IVE Group (IGL) lose on Coles catalogues
Ive Group (IGL) -21.88%
The hits keep coming for IVE Group with Coles scaling back the use of weekly catalogues. This is an obvious negative to IGL and when viewed against high leverage and an uncertain operating environment it’s a hard one to stomach. Coles today said that from September 2020 they will cease distribution of weekly catalogues - these catalogues were distributed to 7m households. While they’ll increase in store magazines the hit to IGL is around ~$35-$40m which is ~5-6% of current revenues.
They report on 25th August and will provide an update on the full impact then. A slight positive is the company saying that it moved quickly and sees the company in a position to mitigate revenue declines, however that’s a bit of a stretch. Overall, the announcement light on detail, particularly given this contract underpinned further capital expenditure on new assets plus this contract helped to underpin the investment thesis for buying Salmat.
Ive Group (IGL) Chart
