Salmat posts glowing earnings despite small revenue slide

The Targeted Media Solution (TMS) arm has reported a 40.5% uplift in earnings before interest, tax and amortisation (EBITA) despite only growing sales revenue by 0.4%.

The division incorporates letterbox delivery, mobile and interactive voice response, dynamic campaign and the pre-shop search engine Lasoo. It posted sales of $118.7m, up year on year from $118.3m.

However, it was the division’s new media products and services that contributed to the boost thanks to “strong support” from customers, while letterbox volumes were flat. However, its letterbox distribution joint venture in New Zealand “continued to grow”.

EBITA at the TMS arm surged year-on-year from $14.7m to $20.7m for the six months to 31 December 2009.

Chief executive Grant Harrod (pictured) said: “EBITA before significant items increased 40.5% following a move away from low-margin work, strong contribution from our interactive and digital areas and a major focus to improve operating efficiencies.”

In respect to the group’s overall results, Harrod added: “Pleasingly, EBITA before significant items was up 16.6% on the prior corresponding period to $45.4m.”

“Net profit after tax but before significant items was up 48.5%. Net profit after tax and after significant items was up 21.9%,” he said.

Total revenue for the group was $453m, down 0.4% year-on-year from $454.6m

Another bright spot came from its business process outsourcing (BPO) arm, which incorporates its print on demand unit. EBITA was up 8.9% to $22.4m, despite a sales decline of 5.1% to $180.9m

Chief financial officer Chad Barton explained that the overall EBITA rise of 16.6% was thanks to the strong margin improvements in TMS and BPO.

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