The direct communications giant posted a 6.5% year-on-year fall in statutory profits to $22.7m off the back of a decrease in revenue of just 1.2%, to $447.6m for the six months to 31 December.
The company’s Business Process Outsourcing (BPO) division, which includes transactional printing and print on-demand for the likes of Telstra and ING, took the biggest hit, with a 10% fall in revenue from $180.9m to $162.9m.
However, earnings before interest, tax and amortisation (EBITA) at the BPO arm only fell 2.2%, from $22.4m to $21.9m. So margin actually increased, from 12.6% in H1 2010 to 13.5% in H1 2011.
Chief financial officer Chad Barton said this dip in BPO sales drove down overall revenues.
“Overall revenue was impacted by the BPO result, with normalised revenue down 8.7%,” he said.
“The drop in BPO revenue was mostly due to the flow-on effect from reduced volumes in the last half of 2010 and the ongoing shift to electronic presentment.”
Mail pack volumes fell 12.1% year-on-year from 620 million to 545 million packs.
Barton said he was confident Salmat was catering to the shift from paper-based communication to electronic methods among major customers
“The reasoning behind our decision to move into the digital arena becomes clear when you look at the volume growth in the remaining items,” he said.
“Interactive email showed strong growth of 108% due to new business wins and interactive SMS also grew by 2.5%.”
Salmat has made a major investment in its BPO division with the country’s first Océ Jetstream 2200 machines for Sydney and Melbourne.
Salmat chief executive Grant Harrod said this “refresh of the BPO’s colour business” is expected to contribute around $2.8m in annualised gross savings from the 2012 full year.
Salmat did see a strong improvement in goodwill related to the acquisitions of four subsidiaries of marketing group Photon for $75.3m in December.
Goodwill grew 20.8% from $365m in H1 2010 to $440.9m in 2011.
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