Opus Group will no longer sell its outdoor media division to raise capital and will instead approach the market for more funds.
Opus revealed in May that it was considering selling Cactus Imaging and Omnigraphics, but the group announced yesterday that the sales process had been postponed indefinitely.
Chief executive Cliff Brigstocke told ProPrint that the capital raising would allow Opus to retain its outdoor division as "an integral part of the overall business and product offering".
"With trading conditions improving, particularly in our government division, and strong growth in the outdoor segment plus good onshoring of work for the publishing division combined with much improved investor sentiments, we believe retaining our out-of-home division as part of the planned capital raise will not only add scale but will continue to be value accretive," he said.
[Get news first. Sign up for free news bulletins]
"Opus Group explored the market [during the sales process] and as expected received very positive interest.
"The offers received were not aligned to the strong performance of the division now in both Australia and New Zealand, especially given a number of strategic wins and our recent investments in new technology."
Opus is in the process of reducing its debt levels in close consultation with its senior lender, the Commonwealth Bank, and has paid off $11.2 million of debt since March 2012. The bank appears to have had a change of heart about Opus' strategy, because a debt deal the two parties signed last month required Opus to sell its outdoor division.
Yesterday's announcement also revealed that Opus would make "specific investment in our outdoor media division that will see an expanded product range".
Brigstocke told ProPrint that it was too early to elaborate on the new investments and products.
[Profile: Cactus founder Keith Ferrel]
"Given we have just been through a potential sale, we are not at liberty to say, suffice that Opus and our senior financier has approved and supports significant capex that will enhance our performance and open new markets," he said.
Brigstocke added that details would be provided "in conjunction with the capital raising program".
Chairman William Mackarell said in yesterday's statement that Opus had ended 2012-13 in a better position than it started the financial year.
He also said the debt deal had given Opus the "flexibility and sustainability" to support the group's ongoing restructuring.
"Accordingly, we believe it is now an opportune time to go to market and explore the potential for raising capital to address our medium- to long-term capital needs and growth plans," said Mackarell.
Opus forecast that it would turn over $120-125 million in 2013-14, which would be an increase on the previous year's pro forma figure of $116.8 million.
It also forecast underlying earnings before interest, taxes, depreciation and amortisation of $14.5-15 million, compared to the $14.1 million posted in 2012-13.
Brigstocke said: "We continue to win significant work reflecting our investment strategy in technology coupled with our Asia-Pacific network.
"We have increased resources in this area and expect continued success as our multi-platform content distribution channels are adopted by our key customers."
[Related: Ups and downs of Opus]
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.
Sign up to the Sprinter newsletter