trading statement, the printing and packaging said its basic loss per share for the year to end-March was likely to be 89% and 97% smaller than last year's 119.6c loss. However, it would report a headline loss per share of between 4.45c and 9.14c, down from headline earnings of 23.43c per share last year.

Novus said its performance over the year was impacted by Covid-19 lockdown regulations and the resultant effect of the pandemic on the economy.

It consolidated the results from its Tissue division for the first half of the financial year as 51% of the business was disposed of last October, after which it was equity accounted for. A loss was recognised on the disposal. Its Print segment incurred costs of restructuring and accounted for impairments to plant and machinery associated with market declines and further rationalisation of its print facilities. However, it said these impairments were minimal in comparison to the property, plant and equipment impairments in March 2020. Cost reduction strategies had yielded some benefit in the year with overhead costs being well contained and expected to reduce further.

Novus said its proactive cash preservation strategy and continued strong cash generation saw it end the year with R443-million in the bank. This included a net reduction in working capital, the sale of some utilised assets in its Print segment and the initial proceeds of the Tissue disposal.

It expects to release its annual results on 9 June. Its shares closed 12.5% up at R1.80.


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