Salmat back to profit

Salmat’s full year results see the company return back to profit, $4.2m, after 2016’s FY result of a $6m loss.

This was achieved despite a 3.4 per cent decrease in revenue, with Salmat making $435.3m worth of sales compared to $450.8m in 2016. Salmat notes that new business did not fully replace expired contracts, while product and services rationalisation accounted for more than $13.7m in discontinued revenue.

“While discretionary spend and volumes reduced in some markets, increased spend by existing clients boosted contact centre revenue in particular,” says Salmat.

Underlying EBITDA is $22.8m, up $3.2m from the prior corresponding period (pcp). Salmat says cost saving initiatives contributed $9.5m, while increased business from new and existing clients contributed $4.2m. EBIT for 2017 is $7.7m, an 83 per cent improvement from the pcp result of $4.2m.

Rebecca Lowde, CEO, Salmat says, “The return to full year profit is a significant milestone for Salmat. While revenue was down this year, we have been able to do more with that revenue, growing both earnings and net profit. We are also generating more cash from operations.

“These full year results are a testament to the work we have done to transform Salmat’s business operations, but we remain mindful of the ongoing challenges of the current economic landscape. We are setting plans in place to address these market challenges, innovate Salmat’s service capabilities and grow new business.”

The company has fewer significant items relating to restructuring costs, costing $0.6m to the bottom line compared to $6.8m in the pcp.

Salmat says the key items in 2017 were costs associated with restructuring and the strategic review undertaken in the second half, as well as an impairment cost associated with investment in a joint venture, offset by profit on the sale of shares in an investment and a fair value adjustment gain on financial liabilities.

The strategic review is still underway, with no new announcements from the company.

Net cash at June 2017 was $8.9m, down from $14.6m in the pcp. Net operating cash inflow for the year comes to $19.1m, up from $5.4m in 2016.

“The most significant outflow during the year was $30.9m in payments for acquisitions, including payments relating to the remaining 50 per cent of MicroSourcing and for Netstarter. A rights issue conducted during 1H17 generated net cash of $14.0 million to help fund the acquisition payments,” says Salmat.

Salmat’s board says it has elected not to pay a dividend for the period, and intends to recommence during FY2018.

 

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