PR Returns Enero To Profit

Australian publicly listed communications company Enero has returned to profit for the financial year ended 30 June 2016 on the back of continued strong performance from its PR companies HotWire and Frank PR.

The group reported net revenue of $113.5 million for the year up from $110.3 for the previous corresponding period. Profit made a welcome return with the group reporting a net profit after tax of $6.6 million, compared to a $2.8 million loss for the prior year.

“The UK has been a terrific arm to our business for the past few years. When you look to where this year ends, I guess there’s a tiny bit of Brexit touching it,” Enero CEO Matt Melhuish said.

The Pound has dropped 17% since Brexit so the group will need to make up that amount of money from its UK operations to stand still in 2017. UK business confidence has also taken a hit from the UK’s shock decision to exit the EU so Melhuish says he anticipates a more challenging year for the group’s UK operations.

However PR has been a boon for the group without question and its Hotwire business, which operates predominantly in tech PR, is leading the charge.

“The whole remit for what PR could be is much broader than what PR was. There’s the whole content creation thing and being in tech is a good place to be and being in PR is a good place to be,” he said.

Operating in three markets, UK/Europe, the US and Australia, Melhuish said that he would like to see more scale in the US.

“The US is still a business we’d like to see bigger than it is . . . it does sometimes feel like it’s not been as smooth a journey as it could have been . . . god only knows what’s going to happen with the US Presidential elections.”

Melhuish said its been a bit of mixed bag in Australia, but BMF is in good shape. “If we had a BMF in London or a BMF in New York it would be great,” he said.

From an evolution point of view, Melhuish says the company remains solidly inside its “reliable” phase, but is “working behind the scenes of its re-imagined phase”.

Following its emergence from the wreckage of the ill-fated Photon Group, Enero set itself the Rs for recovery: remedial, reliable and re-imagined. The group’s ability track to that plan is perhaps remarkable?

Part of the group’s move to a re-imagined business is its planned move into a state-of-the-art building at 100 Harris St Sydney in January 2017 for all of its Australian businesses.

Here’s yesterday’s announcement:

Results for year ended 30 June 2016

Enero Group Limited (ASX: EGG) today announced its results for the year ended 30 June 2016.

Summary:

Net Revenue up 3% and Operating EBITDA up 44% on prior period.
Improved Operating EBITDA margin to 11.6%.
Net profit after tax to equity holders $6.6m.

Improvement in earnings highlights more consistent business performance in line with “Reliable” phase of Group strategy.

Enero Group CEO, Matthew Melhuish said: “We have delivered revenue, Operating EBITDA and margin growth this year, which is a result of the focus around new business conversion and sensibly managing our cost base.

“Despite more uncertainty in trading conditions, our bigger businesses continue to lead the way for the Group and our international market exposure in the UK, Europe and USA provides more diverse revenue opportunities. Our focus for the coming year will be maintaining our margin, our new Sydney hub office and USA expansion.”

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