One of Australia’s largest diversified printing, marketing and distribution businesses, IVE Group, says Coles’ decision to no longer print its weekly catalogue in high volumes and have it distributed to Australian letterboxes will hit revenues by $35 million to $40 million this year.

IVE Group executive chairman Geoff Selig released a statement to the Australian Securities Exchange on Tuesday, following the announcement by Coles that it would drop its catalogue letterbox delivery strategy for an enhanced digital experience for customers.

IVE Group prints approximately seven million weekly catalogues for Coles via a distribution network of approximately 14,000 walkers nationally. It will continue to print the monthly Coles in-store magazine and will increase its in-store catalogue availability.

In January 2020, IVE Group purchased the distribution arm of Salmat for $25 million. This included the Salmat Marketing Solutions and Reach Media NZ Limited businesses. The parent company of Salmat is also now in voluntary administration after shedding other business units this year.

In the note to the ASX, Selig said IVE will evaluate the full impact of the reduction in revenue, including the potential for any goodwill impairment.

IVE Group is due to report its full year 2020 results on August 25. In 2019 the company reported a strong full year result with revenue up 4.1 per cent to $742.m.

Selig says the business moved early when COVID-19 first hit and is in a strong position to mitigate any revenue losses due to the Coles announcement.

“The group remains committed to supporting the continued strength of the printed catalogue as an important component of an integrated communications mix to a diverse national consumer base,” Selig said in the statement to the ASX.

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