Novus profits fall on weak rand, economy

Cape Town - Novus Holdings, formerly Paarl Media Group, posted a revenue increase of 4.5% in the six months ended September 30 2016, despite tough trading conditions. 

In a statement the group said its results were most notably shaped by “strained economic growth, coupled with a fluctuating and weakened exchange rate”. 

READ: Novus Holdings lists on JSE 

In the period under review, the group’s gross profit margin decreased by 4.9% from 31.4% in the previous year to 26.6% in 2016, while operating profit decreased by 13.6% to R304.4m (2015: R352.2m). 

Headline earnings per share dropped by 16.4% to 63.3c per share, compared to 75.5c per share in 2015. 

Novus ascribed the drop in its profit margin to the impact of foreign exchange and new projects that hasn’t yet achieved profitability. 

The print division saw marginal improvement in revenue – up from R1.97bn in 2015 to R2.04bn in 2016. 

READ: Novus Holdings snaps up digital printing business 

Novus chief executive Keith Vroon, said the group is encouraged by the improvement its recently expanded labels division has shown. “The division achieved break-even in the past six months and is well positioned for increased turnover moving forward.” 

Although Novus’ tissue expansion project is on track, ongoing project expenses, coupled with the installation of the second tissue mill, led to costs incurred ahead of revenue contributions. 

Vroon said Novus’ focus for the next six months will continue to be on expansion and diversification of operations. “Operating results will be maximised through production efficiencies, effective procurement practices and aligning capacity with market demand.”