Active owner’s share price plummets

The share price of Active Display parent company STW has crashed 23 per cent in one day after profit fell 7.8 per cent in 2014, despite Active turning a healthy profit.

Australia’s biggest retail printer made a $4m profit on $43.3m revenue for the six months since media agency STW acquired it on July 1 last year, which was ‘in line with expectations’.

STW revenue was up 10.1 per cent, but this was almost entirely due to the Active Display takeover, with organic revenue down 0.6 per cent and EBITDA down five per cent.

Active Display also had lower margins that the rest of the business, moving the group’s overall margin down one per cent.

According to the annual report, STW paid $29.7m up front and $4.6m in deferred payments for the acquisition, and will pay an unspecified capped amount for achieving performance measures.

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STW chief executive Michael Connaghan calls the acquisition ‘very significant’ as it is heavily vested in the shopper and retail activation space.

“It was a big deal for us, one which we have been very pleased with to date. ADG provides us with a business of scale that enables us to offer additional solutions to clients in both print and digital display,” he says.

Active Display managing director David Gittus says the integration with STW is going as well as expected and the company is getting good traction in getting business from the rest of STW.

On the eve of last year’s acquisition, Gittus said the deal meant huge growth potential as his company would have access to agency clients – a market it had ‘never really cracked before’.

“We are on track getting into the areas we want, getting access to clients and agencies to provide our services, and are working with their agencies on joint pitches and packages to give more value to clients,” he tells ProPrint today.

“STW are ahead of the marketing curve and reacting well to changes in the market, but it takes a while to reposition a big business completely.”

STW blamed its poor results on losing significant agency business in the first half and not winning enough new business in the second half to make up for it.

The media agency lost Myer, Panasonic, Coca Cola, Diageo, Vodafone, and St George Bank, and also had weaker than expected demand in the final quarter with December sales particularly bad.

Its share price fell from $1.025 to 79c on Friday following the annual report announcement.

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