Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

Business outlook for Ovato (Gotch)

Mark Fletcher
May 21st, 2019 · 2 Comments

Click here to access an investor presentation fro Ovato, released yesterday. Ovato shares were halted from trading pending the announcement of a share entitlement offer.

As you can see from the half year report and their share price over the last year, it has been a tough time:

Here is a page from the investor presentation that may interest newsagents – not the magazine forecast:

With magazine sales declining, cover prices at five (and more) year ago prices and with GP fixed at 25%, this category is problematic for newsagents.

No wonder….

5 likes

Category: magazine distribution · newsagency of the future

2 responses so far ↓

  • 1 Colin // May 21, 2019 at 8:38 AM

    “Disciplined capital allocation” says it all.

    Needs to invest to survive but can no longer borrow and losses look like continuing until 2021, so investment has been slashed.

    GG not mentioned. The only saving grace is that Ovato needs retail distribution to survive even though it generates an inadequate return for both Ovato and the retailer.

    Hopefully the publishers are watching and are forewarned.

    1 likes

  • 2 Paul S // May 24, 2019 at 9:05 AM

    A “stabilised” 10% P.A. drop in magazine publishing volumes.
    Even at that rate magazines will be pretty well irrelevant in another year. Good luck if you still rely on them for a major part of your business revenue.

    0 likes

Leave a Reply

Your email address will not be published. Required fields are marked *

Reload Image