STW announces full year 2013 result – 12.5% growth in net profit, strong second half result

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Screen Shot 2014-02-13 at 7.46.48 am.jpgSTW Communications Group Limited (“STW Group” ASX: SGN), Australasia’s leading marketing, content and communications group, today announced its financial results for the full year ended 31 December 2013.

Key features of the result include:

  • Revenue1 of $402.1 million, up 12.4% (31 December 2012: $357.8 million).
  • Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) 1of $87.6 million, up 10.5% (31 December 2012: $79.3 million).
  • Underlying Net Profit (“NPAT”) of $49.5 million, up 12.5% (31 December 2012: $44.0 million).
  • Underlying earnings per share of 12.3 cents, up 2.5% (31 December 2012: 12.0 cents).
  • Final dividend of 5.3 cents per share, fully franked. Total dividend for the year of 8.6 cents up 3.6% (2012: 8.3 cents per share, fully franked).

STW Group’s NPAT for the full year ended 31 December 2013 is comprised as follows:

Screen Shot 2014-02-13 at 7.44.22 am.jpg

Says Michael Connaghan, STW’s chief executive officer: “Our full year trading results are pleasing in the face of continued challenging economic conditions. We have delivered strong revenue and profit growth in the second half of the year, underpinned by organic market share gains. We have also made significant progress in accelerating our growth strategy for the future.

“Importantly, STW’s resilient and consistent growth performance highlights the benefits of the diversification and scale that underpins our business model. We have largely held margins while being able to invest significant funds into training, incubating new businesses and developing intellectual property.

“STW’s three pillared strategic growth focus remains firmly on track; we continue to drive growth out of our leadership positions in Australia and New Zealand; continue to ‘future proof’ our business by growing and leading in the evolving areas of our services, including digital and data; and are making very pleasing progress with the selective and careful export of our business into new markets in Asia and beyond.

“As clients diversify marketing and sales spend into a wider range of channels and disciplines, we need to continually push out our services to deliver to their fast-changing needs. Our investments in 2013, including an outstanding new partnership with leading insights business Colmar Brunton, our investment in data consulting specialist Beyond Analysis, in digital specialists Cru Digital, experiential market leader Maverick, and data driven CRM South East Asian leader CPR Vision, are great examples of STW’s capabilities going deeper and broader. We will continue on this path to ensure STW Group remains relevant and leading edge, irrespective of how quickly client marketing support needs change.”

2014 Outlook

Says Connaghan: “We start the year in great shape and with momentum on our side. STW anticipates mid-single digit growth in net profit after tax for the full year ended 31 December 2014, prior to any new acquisitions.”

Cash, Gross Debt & Facilities

As at 31 December 2013, STW’s cash and gross debt balances were $43.3 million (31 December 2012: $43.6 million) and $172.4 million (31 December 2012: $136.2 million) respectively.

Says Lukas Aviani STW’s chief financial officer: “Operating cash flow for the year was $35.4 million (31 December 2012: $52.6 million) and after completion payments for new acquisitions STW’s net drawn debt position increased to $172.8 million at 31 December 2013 (31 December 2012: $92.6 million). Despite the increase in net debt, STW’s balance sheet and capital position remains in good health.

“STW has access to debt facilities totaling $238 million (of which $172.8 million is drawn). These debt facilities expire in January 2015 ($75.0 million), July 2015 ($25 million), September 2015 ($25 million), August 2016 ($70 million) and August 2018 ($40 million).”

Dividend

The Directors of STW Communications Group declared a fully franked final dividend of 5.3 cents per share, bringing the total dividend for the year to 8.6 cents per share up 3.6% (2012: 8.3 cents per share).

The final dividend will be paid on 16 April 2014 to shareholders registered at 2 April 2014.

Results Presentation

The STW Group’s full year 2013 results presentation will take place at a public briefing at the Adelaide Room, Sofitel Wentworth Sydney, Level 4, 61-101 Phillip Street, Sydney on Wednesday 13th February 2014 at 9:00 am AEST. The presentation will also be broadcast live on Boardroom Radio.