IVE Group Reports 1.8% Revenue Decline, 3.0% Underlying NPAT Rise

Mixed Financial Performance Underpinned by Margin Expansion

IVE Group Limited (ASX:IGL) reported a slight dip in statutory revenue to AUD 941.8 million for FY26, down 1.8% from the previous year, largely driven by softness in catalogue and publication segments amid challenging economic conditions. However, underlying profit measures tell a more resilient story. Underlying net profit after tax (NPAT) on a pre-AASB 16 basis increased 3.0% to AUD 52.5 million, supported by a 4.3% lift in material gross profit margin to 51.4% and a 2.8% rise in EBIT.

Despite the headline IFRS NPAT falling 19.8% to AUD 37.4 million due to elevated restructuring costs linked to major site relocations, the group’s EBITDA margin expanded to 15.6% from 14.3%, reflecting improved operational efficiencies and cost discipline. Operating cash flow remained robust with a 93.6% conversion to EBITDA, underscoring the business’s strong cash-generating capability.

Strategic Acquisitions and Operational Footprint Expansion

IVE continued executing its ‘Now to 2030’ growth strategy by completing three acquisitions: Budget Mail Services, Impressu Print Group, and Daily Press. These deals enhance the group’s creative, content, and print capabilities and are expected to contribute more materially to revenue in FY27 and beyond. Impressu’s acquisition was complemented by a six-year marketing services agreement with Domino’s Pizza Enterprises, securing a significant client relationship.

On the operational front, IVE expanded its third-party logistics (3PL) capacity with the early completion of a 33,000m2 facility in Dandenong South, Melbourne, which is already operating at 85% capacity following new client wins. The group also consolidated five business units into a new 42,000m2 supersite in Kemps Creek, Sydney, which became fully operational in the final quarter of FY26. This supersite is expected to deliver rental cost savings of AUD 3.1 million per annum and operational efficiencies that will benefit earnings in FY27.

Lasoo Platform and AI Commercialization Drive Digital Growth

IVE’s proprietary e-commerce platform, Lasoo, sustained strong momentum with a 42% increase in gross transaction value to AUD 25 million and a 47% rise in unique monthly users to over 5.2 million. The platform remains on track to break even by FY28, with FY27 losses expected to reduce to around AUD 3.2 million post-tax.

The group is also advancing AI commercialization, integrating proprietary and partner technologies to enhance client solutions and operational productivity. AI-driven tools such as the Indy platform support rapid, consistent creative asset generation, while AI-certified workforce training is underway to embed these capabilities across divisions.

Enhanced Climate Disclosures Align with Emerging Regulatory Standards

IVE released its inaugural climate report prepared under the Australian Sustainability Reporting Standard AASB S2, providing detailed governance, risk management, and scenario analysis related to climate risks and opportunities. The group identified physical risks such as acute weather events and transition risks including carbon pricing impacts, but concluded no material financial effects are expected in the near term due to diversified operations, supply chain resilience, and existing mitigation measures.

Operational energy efficiency remains a focus, with investments in energy-efficient equipment and a renewable electricity power purchase agreement covering 98% of major production sites. While no explicit climate-related capital deployment was recorded in FY26, the group anticipates integrating climate considerations into capital allocation and investment decisions in future periods.

Board Renewal and Executive Remuneration Updates

The Board announced a planned orderly succession with four directors scheduled to retire over the next two years, including long-serving director Paul Selig. Mark Bayliss joined the Board in March 2026 and will assume chairmanship of the Nomination & Remuneration Committee in September 2026.

Responding to shareholder feedback, the executive remuneration framework for FY27 introduces return on invested capital (ROIC) alongside total shareholder return and earnings per share as performance measures for long-term incentives. Short-term incentives will focus on underlying pre-AASB 16 NPAT and strategic initiatives, dropping EBITDA as a target metric.

Outlook and Dividend Policy

IVE expects underlying NPAT on a pre-AASB 16 basis to be broadly stable in FY27, with IFRS NPAT forecast to increase materially due to significantly reduced non-operating items. The group plans to reduce capital expenditure to around AUD 26 million, following elevated investment in packaging capacity and supersite fit-outs in FY26. Net debt is targeted to remain below 1.5x pre-AASB 16 EBITDA.

The Board declared a fully franked final dividend of 9.0 cents per share, up 5.8% on the prior year, resulting in a full-year dividend of 18.5 cents per share. The dividend payout ratio is expected to return to a range of 55% to 65% of underlying pre-AASB 16 earnings in FY27, balancing capital management with reinvestment needs.