Overview of IVE Group's Financial Results

IVE Group Limited (ASX: $IGL) has announced its financial results for the six months to 31 December 2023. The group delivered a solid first half performance with revenue, EBITDA, and margins up on a strong prior corresponding period. Normalized for the Warwick Farm loss, NPAT was $26.6m, up 9.4% on pcp, and EPS was 17.3cps, up 5.1% on pcp. The cornerstone acquisition of JacPak has contributed to the growth, and Lasoo continues to show strong momentum.

Executive Commentary on FY24 H1 Performance

Given the more uncertain economic landscape, I am pleased with the first half result which was up relative to a record prior period that was partly buoyed by the post Covid-19 recovery. Importantly, during the half we also completed the Ovato integration six months ahead of the original timetable and entered the Australian fibre-based packaging sector through the cornerstone acquisition of JacPak.

Summary of FY24 Outlook and Guidance

IVE Group reaffirms the FY24 underlying earnings guidance range and expects the FY24 impact of the JacPak acquisition to be incorporated in the updated guidance. The group anticipates unlocking annual cost synergies of around $2.4m across procurement, operational efficiencies, finance, and administration from JacPak. Lasoo is expected to report an after-tax loss of $3.9m, reflecting an expected 20% improvement in EBITDA. The net debt at 30 June 2024 is expected to be around 1.5x pre-AASB 16 EBITDA, consistent with the Group's agreed internal benchmark and broadly unchanged from 30 June 2023. The dividend policy remains unchanged, targeting a full year payout ratio of 65-75% of underlying NPAT.