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2023 ReportPeers and competitors of IVE Group:
EbiquityIVE Group Limited
A N N U A L R E P O R T 2 0 2 2
Founded in 1921, IVE is Australia’s leading holistic marketing
company. With an unmatched breadth and depth of offering,
we guide our clients from idea to execution.
Our landscape is constantly evolving and as marketing natives
so are we. We are forever seeking new ways to navigate the
marketing maze to connect our clients with customers, wherever
and whenever.
Specialising in creative, data-driven communications (DDC),
integrated marketing, production and distribution, we bring
together the capabilities, specialists and technology needed to
make customer connection seamless.
ASX : IGL
IVE Group’s 2022 AGM will be held on
Tuesday, 22 November 2022 commencing
10:00am (Sydney time) at the offices of
KPMG, Level 38 Tower 3, International
Tower Sydney, 300 Barangaroo Avenue,
Barangaroo, Sydney NSW
Registered office
IVE Group Limited
Level 3, 35 Clarence Street
Sydney NSW 2000
Telephone: +61 2 8020 4400
ABN 62 606 252 644
20
22
Contents
By forever seeking new ways to simplify,
integrate, and amplify their marketing activity,
we take our clients, their businesses and their
customers, further.
2
IVE Group Limited Financial performance
Key business highlights
Chair’s review
CEO’s review
Board of Directors
Operating and financial review
Our vision, purpose and values
Our integrated service offering
Our clients
Strategy and growth
Lasoo
Year in review
Review of financial performance
Environmental, social and corporate governance
Directors’ report
Remuneration report
Financial report
Consolidated financial statements
Notes to the consolidated financial statements
Directors’ declaration
Independent auditor’s report
ASX additional information
Corporate governance statement
4
5
8
10
12
14
15
16
17
18
22
26
30
37
44
52
70
72
77
119
121
126
128
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22
3
Annual Report 2022 Financial performance
REVENUE
EBITDA
$759.0m
↑15.6% on PCP
$96.6m
↑13.3% on PCP
OPERATING CASH
CONVERSION TO
EBITDA OF
95%
NET DEBT
$76.8m
CASH ON HAND
$67.0m
NPAT
$33.1m
↑66.1% on PCP
GROSS PROFIT
MARGIN
46.6%
48.1% PCP
EARNINGS
PER SHARE
23.1c
↑71.1% on PCP
FINAL DIVIDEND
8.0c
PER SHARE
FULLY FRANKED
— The underlying financial results are on a non-IFRS basis and are not audited or reviewed
— The underlying financial results are on a continuing operations basis, post AASB 16 and exclude
non-operating items (see reconciliation page 32)
— Underlying FY21 results exclude net JobKeeper receipts
44
IVE Group Limited Key business highlights
Strong operating performance and
shareholder returns
> Delivered on earnings guidance of $33.1m NPAT
(up 66% on PCP)
> Earnings uplift driven by a 16% ($102.5m)
increase in revenue over PCP, and leveraging the
recalibrated cost base
> Earnings per share (EPS) of 23.1 cents (up 71%
from 13.5 cents PCP)
> Final dividend declared of 8 cents per share
(CPS) taking full year dividend to 16.5 CPS fully
franked
> Return on funds employed (ROFE) improved to
21% from 14% PCP
Strategic initiatives
Active Display Group (ADG) and AFI Branding
Solutions (AFI) acquisition and integration
> The acquisition of ADG and AFI completed
on 1 November 2021, for potential total
consideration of $6.3m. Consideration of $4.6m
was paid on completion, with the remainder
payable as deferred consideration subject to
the achievement of agreed revenue targets over
a 24-month period
> Post the full integration of both ADG and AFI
into IVE’s existing operations, the acquisitions
are expected to contribute annual revenues of
circa $45m, additional EBITDA of $6.5m and
NPAT of $4m
> The integration of both businesses (5 sites) will
be completed by 30 September 2022
> These acquisitions significantly expand our
third party logistics (3PL) and retail display
businesses as well as further diversifying our
offering into events and exhibitions
5
Annual Report 2022 Balance sheet further
strengthened
The Group’s balance sheet has strengthened
significantly over the last two years on the back
of continued strong cash flow:
> Net debt at 30 June 2022 was $76.8m, down
$60.3m from $137.1m at 30 June 2020
> Cash at bank at 30 June 2022 was $67m, after
repaying $35m of senior debt since August 2021
> Net debt of 1.1x (pre AASB 16) EBITDA is well
below the Company’s stated target of 1.5x
> Undrawn facilities were $55m at 25 August 2022
> The strength of our balance sheet places IVE
in a very good position to invest in a range of
organic initiatives, together with a combination
of opportunistic ‘bolt-on’ acquisitions, or more
strategic acquisitions to further broaden and
diversify the Group’s revenue and earnings
Victorian site consolidation
Over the last two years we have invested
significantly in our Victorian site consolidation
program. This will result in IVE operating from two
precincts in Melbourne, driving further efficiencies
and enhanced client service:
> Our Sunshine facility (totalling 52,000 sqm
across three co-located buildings) is the base
for our Victorian web offset printing operations
and letterbox distribution hub
> The new Braeside precinct (also totalling
52,000 sqm across four co-located buildings)
is the base for our other Victorian operations
spanning sheetfed & digital printing,
data-driven communications, retail display,
premiums & merchandising and fulfilment
& logistics
> Integration of both the ADG and AFI businesses
into the Braeside precinct is nearing completion
Supply chain
Global supply chain disruption for both raw
materials and finished goods required close
attention throughout the year:
> Our strategic decision to increase inventory
holdings places us in a strong competitive
position to respond to client demands
> During the year we benefited from clients
moving revenue onshore from Asia, particularly
across the retail display sector
> The Company remains well placed to manage
this dynamic which is expected to continue for
the foreseeable future
6
IVE Group Limited 7
Annual Report 2022 Chair’s review
We are very pleased with the strong performance
of the business over the last 12 months. The
Company performed very well throughout
the COVID-19 pandemic and the significant
improvement in financial performance over the
prior year illustrates our capacity to deliver
a healthy return to shareholders on the back
of a meaningful uplift in revenue. The solid
foundations of the business established over
the last 101 years underpin the operational and
financial consistency and resilience the Company
continues to demonstrate.
On the back of a pleasing 16% uplift in revenue,
the Group reported EBITDA of $96.6m, which
contributed to NPAT of $33.1m, up 66% over the
previous year. Enhanced by the share buyback
completed earlier this year, EPS increased 71%
to 23.1 cents enabling the Company to pay a full
year dividend of 16.5 CPS fully franked, up 18%
over 2021. The current year payout ratio of 71%
is consistent with the Company’s unchanged
dividend policy targeting a full year payout ratio
of 65-75% of underlying NPAT. Since listing on the
ASX in December 2015, the Company has paid a
total of $115m in fully franked dividends.
Importantly, our balance sheet strengthened
further over the period with net debt of
$76.8m at 30 June 2022 equating to only 1.1x
(pre AASB 16) EBITDA, well below our stated
target of 1.5x. It is worth noting that the net debt
position also reflects a meaningful short-to-
8
medium term increase in working capital (circa
$30m of additional inventory) as a result of the
Company’s prudent decision to increase paper
holdings in response to supply chain volatility and
to ensure continuity of service for our clients.
The Company completed the acquisition of
Active Display Group (ADG) and AFI Branding
Solutions (AFI) on 1 November 2022 for
consideration of $6.3m. Following the completion
of the integration of ADG and AFI into IVE’s
existing operations at the end of November
2022, the acquisitions are expected to contribute
annual revenues of circa $45m, additional EBITDA
of $6.5m and NPAT of $4m. These acquisitions
significantly expand our third party logistics (3PL)
capability and further diversify our offering in the
events and exhibition sector.
On 14 September 2022 (following ACCC
clearance on 30 August 2022), the Group
completed the highly accretive and strategically
attractive acquisition of substantially all of
the printing and finishing assets of Ovato, IVE’s
largest print competitor. The net purchase
consideration (including transaction costs) of
$16m was funded from existing facilities, with
integration and associated capital expenditure
costs over the coming 12-18 months expected
to be approximately $22m. The integration of
the expected $160m of Ovato revenue into IVE’s
existing manufacturing footprint is estimated
to deliver a $15m increase in underlying NPAT
IVE Group Limited (circa 35% increase in EPS) once the integration is
complete in 18 months.
To preserve balance sheet strength and to provide
capacity to fund future growth initiatives post
the Ovato acquisition, the Company successfully
completed a $19.3m capital raising (8.58m
shares issued at $2.25 per share) in October
2022. The capital raising strengthened IVE’s
institutional shareholder base, further increasing
liquidity in the market for IGL shares. The
Company currently has $30-40m in available
capacity to pursue targeted earnings accretive
opportunities, particularly our intended expansion
into the adjacent packaging sector as previously
foreshadowed.
During the year, we undertook a detailed
assessment in conjunction with an external
specialist to define our material environmental
social governance (ESG) issues, and inform
the development of a robust and transparent
sustainability framework. We will shortly finalise
the action plan and reporting regime based on
in-depth analysis and informed by our ambitions
for sustainable leadership and the views of key
stakeholders.
My sincere thanks to our CEO Matt Aitken for his
ongoing commitment and outstanding leadership
of the business, our cohesive and talented
leadership team, the broader management team,
and our 2,000+ dedicated staff for their wonderful
efforts throughout the year. Andrew Bird was
appointed to the Board as an independent
non-executive director in April 2022. Thank you to
my fellow directors for your ongoing contribution,
expertise and support.
The Company has emerged from the COVID-19
pandemic with an improved market position, a
very strong balance sheet, and a management
team focused on ensuring continued strong
performance and committed to the execution of
our ongoing strategy of diversification and growth
over the years ahead.
Geoff Selig
Executive Chairman
9
Annual Report 2022 CEO’s review
The Company’s outstanding results over the
last year demonstrate the extent to which
the business emerged ‘match fit’ from the
full impacts of the COVID-19 pandemic
and returned to a more stable operating
environment. I am greatly appreciative of the
ongoing commitment and skill of our 2,000+
staff in maintaining high levels of service to our
clients through what was an incredibly active
and productive year for the business.
The Group delivered a strong uplift in underlying
financial performance following two years
of unprecedented uncertainty and volatility.
Revenue increased $102.5m (15.6%) on the
prior year to $759m, driven by the post-COVID
‘bounce back’, strong new business momentum,
and a circa $30m contribution from the ADG
and AFI acquisitions completed in November
2021. Although showing some signs of recovery,
revenue in the travel & tourism and the events/
exhibition sectors remains below pre-pandemic
levels. Outside of those laggard sectors, revenue
growth was strong and momentum has continued
into FY23 across our existing client base and new
business secured. We continue to benefit from
IVE’s differentiated value proposition and an
outstanding, loyal and diverse client base.
Growth in EBITDA and NPAT of 13.3% and 66.1%
respectively was largely driven by the uplift in
revenue, offset in part by a modest reduction in
gross profit margin to 46.6% from 48.1% in the
prior year, primarily due to contractual timing
differences of passing on paper price increases.
EBITDA conversion to operating cash of 95%
($91.7m) reflected disciplined working capital
management and included the increase in
inventory holdings to mitigate ongoing supply
chain volatility.
10
Capital expenditure for the year was $13.9m, the
two most significant components being $3.8m
outlaid for our major Victorian site consolidation
program and $3.7m for our digital printing fleet
upgrade and expansion. Another key investment
initiative during the year was the re-platforming
of Lasoo as outlined overleaf.
Strategic initiatives undertaken during the year
included:
Victorian site consolidation
> Over the last two years, we have invested
significantly in our Victorian site consolidation
program. This will result in IVE operating from
two precincts in Melbourne, driving further
efficiencies and enhanced client service. Our
Sunshine facility is the base for our Victorian
web offset printing operation and letterbox
distribution hub. The new Braeside precinct
is the base for our other Victorian operations
spanning sheetfed & digital printing, data
driven communications, retail display,
premiums & merchandising and fulfilment &
logistics
Supply chain
> Global supply chain disruption for both
raw materials and finished goods required
micromanagement throughout the year.
Our strategic decision to increase inventory
holdings placed us in a strong competitive
position to respond to client demands. During
the year, we benefited from clients moving
revenue onshore from Asia, particularly across
the retail display sector. The Company remains
focused on the ongoing close management
of this dynamic, which remains volatile
particularly out of Europe, and is expected to
continue in the near term
IVE Group Limited Lasoo
> IVE identified a meaningful opportunity to
transform Lasoo into a superior e-Commerce
marketplace for retailer’s specials. Over
the last year the Group invested $4.7m to
completely rebuild and market test the Lasoo
platform (200,000 active users per month since
2016). The new platform is expected to drive a
greatly enhanced online consumer experience
and to deliver commercial upside to our
extensive retail client base and to IVE
> This investment provides an opportunity to
commercialise and grow our already active
user base on the back of:
— Game changing upgrade of functionality
— Greatly improved product range, pricing
visibility, search and comparison engine
— Consumers’ ability to easily discover,
compare and purchase specials from
multiple retailers on the one platform in a
single transaction
> The Lasoo marketplace comprises 80 of
Australia’s leading retailers across a broad
range of sectors, 80% of whom are expected to
have full e-Commerce functionality
> A $4m consumer go-to market campaign to
launch and amplify Lasoo was rolled out in
September/October 2022
A clearly defined and well-executed long-term
strategy has cemented IVE as the largest
integrated marketing communications business
in Australia, holding leading market positions
across all sectors in which we operate. Our strong
balance sheet places us in a very good position
to invest across a range of organic initiatives
like Lasoo, together with attractive ‘bolt on’ and
strategic acquisition opportunities that may
present as we continue to grow and evolve the
Group’s offering. I look forward to providing a
more comprehensive overview of our strategic
plan to move into the adjacent packaging sector
at our AGM in November.
My thanks to our Executive Chairman Geoff Selig
for his ongoing support and encouragement, our
talented and focused leadership team, and to the
other members of the Board for their engagement
and expertise throughout the year.
I am most fortunate to lead a business with a
wonderful culture, unparalleled value proposition,
top-tier client base, and with the financial
strength to continue executing on our initiatives to
grow and further strengthen the Group over the
years ahead.
Matt Aitken
Chief Executive Officer
11
Annual Report 2022 Board of Directors
Geoff Selig
Executive Chairman
Paul Selig
Executive Director
Appointed: 10 Jun 2015
Appointed: 10 Jun 2015
Sandra Hook
Independent
Non-Executive Director
James Todd
Independent
Non-Executive Director
Appointed: 1 Jun 2016
Appointed: 10 Jun 2015
Cathy Aston
Independent
Non-Executive Director
Gavin Bell
Independent
Non-Executive Director
Andrew Bird
Independent
Non-Executive Director
Appointed: 15 Dec 2020
Appointed: 25 Nov 2015
Appointed: 1 Apr 2022
1212
IVE Group Limited IVE centenary
For over 100 years the
fundamentals that underpin
our business remain the
same. We believe our
continued focus on people
and culture, a customer
first philosophy, sustained
investment in our asset
base and the ongoing
diversification of our income
stream will continue to guide
us into the future.
Clockwise from top: Balmain NSW, 1921; Balmain NSW, 1960;
Oscar Selig, founder, 1921. Main: The new Braeside precinct, 2022.
1313
Annual Report 2022 Operating and
financial review
1414
IVE Group Limited Our vision, purpose and values
Our vision and purpose is to maintain and grow a
highly respected, strong and sustainable business
for all key stakeholders – our staff, our clients, our
shareholders and the community more broadly.
Core to this is ensuring a value proposition that
maintains its relevance to our clients’ ever-
evolving communications needs.
IVE unlocks value for our stakeholders through the
powerful combination of our brand values that
are the guiding principles of our behaviour – core
to this is our ‘one company philosophy’.
As specialists,
we collaborate to deliver
holistic customer-focused
solutions for our clients.
Drawing on our combined
skills, we partner
with our clients in a
flexible and friendly
manner to deliver
exceptional outcomes.
We have a responsibility
to our staff, our clients, our
shareholders and the community
more broadly to be honest,
upfront and accountable. Every
moment matters, so
we’re always on point
and ready to deliver
reliable, effective
marketing solutions.
Collaborative
Accountable
Smart
Passionate
We’re focused on
leading the way with
practical, progressive
and innovative
solutions. Always
looking ahead and reading
the shifts in our sector, we
anticipate what’s coming next
and invest accordingly.
We’re a dynamic
business full of
genuine, passionate
people – always at
the ready, to deliver
more for our clients. We believe in
the work we do and the benefits
we provide. It’s what drives us all
to go further every day.
15
Annual Report 2022 Our integrated service offering
Specialising in creative, data-driven communi cations, integrated marketing, production and
distribution, we bring together the capabilities, specialists and technology needed to make customer
connection seamless.
Our offering is supported by robust integrated technology platforms that make complex marketing
simpler for our clients.
Creative
Services
> Visual
> Motion
> Digital creative
> Personalised
> Structural (3D)
Data-Driven
Communications
Production &
Distribution
Integrated
Marketing
> CX data & insights
> Printing
> Creative services
> Marketing
technology
> Omni-channel
deployment
> Archive retrieval
> Data enrichment
— Sheetfed
— Digital
— Web offset
> Retail display
> Premiums &
merchandising
> Integrated logistics
> Distribution
> ivolve PPE
> Collateral
optimisation
> Resource
management
> Supply chain
> Business
intelligence
16
IVE Group Limited Our clients
1717
Annual Report 2022 Strategy and growth
IVE commenced the evolution to a broader
product and service offering late in the 1990s,
through a combination of organic growth
initiatives and a disciplined acquisition program.
IVE has led sector consolidation and innovation
over the last 10 years and today is the largest
and most diversified integrated marketing
communications service provider in Australia.
Core to expediting the execution of our growth
and ongoing diversification strategy was our
decision to list on the ASX in December 2015.
Strong free cash flow, combined with access to
capital, has enabled the Company to successfully
execute a transformational investment and
growth program over recent years to further
expand and strengthen our integrated
communications offer to enhance long-term client
relationships.
Our continued growth and diversification, and
the convergence of technologies on the back of
the digital revolution over the last decade, has
coincided with a meaningful consolidation across
the more traditional parts of the marketing
communications sector. This has resulted in a
more defined competitive landscape than ever
before with a reduced number of competitors.
Integral to the ongoing sustainability of the
business is that the value proposition we take to
market has always remained relevant by being
closely aligned to our clients evolving marketing
communications requirements.
The diversity of IVE’s value proposition places
us in a strong position relative to a number of
competitors across the sector. IVE does not have
one headline competitor that has an equivalent
breadth of offering, and we continue to hold
leading market positions across the sub sectors in
which we operate.
18
IVE Group Limited Continuation of the Group’s long-term strategy to
further diversify and grow revenue and earnings
A clearly defined and well executed strategy
over the last 20 years has cemented IVE as the
largest integrated marketing communications
business in Australia, holding leading market
positions across all sectors in which we operate.
> IVE holds leading market positions across the
marketing communications sector, has a strong
and diverse client base, good revenue mix
across a range of sectors, and has maintained
stable margins
Execution of our strategy has resulted in a
diversified, resilient business supporting a
consistently high dividend yield, and a strong
balance sheet to pursue further growth
opportunities.
Investment, expansion and growth since listing
on the ASX in December 2015
> Strong free cash flow since listing and access to
capital has enabled the Company to execute
a transformational investment program that
has further expanded our diversified integrated
marketing communications offer
> The Group has consistently generated strong
cash flow as evidenced by a five year track
record since FY18 as follows:
— Operating cash flow of $380m
— Free cash flow of $290m
— Delivered an average conversion of (pre
AASB 16) EBITDA to operating cash of 100%
> The disciplined execution of our strategic
investment program over the last 5 years has
resulted in significant increases in both revenue
and earnings, albeit FY20 and FY21 were
COVID-19 impacted
19
Annual Report 2022 Market positioning
COVID-19 disruption has strengthened our
already leading market positions across a
number of key sectors:
> IVE is considered an attractive counterparty
given the diversity and power of our value
proposition, geographical footprint and
financial strength
> The effects of COVID-19 have increased
pressure on key competitors in some sectors.
We are ideally positioned to take advantage of
any resulting opportunities
Revenue diversification
Execution of our strategy has resulted in the
increased diversification of revenue streams and
broader, deeper client relationships:
> Our long-term strategy of evolving our value
proposition has resulted in well-diversified
revenue streams across multiple sectors
> IVE’s broad product and service offering has
resulted in a large proportion of our clients
engaging with us across multiple parts of our
business
> We have seen revenue bounce back across most
parts of the business as the economy emerges
from COVID-19
> We are ideally positioned to capitalise on
opportunities to grow market share across
multiple sectors
> The Company’s capacity to fund a range of
organic and inorganic strategic initiatives will
drive further revenue diversification
Growth opportunities
We continue to organically grow revenue and
earnings on the strength of our integrated offer,
world class operations, market position and
competitive advantage.
Our strong balance sheet places us in a very
good position to invest across a range of organic
initiatives like Lasoo, together with attractive ‘bolt
on’ and strategic acquisitions that may present.
In this regard, the Company has allocated
$30–40m to invest in a range of earnings
accretive opportunities as outlined below.
Complementary bolt-on acquisitions
We expect a number of ‘bolt-on’ acquisition
opportunities will present over the coming
12–24 months. We have a demonstrable track
record over many years of successfully acquiring
and integrating businesses at low multiples to
unlock synergies and drive EPS uplift.
Packaging
As previously communicated, the Company sees
opportunities for both organic and acquisition
growth in the packaging sector. Our near term
focus is on finalising the strategy and plans to
build our packaging capability over the coming
two years. To this end, over recent months the
Company has been working closely with an
expert advisory firm to further develop and refine
our strategy to move more aggressively into the
packaging sector.
An in-depth analysis of the Australian packaging
market is now complete:
> The analysis confirms that IVE’s strategic
imperative to grow our packaging offer is
sound, and IVE should continue to actively seek
an appropriate acquisition to expedite this
strategy
> The analysis also identified other packaging
markets which strongly complement IVE’s key
strengths, with the potential to further build out
the breadth and depth of IVE’s offering to its
diverse customer base
20
IVE Group Limited 21
Annual Report 2022 IVE’s new e-Commerce marketplace for retailers’ specials
A significant organic initiative has been the investment to upgrade our digital catalogue platform, Lasoo.
In FY22, we invested $4.7m to completely rebuild and market test the Lasoo platform. The commentary
following provides an overview of this important initiative.
Lasoo today – significant, loyal
consumer and retailer base
despite limited functionality
> Lasoo was established in 2007 and acquired by
IVE in January 2020
> Lasoo has longstanding, loyal consumer and
retailer support despite historically limited
functionality:
— Over 200,000 active users per month on
average since 2016
— 23% of current users visit the site daily
— 8.6% of sessions result in a buy now click
(demonstrating high purchase intent)
— Many of Australia’s major retailers are
active on the platform including ALDI,
Chemist Warehouse, Woolworths, Coles,
Big W, Target, Kmart, The Good Guys and
Australia Post
> The platform was historically positioned as a
digital catalogue aggregation site:
— Offered as an adjunct (bundled service) to
the printed catalogue
— Minimal historical investment in functionality
and marketing
— Superficial and inefficient comparison of
‘specials’
— No transactional capability: users redirected
to retailers’ platforms
— Generated only modest digital catalogue
creation revenue for IVE
> IVE was unable to properly commercialise
Lasoo given the limited historical functionality
22
IVE Group Limited Lasoo tomorrow – e-Commerce
marketplace for retailers’ specials
> IVE revenue will be derived from multiple
sources:
— Existing digital catalogue creation
— New commission revenue via a fully
integrated checkout capability
— Other new revenue including:
• Lead conversion revenue for retailers not
yet fully integrated
• Advertising and product boosting revenue
via a scalable self-service retailer portal
• Data related revenue on a subscription
basis
> IVE identified a meaningful opportunity to
transform Lasoo into a superior platform to
drive a greatly enhanced online consumer
experience and to deliver commercial upside to
IVE and IVE’s extensive retail client base
> In FY22, the Group invested $4.7m to completely
rebuild and market test the Lasoo platform
> This investment provides an opportunity to
commercialise and grow our already active
user base on the back of:
— Game changing upgrade of functionality
— Greatly improved product range, pricing
visibility, search and comparison engine
— Consumers ability to easily discover,
compare and purchase specials from
multiple retailers on the one platform in a
single transaction
The new
Lasoo
platform
went live
mid-September
2022
23
Annual Report 2022
Lasoo launch
Strong retailer support, best-in-class tech stack & CX,
experienced team
> Around 65 of Australia’s leading retailers
> 80% of retailers will have full e-Commerce
across a broad range of sectors confirmed for
launch (previous platform peak of 42):
— 30 new retailers
— 13 existing IVE (retailer) clients
> 15 additional retailers will join post-launch due
to integration timing
> Targeting further growth in retailer
participation:
— As platform traffic increases and marketing
drives heightened awareness
— Cross-selling into IVE’s 200+ retailer clients
not already on Lasoo
functionality at launch
> 20% of retailers will be on lead generation
model (via click through to their own platforms)
until integrated with e-Commerce capability
> Experienced team in place led by CEO, Rob
Draper and Chief Product Officer, Matthew
Paule, formerly of Domain Group
> Consumer go-to-market campaign and staff
costs will total $4m pre-tax in FY23
> Scalable best-in-class tech stack built on
Amazon Web Services
$4m consumer
go-to-market
campaign
launched
Sep/Oct 2022
24
IVE Group Limited Lasoo go-to-market campaign
DOOH large format
DOOH small format/retail
Digital TVC prospecting and remarketing
Radio
Print
APEX native
Social
SEM
25
Annual Report 2022 Year in review
2626
IVE Group Limited Year in review
Following two years of unprecedented uncertainty
and volatility and, whilst not without its
challenges, FY22 pleasingly saw revenues bounce
back significantly over the heavily COVID-19
impacted FY21. Revenue growth combined with
our recalibrated and tightly managed cost base,
resulted in a strong uplift in both EBITDA and
NPAT over PCP. The result was impacted by a
slight reduction in gross profit margin over PCP
primarily due to contractual timing differences
of passing on paper price increases throughout
the year.
Our financial and operational performance
once again demonstrates IVE’s underlying solid
fundamentals and continued resilience.
The Company met full year earnings guidance
reporting NPAT of $33.1m, resulting in 71%
growth in EPS over PCP (excluding JobKeeper
receipts in PCP).
Our committed workforce of 2,000+ staff under
the leadership of our CEO, Matt Aitken, once
again responded by coming together and
committing to do whatever was required to ensure
high levels of client service were maintained. This
was achieved through a hybrid of continuing
operations across multiple production/service
facilities and staff working remotely.
We undertook a number of strategic initiatives
over the year including the acquisitions of Active
Display Group (ADG) and AFI Branding Solutions
(AFI) on 1 November 2022, the significant
investment to consolidate a number of our
Victorian businesses into our new Braeside
precinct, and our strategic and meaningful
investment in Lasoo.
Further, our balance sheet has continued to
strengthen over the last two years which places
the Company in a strong position to pursue a
range of earnings accretive initiatives.
Customers and revenue
IVE continues to benefit from its differentiated
value proposition and a loyal, strong and
diversified customer base.
Retention
> IVE provided continuity of service and
supply to all customers throughout the year
notwithstanding the ongoing impacts of
the pandemic during H1 and supply chain
challenges experienced throughout the
majority of the year
> Share of wallet growth across IVE’s 2,800
customers was achieved through selling more
products and services to existing customers
> Our client retention remains excellent with all
key contracts renewed throughout FY22
> There was no material client loss in FY22
Growth
> Throughout FY22 IVE continued its focus on
growing market share through harnessing the
power and uniqueness of IVE’s go-to-market
proposition, in particular signing meaningful
contracts with Nestlé and News Limited
> Despite the pandemic and supply chain
challenges, new business momentum remains
strong across all parts of the business and
$50m of new client revenue was transacted
in FY22
> The pipeline of opportunities is strong for FY23
with a number of key prospects well advanced
in the sales cycle
27
Annual Report 2022 Supply chain
Banking and liquidity
Global supply chain disruption for both raw
materials and finished goods required close
attention throughout the year.
Our strategic decision to increase inventory
holdings places us in a strong competitive position
to respond to client demands.
During the year we also benefited from clients
moving revenue onshore from Asia, particularly
across the retail display sector.
The Company remains well placed to manage
this dynamic which is expected to continue for the
foreseeable future.
Capital expenditure
The Company’s excellent operational footprint
is the result of targeted investment over
many years:
> FY22 capital expenditure was $13.9m
(excluding Lasoo investment), $3.8m relating
to our Victorian site consolidation program
and $3.7m relating to our digital printing fleet
upgrade and expansion
> Lasoo investment of $4.7m to transform
existing digital catalogue aggregation
platform into a new e-Commerce marketplace
for retail ‘specials’
> FY23 capital expenditure is expected to be
circa $14m
Dividends
Strong operating cash flow of $91.7m reflected
95% operating cash conversion. The final dividend
of 8 CPS declared today contributed to a full year
dividend of 16.5 CPS fully franked, an uplift of
18% over PCP.
The Company’s dividend policy remains
unchanged, targeting a full year payout ratio of
65–75% of underlying NPAT.
Net Debt
The Company’s balance sheet has strengthened
significantly over the last two years on the back
of continued strong cash flow.
Net debt was $76.8m at 30 June 2022, down
$60.3m from $137.1m at 30 June 2020. Cash at
bank was $67.0m at 30 June 2022, after repaying
$35.0m of senior debt during the year. At 25
August 2022, undrawn facilities were $55.0m.
Net debt of 1.1x (pre AASB 16) EBITDA is well
below the Company’s stated target of 1.5x.
The strength of our balance sheet places IVE in
a very good position to invest across a range of
organic initiatives, together with a combination
of opportunistic ‘bolt on’ acquisitions, or more
strategic acquisitions to further broaden and
diversify the Group’s revenue and earnings.
28
IVE Group Limited 29
Annual Report 2022 Review of financial
performance
3030
IVE Group Limited Review of financial performance
Basis of preparation
IVE’s FY22 Financial Report is presented in
accordance with Australian Accounting
Standards which comply with International
Financial Reporting Standards (IFRS).
The Directors believe the non-IFRS underlying
results better reflect the underlying operating
performance and is consistent with prior year
reporting.
In this report, certain non-IFRS financial
information (underlying) has also been included
to allow investors to understand the underlying
performance of IVE. The non-IFRS financial
information pertaining to the FY22 and FY21
results is presented before the impact of certain
non-operational items and on a continuing
operations basis.
The non-IFRS underlying financial information has
not been audited or reviewed.
Financial information in this report is expressed
in millions and has been rounded to one decimal
place. This differs from the Financial Report where
numbers are expressed in thousands. As a result,
some minor rounding discrepancies occur.
Financial Results on an IFRS and underlying basis (underlying where noted)
FY21
$m
Variance
$m
Variance
%
Revenue
Gross profit
% of revenue
Underlying EBITDA continuing operations (inc JobKeeper)
Underlying EBITDA continuing operations (ex JobKeeper)
EBITDA
Depreciation and amortisation
EBIT
Net finance costs
NPBT
Income tax expense
NPAT from continuing operations
Discontinued operations (NPAT)
NPAT
NPATA continuing operations
Underlying NPAT continuing operations (inc JobKeeper)
Underlying NPAT continuing operations (ex JobKeeper)
Underlying NPATA continuing operations (inc JobKeeper)
Underlying NPATA continuing operations (ex JobKeeper)
FY22
$m
759.0
353.7
46.6
96.6
96.6
90.5
42.0
48.5
9.1
39.3
12.4
26.9
0.0
26.9
30.3
33.1
33.1
36.4
36.4
656.5
316.0
48.1
100.2
85.3
95.6
47.2
48.4
12.1
36.3
12.1
24.2
4.8
29.0
28.2
30.2
19.9
34.1
23.8
102.5
37.7
–
(3.6)
11.4
(5.1)
(5.2)
0.1
(3.0)
3.1
0.3
2.8
(4.8)
(2.0)
2.1
2.9
13.2
2.3
12.6
The underlying financial results are on a non-IFRS basis and are not audited or reviewed
The underlying financial results are on a continuing operations basis and exclude non-operating items
15.6
11.9
(3.2)
(3.6)
13.3
(5.4)
(11.1)
0.2
(24.4)
8.5
2.6
11.4
(100.0)
(7.1)
7.6
9.5
66.1
6.9
53.1
31
Annual Report 2022 Review of financial performance – continued
Non-operating items excluded from underlying NPAT
FY22
$m
26.9
4.9
0.7
1.7
1.2
(0.3)
8.2
2.1
33.1
compares to $85.3m PCP (excluding JobKeeper),
an increase of $11.4m or 13.3%. Growth in EBITDA
over PCP was primarily driven by the uplift in
revenue, offset in part by contractual timing
differences of passing on recent paper increases.
Depreciation and amortisation of $42.0m was
down from $47.2m PCP. Pre AASB 16 depreciation
(excluding amortisation) was $16.9m, largely
unchanged from $17.2m PCP.
IFRS net finance costs were $9.1m compared
to $12.1m PCP. Both periods were impacted by
financial asset valuation write-downs ($1.7m
in FY22 and $2.6m in FY21). On an underlying
basis, net finance costs were $7.1m compared to
$9.5m PCP and on a pre AASB 16 basis were $3.7m
compared to $6.3m PCP, reflecting the lower net
debt position due to additional debt repayments
made during the year.
IFRS NPAT of $26.9m compares to $24.2m PCP
on a continuing operations basis noting FY21
included JobKeeper benefits ($10.3m on an after-
tax basis). Underlying NPAT of $33.1m compares
to FY21 of $19.9m (excluding JobKeeper), growth
of 66%, a strong result and a significant uplift on
PCP reflecting much stronger activity across all
areas of the business.
IFRS to underlying NPAT reconciliation
IFRS NPAT
Restructure costs (site & acquisition relocation)
Acquisition costs
Software as a service (still in development stage)
Employee share issue
Other items
Pre-tax non-operating items
Tax effect of adjustments
Underlying NPAT
Revenue
Total FY22 revenue was $759.0m, an increase
of $102.5m from $656.5m PCP. Circa $30m of
the increase reflects eight months of revenue
from ADG and AFI (acquired 1 November 2021).
Excluding the ADG/AFI acquisitions, revenue
growth of 11.1% reflects increased activity
over a COVID-19 impacted PCP, continued solid
new business momentum and high levels of
client retention.
Earnings
Gross profit margin was 46.6%, down slightly
from 48.1% PCP, primarily reflecting contractual
timing differences of passing on recent paper
price increases as previously foreshadowed. The
Company continues to work closely with our
clients to successfully manage flow-through
price increases as a result of upward pressure
on input costs. We built and retained higher
inventory levels to ensure no disruption to client
service levels, and to place the business in a
strong position to take advantage of growth
opportunities.
Notwithstanding the temporary impact in FY22,
the Company’s margins have remained broadly
stable over time.
IFRS EBITDA of $90.5m compares to $95.6m PCP
which included a $14.9m net benefit from
JobKeeper. Underlying EBITDA of $96.6m
32
IVE Group Limited FY22 EPS was 18.8 cents on an IFRS basis, or
23.1 cents on an underlying basis and compares
to 13.5 cents PCP (excluding JobKeeper)
representing 71% growth on FY21.
> $1.2m cost of our previously communicated
one-off employee share issue in appreciation of
the commitment and effort of our staff during
the COVID-19 period
Non-operating items excluded from underlying
NPAT includes:
> $4.9m for the relocation of four Victorian
businesses to the new Braeside precinct,
including redundancies as a result of the
ADG and AFI acquisitions and subsequent
integration
> $0.7m for ADG/AFI related acquisition costs
> $1.7m software as a service computer expenses
relating to new system implementation which
is excluded from underlying earnings as the MIS
system is still in development stage
> Other items ($0.3m) includes loss on sale of
fixed assets and a financial asset write-down
more than offset by proceeds of a contractual
claim recovery in other income
Net debt
Net debt
Loans & borrowings* – sub total
Less cash
Net debt
* Loans & borrowings are gross of facility establishment costs
* Excludes right of use liabilities impacts from adopting AASB 16
Net debt at 30 June 2022 was $76.8m and
compares to $77.3m PCP.
Net debt was lower than guidance (provided on
22 June 2022) due to better than expected debtor
collections in the month of June, a pleasing result
given the Company’s targeted and foreshadowed
increase in inventory holdings.
The reduction in the cash balance on PCP
reflected:
> $35.0m senior debt repaid in August 2021
> Increase in working capital (circa $30m of
additional inventory) due to targeted build of
inventory levels.
FY22
$m
143.8
67.0
76.8
FY21
$m
183.8
106.5
77.3
At 30 June 2022, undrawn facilities were $35.0m.
Following a further $20.0m debt repayment in
July 2022, undrawn facilities were $55.0m as at
25 August 2022.
In May 2022, the Company successfully renewed
its syndicated senior debt facility for a further
four year term, with the maturity date extended
to May 2026. The renewal process achieved
improvements in both the terms and pricing
of the facility. These favourable outcomes are
reflective of IVE’s ongoing balance sheet strength,
earnings quality, and our strong relationship with
syndicate members.
33
Annual Report 2022 Review of financial performance – continued
Capital expenditure
Group-wide targeted investment and maintenance
Lasoo investment
Total
Capital expenditure excludes addition of Braeside make good asset provision
Full year capital expenditure of $13.9m excluding Lasoo investment:
> $3.8m relates to the Group’s Victorian site construction
> $3.7m relates to digital print fleet upgrade and expansion
FY22
13.9
4.7
18.6
Lasoo investment of $4.7m to provide a greatly enhanced and expanded Lasoo platform including user
and consumer experience.
FY23 capital expenditure is expected to be circa $14.0m.
Cash flow
EBITDA
Movement in NWC/non-cash items in EBITDA
Operating cash flow
Capital expenditure (net)
Payments for acquisitions & deferred consideration
Net cash flow before financing and taxation
Tax
Payments of bank loans (net)
Payment of lease liabilities
Payment of share buy back
Dividends paid
Interest paid
Net cash flow
Operating cash conversion to EBITDA
Free cash conversion to EBITDA
Underlying
FY22
$m
96.6
(4.9)
91.7
(15.5)
(5.0)
71.3
(13.7)
(39.2)
(29.1)
(0.2)
(22.2)
(3.2)
(36.2)
95%
79%
IFRS
FY21
$m
90.5
(3.8)
86.7
(15.5)
(5.0)
66.2
(11.8)
(39.2)
(29.1)
(0.2)
(22.2)
(3.2)
(39.4)
96%
79%
The underlying financial results are on a non-IFRS basis and are not audited or reviewed
The underlying financial results are on a continuing operations basis and exclude non-operating items
Operating cash flow of $91.7m, reflecting 95% operating cash conversion.
Disciplined management of working capital, including reduced debtor days over the period and strong
collections, offset by targeted increase in inventory holdings due to supply chain volatility as previously noted.
Final dividend of 8.0 CPS fully franked, up 14% from 7.0 CPS PCP resulting in a full year dividend of
16.5 CPS fully franked.
The company’s dividend policy remains unchanged, targeting a full year payout ratio of 65% to 75% of
underlying NPAT.
Return on funds employed (ROFE) improved to 21% from 14% PCP on an underlying basis.
34
IVE Group Limited 35
Annual Report 2022 36
IVE Group Limited Environmental, social and corporate governance
Over the last 12 months, we have continued to
experience a meaningful increase in interest
from our clients and investors regarding
Environmental, Social and Governance (ESG)
topics. At IVE, the Board has committed to
taking concrete steps to understand, report and
improve on our impacts in collaboration with
our valued stakeholders.
We recognise the critical role of ESG in our
long-term success and the responsibility we
have to our people, customers, investors and
wider stakeholders to do the right thing. We
have a long history of adapting to change
and acting responsibly. From this position of
strength, we will be able to meet the needs
of our stakeholders, address risks, leverage
opportunities and remain a partner of choice.
During the year, we undertook a materiality
assessment with a third-party to define our
material ESG issues and inform the development
of a robust and transparent sustainability
framework. To define our material topics we
engaged internal and external stakeholders,
reviewed trends shaping the future risks and
opportunities for our sector and referred to
domestic and international sustainability best
practices. We have finalised our material topics
and in the following years, we will align our
reporting to these key issues.
In addition to completing a materiality
assessment, we measured our environmental
impact across key areas such as waste,
water and energy and are in the process of
completing a carbon footprint. Over the coming
year, we will finalise a strategic framework
for sustainability action at IVE based on
science and informed by our stakeholders and
ambitions for sustainability leadership.
IVE has developed policies and solid positions
on a range of ESG issues and these efforts are
detailed in the following pages. We recognise
this is a rapidly evolving landscape and there is
much to do. So, we are embarking on a journey
that will see us reduce the negative impacts
of our operations and bolster the positive
contribution we make to society.
As we continue to develop and evolve our
approach, we welcome feedback and
participation from our stakeholders and look
forward to sharing our progress in future
reporting and communications.
People and culture
Proudly inclusive, we believe we are an employer
of choice across all the sectors in which we
operate, continuing to attract and retain the
best diversity of talent. Our IVE Care program is
focused on ensuring and improving the wellbeing,
diversity and inclusion, and health and safety
of all our employees. We believe in ‘a better you,
a better workplace’ for our people and for their
families.
The residual impacts of the pandemic continued
throughout FY22, and we acknowledge the
significant efforts and contribution of all of our
employees in successfully meeting these impacts
and challenges.
The business has maintained a resolute focus on
keeping our employees and their families safe,
and our employees are to be commended in this
regard. Whether it was through working from
home as required, social distancing, mask wearing
or applying additional hygiene measures, every
employee has contributed to us maintaining safe
and healthy workplaces across all sites.
The business has also maintained a close focus
on workload impacts across FY22 due to the
pandemic-related absences and more flexible
work arrangements. Again, our employees have
been tremendously co-operative in assisting the
business to successfully meet these challenges.
37
Annual Report 2022 Environmental, social and
corporate governance – continued
Diversity
& Inclusion
We come from many different nationalities,
backgrounds, experiences and lines of work. Our rich
diversity is at the centre of our success, and at the
heart of our evolution as Australia’s leading holistic
marketing company.
An inclusive working environment that embraces our unique differences and
diverse perspectives, brings greater creativity and innovation, leads to higher
wellbeing, productivity and engagement, and importantly, enables us to better
reflect and relate to our customers. Diversity & Inclusion benefits us all. IVE is
committed to ensuring diversity and inclusion permeate all areas and levels of
our business, with every individual feeling included, safe and supported to express
themselves authentically.
In recognition and support of this, we have established IVE’s Diversity & Inclusion
Program, reinforcing our commitment to growing a diverse and inclusive
organisational culture encompassing and benefiting all employees. For
additional information about IVE’s Diversity & Inclusion Program or to express
your interest in contributing and supporting upcoming diversity and inclusion
events and initiatives, please contact your manager or alternatively you may
forward your feedback to hr@ivegroup.com.au.
> Gender equality and inclusion
> Cultural and linguistic diversity
> Intergenerational and mature age
> Aboriginal and Torres Strait Islander Australians
> LGBTI
> Disability
16
D
i
v
e
r
s
i
t
y
&
I
n
c
l
u
s
i
o
n
.
Lifestyle benefits
The IVE Rewards Program provides our employees
and their families the opportunity to stretch their
dollar further through significant savings at all
of their favourite retailers. Our employees spent
more than $1.4m through this program across
FY22, yielding savings of close to $90k.
Wealth and security
IVE has partnered with Bupa to provide a
corporate health insurance offer with an
employee discount on rates. In addition to
receiving competitive premiums, the cover reduces
the waiting periods for certain benefits and
provides access to the Bupa Life Skills program.
IVE has also made an additional superannuation
fund choice available to employees via a key
client partner.
Personal, family and community
Our Workplace Giving Program has been
developed to build a stronger link between IVE
Group and the community. We believe each of
us has an important role to play in the broader
community. We have designed this program
around a number of great charity partners to
provide employees with a simple and effective
way to regularly donate from their pre-tax
earnings.
We are exceptionally proud of our people. Our IVE
Care Program aims to help our people, through
recognition and support, to achieve their personal
and professional goals. Designed to create an
environment that embraces our diverse workforce,
our employee wellbeing program provides our
2,000+ employees access to a wide range of
benefits, including:
Health and wellbeing
Our Employee Assistance Program (EAP) helps
employees resolve issues and challenges
arising in the workplace or in their personal life
in a positive way. The EAP provides access to
independent, confidential counselling and advice
from qualified and experienced psychologists,
and allied health professionals. IVE also provides
periodic onsite health assessments to help
employees understand and increase awareness of
their health.
Education, information programs and health and
wellbeing campaigns are also made available
to assist employees in making changes for a
healthier lifestyle. As a result of awareness
initiatives, access to our EAP has increased by
50% over the past 18 months. Flu vaccinations
were again offered across the IVE business during
FY22. The business conducted an employee
awareness initiative aligned to R U OK? Day.
38
IVE Group Limited
Diversity and inclusion
We come from many different nationalities,
backgrounds, experiences and lines of work. Our rich
diversity is at the centre of our success, and at the
heart of our evolution as Australia’s leading holistic
marketing company.
An inclusive working environment that embraces
our unique differences and diverse perspectives,
brings greater creativity and innovation, leads to
higher wellbeing, productivity and engagement,
and importantly, enables us to better reflect and
relate to our customers.
IVE Group is committed to ensuring diversity and
inclusion permeates all areas and levels of our
business, with every individual feeling included,
safe and supported to express themselves
authentically. In recognition and support of this,
we have established IVE’s Diversity and Inclusion
Program, reinforcing our commitment to growing
a diverse and inclusive organisational culture
encompassing and benefiting all employees.
Our Diversity and Inclusion program identifies six
key areas of focus:
> Gender equality and inclusion, cultural and
linguistic diversity, intergenerational and
mature age
> Aboriginal and Torres Strait Islander
Australians
> LGBTIQ (lesbian, gay, bisexual, trans/
transgender, intersex, queer)
> Disability
In FY22 we ran a range of employee events
related to Pride Week and International Women’s
Day, R U OK? Day, Liptember and we again
partnered with the Australian Network on
Disability to participate in their ‘Stepping Into’
internship program.
Workplace health and safety
(WH&S)
IVE Group is committed to providing a healthy
and safe workplace for all of our employees,
contractors, visitors and suppliers, through our IVE
Care Program.
IVE Care embeds WH&S principles into everything
that we do.
Our WH&S commitments include:
> Engagement programs to ensure that our
people are involved in identifying, and enabling
the solutions to WHS risks
> Empowering our people to make informed,
effective, risk-based decisions through
education, instruction and continual
improvement models
> Using innovation and continual improvement
pathways to consistently improve WHS
performance
> Always seeking to set industry best approaches
to critical risk management
> Achievement of our objectives, targets and
actions through evidence-based decision-
making
> Planning, implementation and evaluation of all
activities for operational excellence
> Education through information, instruction,
data and analytics
We have a dedicated, full-time team continually
enhancing our WH&S processes and amplifying
awareness to ensure all of our people, across
all of our locations, experience the best work
conditions possible.
Sustainability and risk
management
As the expectations on corporate responsibility
increase, and as transparency becomes more
prevalent, IVE recognises the need to act on
sustainability and is committed to engaging and
collaborating with our clients and investors to
provide an ethical and sustainable partnership.
Through the ongoing assessment of our quality,
information security, ethical and environmental
practices, IVE continues to focus on being a
responsible business that values what’s important
to our customers. IVE’s accreditations continue
to make us a preferred partner for many of our
customers.
39
Annual Report 2022 Environmental, social and
corporate governance – continued
Quality assurance
FS 729422
IVE understands the importance
of quality management and has
maintained certification to ISO
9001 in Quality Management for 20 years. This
commitment to quality ensures we can provide
superior products and services to our customers,
measured in terms of performance, reliability and
durability and returned in customer satisfaction
and loyalty. We regularly receive positive and
welcomed feedback from our clients and strive to
continue to provide this level of excellence from
marketing technology through to production and
distribution.
Ethical sourcing and environmental
management
IVE Group continues to deliver a
number of processes to ensure that
we have a focus on improved sustainability and
the ongoing protection of the environments that
we source from, work in and supply.
IVE expects all our suppliers (companies and
individuals who conduct business with any IVE
Group business unit) to adhere to the same
ethical values we uphold and as such has put
in place controls to ensure that every supplier is
assessed, complies to our values and standards,
and meets and exceeds our delivery expectations.
Through the blending of our best practices and
our socially responsible supply base, we are able
to achieve the optimal levels of cost efficiency,
product/service effectiveness and product safety
in a sustainable, inclusive and socially ethical
manner.
IVE is an active member of Supplier Ethical
Data Exchange (SEDEX). Supplier membership
is highly regarded, and allows IVE to assess risk
relating to labour standards, health and safety,
environmental impact and provide supply chain
visibility. We understand that ensuring good
business practices is important to our clients, our
employees, our shareholders and we support the
introduction of the Australian Modern Slavery
Act 2018.
We continue to hold accreditation with the
Programme for the Endorsement of Forest
Certification® (PEFC), which tracks forest-based
products from sustainable sources to the final
product. It demonstrates close monitoring of each
step of the supply chain through independent
auditing to ensure that unsustainable sources
are excluded.
Additionally, certification of our fibre, paper
and fibre-based product supply chains to Forest
Stewardship Council® standards assure they
40
IVE Group Limited are free from any direct or indirect involvement
in activities that violate traditional and human
rights in forestry operations, as required by
the International Labour Organization (ILO)
Convention 169.4.
Modern slavery involves the exploitation of
human beings, and is completely unacceptable.
IVE recognises that we have a responsibility to
improve our understanding and mitigate the risks
of it occurring within our operations and supply
chains and have implemented controls to ensure
the integrity of our suppliers Our outstanding
credentials include ISO 14001 Environment
certification and our focus remains on delivering
our promise of continual improvement by
establishing sustainability targets that reflect
our commitment to our customers and the
communities we work in.
Paper
As the largest printer in Australia, IVE is a
significant user of paper from sustainably
managed forests. These sustainably run forests
help prevent the land being sold and lost to
non-forest use e.g. agriculture or infrastructure
development.
The benefits of ‘forest land’ include prevention
of soil erosion, improved water quality – fighting
salinity, providing habitat for native birds and
wildlife and reducing the use of fertiliser and
chemicals. Forests are also an important source
of CO2 capture, acting as a ‘carbon sink’ – taking
more carbon dioxide out of the atmosphere than
they produce.
The industry is a leading recycler as 87% of
paper is recovered for recycling in Australia,
a substantial increase from 28% in 1990. The
majority of catalogues produced are recycled
Recycling complements the need for virgin wood
fibre, further supporting the growth in fibre-based
packaging as an environmentally sustainable
alternative to plastic.
Around 90% of our paper requirement is sourced
offshore as the Australian paper we use is quite
specific in nature. We source paper from North
America, Scandinavia, Europe, and South East,
UK, Italy, Canada, Switzerland, Malaysia,
France, Belgium.
Though we have seen a proliferation of electronic
screens across society, findings conclude that
74% of consumers prefer to read from paper than
from screens and 71% enjoy the tactile nature
of paper. Consumers also fundamentally believe
that when sourced from sustainably managed
forests, paper and print remain a sustainable
way to communicate. (Source: “The Attractiveness
and Sustainability of Paper and Print” – Two Sides
survey July 2016.)
Data security
IVE invests over $2 million dollars
annually to ensure we maintain
best in class data security
certifications such as ISO 27001, PCI DSS (RoA)
and IRAP, all of which are complex and provide a
mature information security profile that supports
our customer’s obligations and commitment to
protecting their customers’ data.
In 2022, IVE completed a group-wide full
infrastructure upgrade which demonstrates
our commitment to continual investment and
improvement in the confidentiality, integrity and
availability of our information systems and the
future growth of our business.
Over the past 12-24 months, IVE has invested
significantly in enterprise grade software and
hardware to advance our maturity in protecting
the business from cyber security risks. We also
have several key initiatives underway to uplift
our capabilities through endpoint, email and
internet protection.
We believe that IVE leads the way in providing
robust and technologically advanced systems,
with the highest security requirements giving our
customers the assurance they require.
Risk Management Framework
The purpose of the Risk Management Framework
is to provide a mechanism for IVE to identify
opportunities and challenges that could impact
the business, understand the risk appetite, and
ensure appropriate mitigations are in place.
Together with the senior executives, the Risk
Register is reviewed on a quarterly basis to
ensure that risk mitigation is in place for all
identified risks, and includes recent events such as
COVID-19, and economic impacts affecting sales
and client demand and supply volatility.
41
Annual Report 2022 Environmental, social and
corporate governance – continued
Key Risk
Description
Risk Appetite
Mitigation
Supply
Chain
Supply Chain
Volatility
Disruption to the
availability of
key inputs and/
or sustained price
increases.
IVE will execute caution
when working with suppliers
of key inputs. There is low
risk appetite for non-supply
or cost increases. This is
measured by lead times,
cost increases and supplier
noncompliance with SLAs.
Environment Environmental,
Social, and
Governance (ESG)
Pressure from
investors and due to
lack of disclosure and
policy to support ESG.
Macro
Environment
Pandemic
COVID-19 impacts
on business/business
does not react fast
enough/not manage
staff health impacts.
IVE will take a balanced
approach to the risks
associated with climate
change. The level of risk
taken will be planned for
each risk event. This will be
measured by monitoring of
production downtime due
to climate change events,
Government reporting on
enviroment/emissions and
ASX disclosures.
IVE will take a balanced
approach to the risks
associated with changes
in the macro environment.
The level of risk taken will
be planned for each risk
event. This will be measured
by monitoring by employee
health, the revenue to budget
in customer sectors, increased
debtor days forward bookings
and economic indicators.
> Inputs readily available through
a multitude of suppliers
> Ability to pass costs on to
customers
> Plan production in advance
> Use of larger, reputable
suppliers
> Sourcing from alternative
countries to avoid regional
tensions in South East Asia
> Increase inventory holdings
> Increases prices in other areas
of business to offset
> Absorb some increases to
protect channel
> Government & ASX disclosures
& reporting
> ISO 14001 certification
> Appropriate and up-to-date
certification for all suppliers
> Ongoing gathering of
accreditations for IVE’s
responses to RFPs
> Implementation of ESG strategy
and workstreams with outsource
providers
> Manage work from home for
employees wherever possible/
monitor employees’ health,
additional cleaning at sites,
provide hand sanitiser and
temperature checks, split shifts
> Pandemic/BCP plans,
identification of Key Customers/
Suppliers/Staff & Functions, site
redundancy, staff stand downs,
revenue and cost forecast
management
> Essential service support for
clients/supply chain mitigation
> Only vaccinated staff,
customers and suppliers to
attend IVE sites
> High level of staff vaccinations
42
IVE Group Limited Key Risk
Description
Risk Appetite
Mitigation
People
Labour Supply
Limited skilled human
resources available
and retainment of
staff due to increases
in market demand
and competitiveness.
Competitive
Environment
Existing Competition
Drives Down Margin
Macro
Environment
An existing competitor
undertakes an
aggressive and
sustained price
discounting,
marketing or product
innovation strategy.
Macro-economic
Macro-economic
changes disrupting
the Australian
economy,
international trade
and key sectors
(i.e. retail or AusPost
services). Inflation,
energy and other cost
increases.
> Salary Reviews
> Training & Development
> Staff Benefits i.e. Shares Bonus,
EAP
> Succession Planning
> Flexible Workplace
> Employer of Choice
> Career Progression
Opportunities
> Appropriate Contract Labour
Suppliers
> Monitor market pricing
> Continuous conversations with
customers
> Driving consistent and high level
customer service
> Ability to pass costs on to
customers
> Horizon scanning by executive
> Indicators in day-to-day figures
i.e. increased debtor days
> MGM and margin decreases
IVE will take a balanced
approach to the risks
associated with retained
and attracting skilled
workers. Each instance will be
considered on its own merits
to drive the desired outcome.
This will be measured by
turnover in specific skills and
roles, exit interviews and
talent loss to competitors.
IVE will take risks in response
to competition and the
competitive environment that
represents value for money in
the returns obtained for the
risk taken.
This will be measured through
pricing and margin pressures,
talent and client retention
and competitor mergers or
failures.
IVE will take a balanced
approach to the risks
associated with changes
in the macro-economic
environment. The level of risk
taken will be planned for
each risk event. This will be
measured by monitoring the
revenue to budget in customer
sectors, increased debtor
days forward bookings and
economic indicators.
Additional information
IVE Group Limited
Level 3, 35 Clarence Street
Sydney NSW 2000
For further information contact:
Geoff Selig
Executive Chairman
+ 61 2 9089 8550
Darren Dunkley
Chief Financial Officer
+ 61 2 8020 4400
43
Annual Report 2022 Directors’ report
for the year ended 30 June 2022
4444
IVE Group Limited The directors present their report together
with the consolidated financial statements of
the Group comprising IVE Group Limited (the
Company), and its subsidiaries (the Group) for
the financial year ended 30 June 2022 and the
auditor’s report thereon.
Principal activities
The principal activities of the Group during the
course of the financial year were:
> Conceptual and creative design across print,
mobile and interactive media;
> Printing and distribution of catalogues,
magazines, marketing and corporate
communications materials and stationery;
> Manufacturing of point-of-sale display material
and large format banners for retail applications;
Operating and Financial Review
The profit after tax of the Group for the year ended
30 June 2022 was $26,932 thousand (2021 Restated:
$29,060 thousand). A review of operations and
results of the Group for the year ended 30 June 2022
are set out in the Operating and Financial Review,
which forms part of the Annual Financial Report.
Dividends
The directors have declared a final dividend of
8.0 Australian CPS, fully franked, to be paid on
13 October 2022 to shareholders on the register at
14 September 2022.
Total dividends of $22,191 thousand were declared
and paid by the Company to members during the
2022 financial year. Further details on dividends are
included in Note 23 of the Financial Report.
> Personalised communications including marketing
automation, marketing mail, publication mail,
eCommunications, and multi-channel solutions;
Significant changes in the state
of affairs
In the opinion of the directors there were no other
significant changes in the state of affairs of the
Group that occurred during the financial year
under review.
> Data analytics, customer experience strategy,
and CRM; and
> Outsourced communications solutions for
large organisations including development of
customised multi-channel management models
covering creative and digital services, supply
chain optimisation, inventory management,
warehousing and logistics.
The Group services all major industry sectors in
Australia including financial services, publishing,
retail, communications, property, clubs and
associations, not-for-profit, utilities, manufacturing,
education and government.
45
Annual Report 2022 Directors’ report – continued
Information on Directors
The directors of the Company at any time during or since the end of the financial year are:
Director
Experience, special responsibilities and other directorships
Geoff Bruce Selig
Executive Chairman
Geoff has over 30 years' experience in the marketing communications sector. Geoff
was managing director of IVE Group prior to moving in to the role of executive
chairman following the Company’s listing on the ASX in December 2015.
Appointed:
10 June 2015
Geoff is a director Caxton Group and Caxton Print Holdings, and also sits on the
board of The Lysicrates Foundation. He was the State President of the NSW Liberal
Party from 2005-8.
Geoff holds a Bachelor of Economics from Macquarie University and is a member of
the Australian Institute of Company Directors.
Gavin Terence Bell
Independent
Non-Executive Director
Gavin is an experienced director, executive and lawyer. Gavin is currently a director
of Smartgroup Corporation Limited (ASX: SIQ) and QANTM Intellectual Property
Limited (ASX: QIP). Prior to becoming a director, Gavin was the CEO of global law
firm Herbert Smith Freehills. He was a partner in the firm for 25 years.
Appointed:
25 November 2015
Gavin holds a Bachelor of Law from the University of Sydney and a Master of
Business Administration (Executive) from the AGSM, University of New South Wales.
Committees: Chair of the Nomination & Remuneration Committee and Member of
the Audit, Risk & Compliance Committee
Sandra Margaret
Hook
Independent
Non-Executive Director
Sandra has over 25 years’ experience in sales and marketing, building and leading
commercially successful businesses, driving growth and leading change. She has a
track record in delivering brand and portfolio strategies, transitioning traditional
organisations in rapidly evolving environments and brings a strong focus on
customer-centric growth and digital transformation at Board level.
Appointed:
1 June 2016
Sandra was formerly Managing Director and CEO of NewsLifeMedia, a division
of News Limited; CEO of News Magazines, and held various senior executive roles
with Australia’s largest media companies including News Limited, Foxtel, Federal
Publishing Company, Murdoch Magazines and Fairfax.
Sandra is currently a non-executive director of MedAdvisor Limited (ASX: MDR),
iCollege Limited (ASX: ICT) and CRC Fight Food Waste. She is also a Director of the
Sydney Harbour Foundation Management Limited. Sandra is a graduate member
of the Australian Institute of Company Directors.
Committee: Member of the Nomination & Remuneration Committee
Paul Stephen Selig
Executive Director
Appointed:
10 June 2015
Paul’s career commenced in banking and treasury management before moving into
the print and marketing communications sector over 25 years ago. He has been
a director of the Company since 2012, and appointed to IVE Group Limited on its
incorporation in 2015. Paul is an experienced director and investor having run the
Caxton Group family office for over 15 years.
Paul is also a director of Caxton Group, Caxton Print Holdings and Caxton Property
Developments. He holds a Bachelor of Economics (Hons) from Macquarie University.
46
IVE Group Limited Director
Experience, special responsibilities and other directorships
James Scott Charles
Todd
Independent
Non-Executive Director
James is an experienced company director, corporate adviser and investor.
He commenced his career in investment banking and has taken active roles
in a range of private and public companies. He was until recently Managing
Director of Wolseley Private Equity, an independent private equity firm he
co-founded in 1999.
Appointed:
10 June 2015
James is also a Non-Executive Director of two other ASX listed companies, Coventry
Group Limited (ASX: CYG), and Bapcor Limited (ASX: BAP).
James holds a Bachelor of Commerce and a Bachelor of Laws from the University
of New South Wales, and a Graduate Diploma of Applied Finance from the
Financial Services Institute of Australasia (FINSIA), where he is a Fellow. He is also a
member of the Australian Institute of Company Directors.
Committees: Member of the Audit, Risk & Compliance Committee and Nomination &
Remuneration Committee
Catherine
Ann Aston
Independent,
Non-Executive Director
Appointed:
15 December 2020
Cathy is an experienced company director with extensive financial, operational
and strategic experience acquired from a 25-year executive career in senior finance,
strategy and management roles both in Australia and Asia.
Cathy spent much of her early career in the telecommunications industry and more
recently she has held a number of senior positions across a range of industries from
financial services, superannuation, telecommunications, government and digital
businesses. She has extensive leadership expertise (CEO/MD/CFO/CMO) as well as
experience in merger & acquisitions and integrations.
Andrew Bird
Independent,
Non-Executive Director
Appointed:
1 April 2022
Cathy is Chair of IMB Bank Ltd and Chair of the Capital and Securitisation
Committee, Non-Executive Director of Integrated Research Ltd (ASX: IRI) and
Chair of the Audit and Risk Committee, and Non-Executive Director of Macquarie
Investment Management Ltd and Chair of the Audit, Risk and Compliance
Committee.
Cathy holds a Bachelor of Economics from Macquarie University and a Master
of Commerce (Accounting and Law) from the University of New South Wales. She
is also a fellow of the Financial Services Institute of Australasia and a graduate
member of the Australian Institute of Company Directors.
Committees: Chair of the Audit, Risk and Compliance Committee, Member of the
Nomination and Remuneration Committee.
Andrew has extensive financial, operational and strategic experience acquired
from a 30-year executive career in consulting, strategy, digital and investment roles
primarily in Australia.
Following the earlier part of his career in management consulting with Booz, Allen
and Hamilton, he joined CCH, a multi-national listed publishing company and ran
one of their business units in Australia. In 1997 Andrew co-founded Aspect Huntley.
This business was acquired by Morningstar in 2006 and Andrew was appointed
CEO for Australia and New Zealand. In 2010 Andrew established his own family
investment firm with a focus on private equity and early-stage investments in
technology and information businesses.
Andrew is currently the Chair of Sharesight Limited and a Director of LegalVision
and Allette Systems.
Andrew holds a Bachelor of Arts from Williams College in Massachusetts, USA and
an MBA from INSEAD Business School in Fontainebleau, France.
Committee: Member of the Nomination & Remuneration Committee
47
Annual Report 2022 48
IVE Group Limited Company Secretaries
Directors’ interests and benefits
Sarah Prince
Sarah was appointed as joint Company Secretary
on 25 November 2020. Sarah is an experienced
Company Secretary and has worked with ASX-
listed entities in the biotech, technology, managed
funds, legal and mining and resources industries.
Sarah holds a Bachelor of Arts, Bachelor of Laws
and a Graduate Diploma of Applied Corporate
Governance. Sarah is a member of The Governance
Institute of Australia and is admitted as a Solicitor
of the Supreme Court of New South Wales.
Darren Dunkley
Darren has been the Chief Financial Officer (CFO)
of the Group since 2012, and has been with IVE for
over 15 years. He has over 25 years of experience
with a range of blue chip companies including Sharp
Corporation, ANZ Banking Group Ltd and Nashua
Australia. Darren has a Bachelor of Commerce
majoring in Accounting and is a CPA.
The relevant interests of each director in the shares
of the Company as at the date of this report are
disclosed in the Remuneration Report (on page 67).
Environmental regulation
The Group’s operation is not subject to any
significant environmental regulations under either
Commonwealth or State legislation. However,
the Board believes that the Group has adequate
systems in place for the management of its
environmental requirements and is not aware of any
breach of those environmental requirements as they
may apply to the Group during the period covered by
this report.
Meetings of Directors
The number of directors’ meetings (including meetings of committees of directors) and number of meetings
attended by each of the directors of the Company during the financial year are:
Board
Audit, Risk &
Compliance
Committee (ARCC)
Nominations &
Remuneration
Committee (NRC)
Other
Committees
Eligible Attended Eligible Attended Eligible Attended Eligible Attended
Geoff Selig
Gavin Bell
Sandra Hook
Paul Selig
James Todd
Catherine Aston
Andrew Bird*
15
15
15
15
15
15
4
14
15
15
15
15
15
4
–
4
–
–
4
4
–
–
4
–
–
4
4
–
–
3
3
–
3
–
–
–
3
3
–
3
–
–
2
–
–
–
–
2
–
2
–
–
–
–
2
–
* Andrew Bird was appointed as a director of the Company on 1 April 2022.
49
Annual Report 2022 Directors’ report – continued
Events subsequent to
reporting date
On 14 September 2022 (following ACCC clearance
on 30 August 2022), the Group completed the highly
accretive and strategically attractive acquisition
of substantially all of the printing and finishing
assets of Ovato, IVE’s largest print competitor. The
net purchase consideration (including transaction
costs) of $16m was funded from existing facilities,
with integration and associated capital expenditure
costs over the coming 12-18 months expected to be
approximately $22m.
To preserve our balance sheet strength and
to ensure our capacity to fund future growth
initiatives post the Ovato acquisition, the Company
successfully completed a $19.3m capital raising
(8.58m shares issued at $2.25 per share) in October
2022. The capital raising strengthened IVE’s
institutional shareholder base, further increasing
liquidity in the market for IGL shares.
Aside from the above, there has not arisen in the
interval between the end of the financial year and
the date of this report any item, transaction or
event of a material and unusual nature likely, in the
opinion of the directors of the Company, to affect
significantly the operations of the Group, the results
of those operations, or the state of affairs of the
Group, in future financial years.
Likely developments
Information about likely developments in the
operations of the Group and the expected results of
those operations in future financial years has not
been included in this report because disclosure of the
information would be likely to result in unreasonable
prejudice to the Group.
Indemnification and insurance of
officers
During the financial year, the Group paid a premium
insuring the directors of the Group, the company
secretaries, and executive officers to the extent
permitted by the Corporations Act 2001.
The Group indemnified its directors and company
secretaries to the extent permitted by law against a
liability incurred.
Indemnification and insurance of
auditor
During or since the end of the financial year the
Group has not indemnified or made a relevant
agreement to indemnify the auditor of the Group
against a liability incurred as the auditor. In
addition, the Group has not paid, or agreed to pay, a
premium in respect of a contract insuring against a
liability incurred by the auditor.
Insurance premiums
During the financial year the Company has paid
premiums in respect of directors’ and officers’
liability insurance contracts for the year ended
30 June 2022. In addition, since the financial year,
the Company paid or agreed to pay premiums in
respect of such insurance contracts for the year
ending 30 June 2023. Such insurance contracts
insure against certain liability (subject to specific
exclusions) for persons who are or have been
directors or executive officers of the Company.
The directors have not included details of the
nature of the liabilities covered or the amount
of the premiums paid in respect of the directors’
and officers’ liability insurance contracts, as such
disclosure is prohibited under the terms of the
contract.
50
IVE Group Limited Directors’ report – continued
Remuneration Report
Introduction
This Remuneration Report (Report), which has been
audited, describes the Key Management Personnel
(KMP) remuneration arrangements for the 12 months
ended 30 June 2022 for IVE Group, in accordance
with the Corporations Act 2001 (Cth) (Corporations
Act) and its regulations.
The Report is designed to provide shareholders
with an understanding of IVE Group’s remuneration
philosophy and the link between this philosophy and
IVE Group’s strategy and performance.
The Board is committed to having remuneration
policies and practices which are designed to
ensure remuneration is equitable, competitive and
reasonable to attract and retain key talent who
are critical to IVE Group’s business success, align
with long-term interests of the Company and its
shareholders, and to ensure that any incentives
do not reward conduct that is contrary to the
Company’s values or risk appetite. IVE Group will
align remuneration to strategies and business
objectives and provide a balance between fixed
and variable rewards to ensure that rewards are
given for performance. Remuneration structures are
designed to be transparent to employees and other
stakeholders and easily understood. In addition,
the remuneration framework is designed to be
acceptable to shareholders by being consistent with
market practice and creating value for shareholders.
The 2022 financial year (FY22) saw the continuation
of the economic, social and health impacts of the
COVID-19 pandemic in addition to ongoing supply
chain challenges. Our shareholders, employees
and clients continued to be impacted, and market
conditions remained challenging. In this context,
the financial and non-financial performance of the
Company during 2022 was strong.
The Board is mindful that the unprecedented impact
of COVID-19 has affected IVE Group’s people in
many different ways and are extremely proud of the
manner in which its people rose to the challenges
presented to continue to focus on delivering excellent
service and products to its customers. In recognition,
all staff, other than the Directors, were offered 500
shares in IVE Group for nil consideration in September
2021. These shares were offered in recognition of
staff efforts and sacrifices during the COVID-19
pandemic.
This performance of the Company and the
leadership shown by the leadership team is
reflected in the remuneration outcomes for FY22.
52
In the context of COVID-19 and other challenging
macro factors the company performed very strongly
during FY22.
The Company achieved an EBITDA result of $96.6m
on an underlying basis post AASB 16. This compares
to FY21 EBITDA of $85.3m (excluding JobKeeper).
This resulted in the target for the payment of the key
financial component of the Short Term Incentive (STI)
being achieved. Performance against non-financial
performance measures and the overall performance
of the company was also very strong. This resulted
in the payment of 100% of the STI to each of the
Executive Chairman, the CEO and the CFO.
The 2019 Long-Term Incentive (LTI) grant reached
the end of its three-year vesting period on 30 June
2022. None of the relevant rights vested as the TSR
and EPS performance conditions were not met. The
EPS condition, in particular, was heavily influenced
by the impact of the pandemic across the most of
the vesting period.
At the 2021 Annual General Meeting, 97.59% of the
shares voted at the meeting were cast in favour of
the adoption of the Remuneration Report for the
year ended 30 June 2021.
The Board will continue to review the effectiveness
of the Company’s remuneration practices and to
ensure they are appropriately benchmarked and
they align with strategic performance objectives,
to appropriately rewards its executives and deliver
shareholder value.
The Board considers that the members of the
Nomination and Remuneration Committee (NRC)
possess the necessary expertise and independence
to fulfil their responsibilities and are able to access
independent experts in remuneration for advice should
this be required. The governance processes in relation
to remuneration are working effectively and the Board
trusts that shareholders find this Report useful and
informative.
As outlined in the Operating and Financial Review,
the FY22 financial performance continued to be
impacted by the unprecedented global COVID-19
pandemic, in addition to ongoing global supply
chain issues and inventory shortages. This is in the
context of a competitive market and challenging
macro-economic environment. The Board believes
that the remuneration outcomes for the Executive
KMP for the 2022 financial year reflect this and
satisfy the goals of the remuneration framework.
IVE Group Limited The remuneration report contains the following
sections:
Overview of IVE Group’s remuneration
framework for Executive KMP
> Introduction
> Persons covered by this Report
> Overview of the remuneration framework for
Executive KMPs
The objective of IVE Group’s remuneration philosophy
is to ensure Executive KMP are rewarded for
business performance and retained to continue to
grow the business. The objectives underpinning the
remuneration philosophy are that remuneration will:
> Linking reward and performance
> Be competitive and reasonable to attract and
> Grant of Performance Share Rights and the Long-
retain key talent;
Term Incentive Plan
> Align to IVE Group’s strategies and business
> Non-Executive Director remuneration framework
> Contractual arrangements with Executive KMPs
> Details of remuneration for KMPs
> Rights Granted to Executive KMP
> Directors and Executive KMP shareholdings in IVE
Group Limited
> Other statutory disclosures
objectives;
> Provide a balance between fixed and variable
rewards;
> Be transparent and easily understood; and
> Be acceptable to shareholders
A key factor in IVE Group’s business success will be
being able to attract and retain key talent and
the remuneration framework has been designed to
enable this.
Who this report covers
This report covers Non-Executive Directors and Executive KMPs (collectively KMP) and includes:
Non-Executive Directors
Gavin Bell
Sandra Hook
James Todd
Role
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Catherine (Cathy) Aston
Independent Non-Executive Director
Andrew Bird
Independent Non-Executive Director
(appointed 1 April 2022)
Executive Key Management Personnel
Geoff Selig
Paul Selig
Matthew (Matt) Aitken
Darren Dunkley
Executive Chairman
Executive Director
Chief Executive Officer
Chief Financial Officer & Company Secretary
53
Annual Report 2022 FY22. The NRC has determined that there will be no
further changes to fixed remuneration for FY23.
Fixed remuneration is the major component of
the Executive Chairman’s remuneration. Through
his family arrangements, he has an interest in a
substantial shareholding in the Company. This
provides significant alignment with shareholders’
experience.
Short Term Incentive (STI)
The NRC reviews the achievement of STI targets at
the end of each year and sets STI targets for the
following year. The STI is the main tool for rewarding
the current year’s performance of the business.
In FY22, Executive KMP (excluding Paul Selig) were
eligible to receive an STI payment of between 21%
and 47% of fixed remuneration. The STI is a cash
incentive payment and full payment is conditional
on achievement of the following:
> The key financial performance target for the
Group, specifically, pro-forma Earnings before
Interest, Tax, Depreciation and Amortisation
(EBITDA) for the year in review;
> Group level Workplace Health and Safety targets
for the year in review;
> Individual financial and non-financial
performance targets relevant to the individual
Executive KMP which includes strategic and other
measurements. Individual measurements vary
depending on the nature and specific strategic
areas attributable to the Executive KMP to align
with the IVE Group’s strategic objectives.
The Board determines the STI payment for Executive
KMP by allocating a percentage weighting across
the above measures. At the end of the financial year,
the Board assesses the individual and collective
performance against the STI measures and retains
an overall discretion in relation to the assessment
of performance, to take into account, for example,
overall performance and any changes to priorities.
Directors’ report – continued
Governance
IVE Group has established the NRC whose role
is to assist the Board with its remuneration
responsibilities, including reviewing and
recommending to the Board for approval,
arrangements for executives, Executive Directors
and Non-Executive Directors. The NRC has three
members, all of whom are independent, including an
independent committee chair. The members of the
NRC have appropriate qualifications and experience
to enable the NRC to fulfil its role.
In addition, the Board has appointed Gavin Bell as
the Lead Independent Director to fulfil the role of
chair whenever the Executive Chairman is conflicted
and to assist in reviewing the Executive Chairman’s
performance as part of the Board performance
evaluation process.
External remuneration consultants
The Terms of Reference for the NRC requires that any
remuneration consultants engaged be appointed by
the NRC. No remuneration consultants were engaged
in FY22.
Any advice that may be received from remuneration
consultants in future will be carefully considered by
the NRC to ensure it is given free of undue influence
by IVE Group executives.
Structure of Remuneration
The remuneration framework for Executive KMP
includes both fixed and performance-based pay.
Fixed remuneration
Fixed remuneration is set using a combination
of historical levels and sector comparisons.
Fixed remuneration includes base pay, statutory
contributions for superannuation and non-
monetary benefits. Paying Executive KMP the right
fixed remuneration is a key tool in attracting and
retaining the best talent.
The NRC reviews the fixed remuneration of Executive
KMP on an annual basis. Matt Aitken’s fixed
remuneration was increased effective 1 July 2022
from $640,000 to $700,000 p.a. and Darren Dunkley’s
fixed remuneration increased effective 1 April 2022
from $420,000 to $520,000 p.a. No other changes
were made to the fixed remuneration for KMP during
54
IVE Group Limited The percentage weightings across financial and non-financial targets, and the assessed performance
achieved during FY22 for each of the KMP to whom an STI payment was made was as follows.
KMP
Group EBITDA
target
Individual
financial targets
Non-financial
targets
Total
STI
achieved
%
Target
%
Achieved
%
Target
%
Achieved
%
Target
%
Achieved
Geoff Selig
Matt Aitken
40.00
40.00
40.00
40.00
0.00
0.00
0.00
0.00
60.00
60.00
100.00
100.00%
60.00
60.00
100.00
100.00%
Darren Dunkley
40.00
40.00
17.00
17.00
43.00
43.00
100.00
100.00%
Non-financial KPIs for KMP
Long-Term Incentive (LTI)
The non-financial performance measures for the
Executive KMP were as follows:
> Geoff Selig, Executive Chairman
Effective leadership of the Group and Board, lead
culture survey and develop plan to address any
identified issues, develop plan to increase diversity
among senior and middle management, enhance
investor relations, successful development
and implementation of M&A growth strategy,
establish ESG strategy and framework, successful
launch and deployment of Lasoo and workplace
health and safety performance.
> Matt Aitken, Chief Executive Officer
Effective leadership of the business, lead culture
survey and develop plan to address any identified
issues, develop plan to increase diversity among
senior and middle management, successful
development and implementation of M&A growth
strategy, establish ESG strategy and framework,
successful launch and deployment of Lasoo and
workplace health and safety performance.
> Darren Dunkley, Chief Financial Officer
Effective leadership of Group financial oversight
and reporting, enhance investor relations;
successful development and implementation of
M&A growth strategy, establish ESG strategy
and framework, effective management of finance
ERP projects and successful renegotiation of the
banking facility and workplace health and safety
performance.
The FY22 Actual STI and FY23 maximum STI
amounts for Executive KMP are shown in the table on
page 57.
The Board has established an LTI Plan as outlined in
prior years’ Remuneration Reports and outlined
in the section in this Report entitled ‘Share-based
remuneration’. The LTI Plan was last approved
by shareholders at IVE’s 2021 Annual General
Meeting (AGM). The LTI Plan is largely used to reward
long-term sustainable performance.
The LTI Plan facilitates the offer of Performance
Share Rights (Rights) to key executives and the Rights
vest and convert to ordinary shares on a one-for-
one basis, subject to meeting specific performance
conditions. The current performance conditions are:
> Relative total shareholder return (TSR);
> Compound annual earnings per share growth
based on NPAT (EPS) over a three-year
Performance Period and there is no-retesting of
performance hurdles
The LTI Plan, including the combination of TSR and
EPS hurdles, has been designed commensurate
with IVE Group’s long-term strategic objectives so
that Executive KMP will only receive a substantial
component of LTI when there has been strong
absolute and relative performance.
The grant of Rights during FY22 to the Executive
Chairman was approved by shareholders at the
2021 AGM.
The Board has the discretion to amend the future
vesting terms and performance hurdles at the
grant of each award of Rights to ensure that they
are aligned to market practice and ensure the best
outcome for IVE Group. The Board also has the
discretion to change the LTI Plan and to determine
whether LTI grants will be made in future years.
55
Annual Report 2022 Directors’ report – continued
The Board makes changes to the level of LTI to grant
each year based on reviews of total remuneration
packages for executives. The NRC decided not
increase the level of long-term incentives for FY23.
They will remain in-line with the same quantum
agreed in respect of FY19, FY20, FY21 and FY22.
The NRC believe that the issue of long-term equity
incentivises and aligns management’s remuneration
with shareholders’ longer-term interests.
The staged approach to executive remuneration over
recent years has led to the current level of executive
remuneration which the Board feels is appropriate
in the challenging and competitive sector in
which the Group operates. All rewards, other than
fixed remuneration, are subject to achieving the
performance conditions outlined above.
Assessment of performance
Performance of Executive KMPs is assessed against
the agreed non-financial and financial targets
on a regular basis. Based on this assessment, the
Executive Chairman will make a recommendation
to the NRC for Board approval of the amount of STI
and LTI to award (as applicable) to each KMP, other
than the Executive Chairman. Recommendations in
relation to the Executive Chairman are made by the
chair of the NRC, for Board approval.
The NRC assesses the actual performance of IVE
Group and the Executive Chairman against the
agreed targets and recommends the amount of the
STI and LTI (as applicable) to be paid for approval by
the Board.
Executive KMP remuneration – paid, vested and targets
The table below presents the STI paid and LTI vested to Executive KMP during FY21 and FY22. Further detail on
remuneration is included in the tables at the end of this Report.
All in $
STI
LTI – Number of Rights
Geoff Selig
FY22
200,000
200,000
Maximum
Actual
Granted
168,067
FY21
200,000
170,000
384,615
Matt Aitken
FY22
300,000
300,000
168,067
FY21
300,000
270,000
384,615
Darren Dunkley
FY22
180,000
180,000
126,050
FY21
180,000
162,000
288,461
Vested
Not applicable
(3-year vesting)
Not applicable
(3-year vesting)
Not applicable
(3-year vesting)
Not applicable
(3-year vesting)
Not applicable
(3-year vesting)
Not applicable
(3-year vesting)
Further detail on the value of the Rights granted is included in the tables at the end of this Report.
56
IVE Group Limited Proportions of fixed and variable remuneration
The Board and NRC consider annually the
fixed remuneration and proportion of variable
remuneration that is dependent on performance
(“at risk”) for each Executive KMP. The relative
proportions of fixed versus variable pay (as a
percentage of total remuneration) received by
Executive KMP during the past two financial periods
and proposed for the next financial period are
shown below. This chart shows the staged process
the NRC has undertaken to increase the proportion
of at-risk remuneration.
As shown below, no changes are proposed to
Executive KMP remuneration for FY23 following the
assessment of performance, other than the increase
to the CEO’s fixed remuneration effective 1 July
2022. There were also no changes during FY22 other
than increases to the FY21 STI of the CEO and the
CFO which were designed to incentivise performance
in what remains an uncertain period, and an
increase to the CFO’s fixed remuneration.
All in $
Fixed Remuneration1
STI
FY21
Actual
FY22
Actual
FY23
Agreed
FY21
Actual
FY22
Actual
FY23
Maximum
FY21
Grant
LTI
FY22
Grant
FY23
Grant2
Geoff
Selig
Matt
Aitken
Darren
Dunkley
952,000
952,000
952,000
170,000
200,000
200,000
200,000
200,000
200,0003
640,000
640,810
700,000
270,000
300,000
300,000
200,000
200,000
200,000
420,000
450,483
520,000
162,000
180,000
180,000
150,000
150,000
150,000
Paul Selig4
330,000
330,000
330,000
0
0
0
N/A
N/A
N/A
1 Fixed remuneration includes superannuation.
2 LTI grant is the $ value of the grant approved by the Board.
3 FY23 LTI grant for Geoff Selig is subject to shareholder approval.
4 Due to the specific nature of his role, Paul Selig does not participate in the LTI Plan.
The Board uses a fair value method to determine
the value of performance rights issued under the LTI
Plan, which was last approved by shareholders in
2021. This is consistent with the required accounting
treatment of rights and the basis on which the KMP
remuneration arrangements were agreed. The Board
recognises that some stakeholders advocate the use
of the face value method to determine the value of
performance rights. A face value approach does not
take into account the risk that rights may not vest
and that the rights are not entitled to dividends. In
a year where there is no change to remuneration
arrangements and no LTI award vested, a move to
a face value approach would effectively reduce the
Executive KMP’s remuneration.
The Executive KMPs’ remuneration arrangements
were agreed assuming a fair value approach. The
FY23 LTI will again use a fair valuation calculation
to determine the quantity of performance rights to
be granted to Executive KMP. Given the significant
volatility in the Company’s share price since March
2020 to the date of this report as a result of the
COVID-19 pandemic, the Board agreed that the
measurement date for the fair valuation report will
be based on the volume weighted average price
of the 20 trading days following the release of the
Company’s full year 2022 results, as was done in
2020 and 2021. The Board believes that this will
allow the market to absorb the full year results and
align the fair valuation closer to the date of grant,
noting that a different valuation methodology is
applied per AASB 2 share-based payments.
57
Annual Report 2022 Directors’ report – continued
If a face value method were used, the FY22 LTI grant for each of the Executive KMP would be as indicated in
the table below. The number of performance rights to be granted under the FY23 LTI will be determined and
reported in the 2023 remuneration report.
FY22 Fair Value
(No. of rights)
FY22 Face Value1
(No. of rights)
168,067
168,067
126,050
0
137,931
137,931
103,448
N/A
Geoff Selig
Matt Aitken
Darren Dunkley
Paul Selig
1 Based on the closing share price on 1 July 2021 of $1.45 per share.
How reward is linked to performance
Performance indicators and link to performance
Notwithstanding the impacts of the unprecedented COVID-19 pandemic during the 2020, 2021 and 2022
financial years, IVE Group’s financial performance has been strong since listing on the ASX in December 2015.
Performance of the business is reflected in the outcome of the variable components to the remuneration
framework:
> Full STI payments are only made if Executive KMP meet agreed financial and non-financial targets for the
year in review (and the FY20 STI payment was suspended due to the impact of COVID-19); and
> LTI grants only vest if IVE Group achieves the targets set for TSR and EPS over a three-year performance
period
Performance rights granted to KMP in 2018 under the FY19 LTI reached their vesting date during FY22. Of these,
NIL performance rights granted to KMP vested and 359,475 unvested performance rights lapsed in accordance
with the IVE Group Equity Incentive Plan rules as set out below:
Total LTI Grant
FY19
60% of
Performance
Share Rights
Earnings Per
Share Target
(EPS)
40% of
Performance
Share Rights
Relative Total
Shareholder
Return (TSR)
Vested
Lapsed
Geoff Selig
Matt Aitken
Darren Dunkley
Paul Selig
130,718
130,718
98,039
N/A
78,431
78,431
58,823
N/A
52,287
52,287
39,216
N/A
359,475
215,685
143,790
0
0
0
N/A
0
130,718
130,718
98,039
N/A
359,475
58
IVE Group Limited The relevant performance conditions were as follows:
60% of Performance Share Rights
Earnings Per Share Target (EPS)
40% of Performance Share Rights
Relative Total Shareholder Return (TSR)
EPS Target 7.75%
Performance
Share Rights
Granted
Vested
Less than 90% of target
achieved
90-99% of target
achieved
Target achieved or
exceeded
Nil
80%
100%
Company ranks below
50th percentile
Company ranks at the
50th percentile
Company ranks
between the 50th and
75th percentile
Company ranks at or
above 75th percentile
Nil
50%
Straight line vesting
100%
Accumulated pro-forma EPS growth over the three-year vesting period between FY19 to FY21 was less than
90% of the EPS Target. Accordingly, none of the EPS tranche of performance rights vested.
IVE Group was ranked as 14 (43.48 percentile) compared to the relevant FY19 LTI peer group as at 30 June
2022. Accordingly, none of the TSR tranche of performance rights vested.
Unvested rights were forfeited in accordance with the LTI plan rules.
Key financial metrics over the last five years are shown below:
FY18
FY193
FY202
FY21
Revenue ($m)
EBITDA ($m)
Net profit after
tax ($m)
Dividend payment
(CPS)
Dividend payout
ratio4
Share price
change ($)1
EPS (NPAT)
EPS (NPATA)
695.4
73.2
32.4
15.5
723.6
82.0
33.0
16.3
71%
71%
677.4
57.3
18.5
0.0
0%
FY22 Pre
AASB 16
FY22 Post
AASB 16
759.0
75.1
33.4
16.5
759.0
96.6
33.1
16.5
656.7
59.3
19.9
14.0
67%
72%
72%
+0.162
(0.23)
(1.26)
+0.655
+0.28
0.227
0.252
0.228
0.253
0.125
0.152
0.135
0.162
0.231
0.254
+0.28
0.231
0.254
The above results are prepared on an underlying continuing business basis, pre AASB 16, FY22 are also presented on a post
AASB 16 basis. Underlying continuing business basis results exclude all non-operating items (including JobKeeper). This better
reflects the underlying operating performance and is consistent with guidance.
1 Calculated as close price on 30 June for the applicable year.
2 FY20 revenue, EBITDA and NPAT have been updated on a continuing business basis i.e. excluding TeleFundraising for FY21
comparative purposes.
3 FY19 and prior year’s revenue, EBITDA, NPAT and EPS have not been adjusted for TeleFundraising divestment in FY21.
4 FY21 dividend payout ratio is based on underlying NPAT including JobKeeper.
59
Annual Report 2022 Directors’ report – continued
Grant of Performance Share Rights
During the year, the Company made offers of Rights under the LTI Plan to the Senior Leadership Team with
clear performance measures.
On 25 November 2021, offers were made granting 823,526 performance rights under the Senior Leadership
Team Plan. Of these, 168,067 were granted to Geoff Selig for which approval for the issue was obtained under
ASX Listing Rule 10.14 at the 2021 Annual General Meeting. These Rights vest following the release of the FY24
financial results if specified performance conditions are met during the Performance Period which is 1 July
2021 to 30 June 2024.
In total there were 3,355,195 unvested Rights at 30 June 2022 from the FY20, FY21 and FY22 offers.
There were no offers of options during the year and there are no unvested options.
The terms of the Equity Incentive Plan which provide the framework under which the LTI grants were made in
FY18, FY19, FY20, FY21 are as follows:
Feature
Terms of the IVE Group Equity Incentive Plan
Type of security
Valuation
Performance Share Rights which are an entitlement to receive fully paid ordinary
IVE Group Limited shares (as traded on the ASX) on a one-for-one basis.
The number of Performance Share Rights for each KMP is calculated by dividing the
allocated value of the LTI award for that KMP by the fair value of a Performance
Share Right. The fair value is calculated using a Monte Carlo simulation approach
for the Awards subject to the Relative TSR condition and a risk neutral assumption
is used the value the Awards subject to the EPS condition.
For the Executive Chairman and Managing Director (if applicable), the LTI grant, as
recommended by the Board, will be submitted for approval by shareholders at the
relevant Annual General Meeting, as required by the ASX Listing Rules.
Performance Period
The Performance Period is the three-year period 1 July to 30 June inclusive.
Performance
Conditions
The number of Performance Share Rights that may vest will be determined by
reference to:
> Earnings Per Share (EPS) compound annual growth over the Performance Period.
EPS growth will be calculated as IVE Group’s underlying Net Profit After Tax
adjusted for amortisation of customer contracts (NPATA) divided by the undiluted
weighted average shares on issue throughout the Performance Period, using the
following formula:
EPS CAGR = 3 ( ————————––– ) — 1
Year 3 EPS
Year 0 EPS
(Benchmark 1); and
> Relative Total Shareholder Return (TSR) performance of the Company in
comparison to similar companies in a peer group determined by the Board. The
peer group for the FY20 offer is the ASX Small Ordinaries Index. The TSR of each
company will be measured from the start of the Performance Period to the end of
the Performance Period (Benchmark 2),
(collectively the Performance Conditions).
Together Benchmark 1 and Benchmark 2 comprise the total Performance
Conditions but act independently relative to their specific target component of
60% and 40% of Performance Share Rights, respectively.
Re-testing
There is no re-testing. Any unvested LTI after the test at the end of the
Performance Period will lapse immediately.
60
IVE Group Limited
Feature
Forfeiture
Clawback
Terms of the IVE Group Equity Incentive Plan
All Rights will lapse if the participant elects to cease employment with IVE Group
prior to the Conversion Date (being the date that Performance Share Rights convert
to shares).
Rights will immediately lapse if the participant is dismissed or removed from office
as an employee for any reason which entitles IVE Group to dismiss the participant
without notice or if the participant acts fraudulently, dishonestly or in breach of
their obligations to the Company.
The only exception to the lapse of rights if for a Good Leaver reason detailed below:
> Any unvested Rights will not lapse if the participant’s employment with IVE
Group ceases due to death, ill-health, total permanent disability or sale of the
business in which they are employed.
> Rights for employees who cease employment due to death will vest in full upon
cessation.
> Rights for other good leavers will remain on foot and will be tested against the
Performance Conditions as at the Vesting Date, vesting on a pro-rata basis.
The Board has discretion to allow vesting for other reasons, such as retirement or
redundancy.
The Board has broad “clawback” powers if, amongst other things, the participant
has acted fraudulently or dishonestly, engaged in gross misconduct or has acted
in a manner that has brought the Company into disrepute, or there is a material
financial mis-statement, or the Company is required or entitled under law or
company policy to reclaim remuneration from the participant, or the participant’s
entitlements vest as a result of the fraud, dishonesty or breach of obligations of
any other person and the Board is of the opinion that the incentives would not have
otherwise vested.
The terms of offer made under the IVE Group Equity Incentive Plan were amended slightly in FY22 with regards
to Benchmark 1. Benchmark 1 for the FY22 offer was determined as follows:
Earnings Per Share (EPS) compound annual growth over the Performance Period. EPS growth will be calculated
as IVE Group’s underlying Net Profit After Tax (NPAT) divided by the undiluted weighted average shares on issue
throughout the Performance Period, using the following formula:
EPS CAGR = 3 ( ————————––– ) — 1
Year 3 EPS
Year 0 EPS
TSR Peer Group for FY22 Offer
As with FY21, the peer group for FY22 differed to previous years where the Board sought to include similar
companies and, in addition to their size, considered characteristics such as being a direct competitor, operating
in a similar industry or sector, generating revenue in Australia only, being exposed to domestic economic
conditions including consumer spending and marketing spend.
Due to changes in the market and the lack of material numbers of useful comparator companies, the peer
group chosen for the FY 2022 grant are the companies who are included in the ASX Small Ordinaries Index at
the commencement of the performance period, being 1 July 2021.
Non-Executive Director Remuneration
Non-Executive Directors enter into service agreements through letters of appointment which are not subject to
a fixed term. Non-Executive Directors receive a fee for their contribution as Directors. Fees are determined with
reference to the demands of the role and the responsibilities carried out by Directors. The fee setting process
also takes into account market levels, the need to attract high quality Directors and the size and complexity of
the Company.
61
Annual Report 2022
Directors’ report – continued
Directors receive fees for their role as members of the Board and, where applicable, for additional
responsibilities. Non-Executive Directors do not receive additional fees for being a Chair or member of a Board
Committee. Non-Executive Directors do not receive any variable or performance-based remuneration. Where
Directors are required to provide additional services, these are paid on a fixed fee basis or determined on an
hourly basis depending on the nature of the service. There were no additional services provided in FY22 by Non-
Executive Directors.
During FY22, the Board did not increase fees paid to Non-Executive Directors. It should also be noted in FY2020
the Non-Executive Directors agreed to a temporary fee reduction of 50% applying to the three months ended
30 June 2020, as a result of COVID-19. An increase of $5,000 per Non-Executive director has been approved
for FY23 and will be reflected in the 2023 Remuneration Report. The annual fees provided to Non-Executive
Directors for FY22 are shown below (inclusive of superannuation):
Chair fee
Non-Executive Director fee (effective since 1 July 2018)
N/A as Executive Chairman
$105,000
The total Non-Executive Director fee pool has a maximum value of $1 million per annum. The total amount
paid to Non-Executive directors in FY22 was $446,250, being 44.6% of the approved fee pool. There is no intent
to seek approval to increase the Non-Executive Director fee pool at the 2022 AGM.
Non-Executive Directors do not receive fees that are contingent on performance, shares in return for their
services, retirements benefits (other than statutory superannuation) or termination benefits.
Executive Directors are not remunerated separately for acting as Directors.
Directors are not required under the Constitution or any other Board policy to hold any shares in IVE Group.
The remuneration paid to Non-Executive Directors is detailed in the tables later in this Report.
Contractual arrangements with Executive KMPs
Remuneration and other conditions of employment are set out in the Executive KMPs employment contracts.
The key elements of these employment contracts are summarised below
Name:
Title:
Geoff Selig
Executive Chairman
Terms of Agreement:
No fixed term – subject to termination provisions detailed below
Details:
Annual remuneration includes cash salary, superannuation and non-cash benefits
Termination:
Incentives – eligible to participate in short-term incentive and equity
remuneration plans
Termination – 12 months’ written notice (except in certain circumstances, such
as where committed any breach or material neglect of the material terms of his
contract of employment, or any act of serious or wilful misconduct) by Company or
employee.
All payments on termination will be subject to the termination benefits cap under
the Corporations Act 2001 in the absence of shareholder approval.
Post-employment – 12 months’ restraint provisions
62
IVE Group Limited
Name:
Title:
Paul Selig
Executive Director
Terms of Agreement:
No fixed term – subject to termination provisions detailed below
Details:
Annual remuneration includes cash salary, superannuation and non-cash benefits
Termination:
Incentives – discretionary bonus
Termination – 3 months’ written notice (except in certain circumstances, such as
where committed any breach or material neglect of the material terms of his
contract of employment, or any act of serious or wilful misconduct) by Company or
employee.
All payments on termination will be subject to the termination benefits cap under
the Corporations Act 2001 in the absence of shareholder approval.
Name:
Title:
Post-employment – 12 months’ restraint provisions.
Matt Aitken
Chief Executive Officer (appointed 5 August 2019)
Chief Operating Officer (ceased 5 August 2019)
Terms of Agreement:
No fixed term – subject to termination provisions detailed below
Details:
Annual remuneration includes cash salary, superannuation and non-cash benefits
Termination:
Incentives – eligible to participate in short-term incentive and equity remuneration plans
Termination – 9 months’ written notice (except in certain circumstances, such as
where committed any breach or material neglect of the material terms of his
contract of employment, or any act of serious or wilful misconduct) by Company or
employee.
All payments on termination will be subject to the termination benefits cap under
the Corporations Act 2001 in the absence of shareholder approval.
Post-employment – 3 months’ restraint provisions.
Redundancy:
6 months’ pay in circumstance where employment is terminated due to redundancy.
Name:
Title:
Darren Dunkley
Chief Financial Officer
Terms of Agreement:
No fixed term – subject to termination provisions detailed below
Details:
Annual remuneration includes cash salary, superannuation and non-cash benefits
Termination:
Incentives – eligible to participate in short-term incentive and equity remuneration
plans
Termination – 6 months’ written notice (except in certain circumstances, such as
where committed any breach or material neglect of the material terms of his
contract of employment, or any act of serious or wilful misconduct) by Company
or employee.
All payments on termination will be subject to the termination benefits cap under
the Corporations Act 2001 in the absence of shareholder approval.
Post-employment – 3 months’ restraint provisions.
Redundancy:
6 months’ pay in circumstance where employment is terminated due to redundancy.
63
Annual Report 2022
Directors’ report – continued
Details of Remuneration
The table below provides remuneration prepared for on a statutory basis for directors and Executive KMPs year
ended 30 June 2022 (except as noted below)
Fixed Remuneration
Variable
Remuneration
Name
Year
Cash,
salary
and fees4
Super-
annuation
Other
long term
benefits
Short term
incentive
Fair value
of LTI
award5
Total
Total
performance
related
Percentage
performance
related
Executive Directors
Geoff Selig
Paul Selig
2022
2021
2022
2021
928,432
930,306
306,432
308,306
23,568
21,694
23,568
21,694
15,505 200,000
15,505 170,000
-
-
-
-
63,263 1,230,768
58,556 1,196,061
330,000
330,000
-
-
263,263
228,556
-
-
21.4%
19.1%
0.0%
0.0%
Non-Executive Directors
Gavin Bell
Carole
Campbell1
2022
2021
2022
105,000
105,000
-
-
-
-
Sandra
Hook
James
Todd
Cathy
Aston2
Andrew
Bird3
2021
38,479
3,656
2022
95,455
9,546
2021
95,890
9,110
2022
95,455
9,546
2021
95,890
9,118
2022
95,455
9,546
2021
51,989
4,939
2022
23,864
2,386
2021
-
-
Other Executive KMP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
105,000
105,000
0
42,135
105,000
105,000
105,000
105,008
105,000
56,928
26,250
-
-
-
-
-
-
-
-
-
-
-
-
-
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Matt
Aitken6
Darren
Dunkley6
2022
617,242
23,568
10,273 300,000
63,263 1,014,346
363,263
35.8%
2021
618,306
21,694
10,273 270,000
60,041
980,314
330,041
33.7%
2022
426,915
23,568
8,244 180,000
45,367
684,094
225,367
32.9%
2021
403,131
21,694
6,638 162,000
45,155
638,618
207,155
32.4%
1 Carole Campbell resigned effective 25 November 2020.
2 Cathy Aston was appointed as a director on 15 December 2020.
3 Andrew Bird was appointed as a director on 1 April 2022.
4 Cash, salary and fees includes annual leave and long service leave.
5 Fair value of LTI reflects accounting impacts during period, NIL shares actually vested/paid.
6 Matt Aitken and Darren Dunkley each received 500 shares (fair value $810) on 23 September 2021 for NIL consideration
as part of a rewards scheme offered to all IVE Group employees, other than executive directors.
64
IVE Group Limited Rights granted to Executive KMP
FY22
KMP
Number of
rights granted
in FY22
Vesting
conditions
Grant date
Fair value at
grant date
Expiry date
Geoff Selig
168,067
Matt
Aitken
168,067
Darren
Dunkley
126,050
Relative TSR
and Compound
annual EPS
growth over
3 years
Relative TSR
and Compound
annual EPS
growth over
3 years
Relative TSR
and Compound
annual EPS
growth over
3 years
10 December
2021
$200,000
10 December
2021
$200,000
10 December
2021
$150,000
After vesting
following
release of FY24
financial results.
Any unvested
Rights expire
After vesting
following
release of FY24
financial results
Any unvested
Rights expire
After vesting
following
release of FY24
financial results
Any unvested
Rights expire
FY21
KMP
Number of
rights granted
in FY21
Vesting
conditions
Grant date
Fair value at
grant date
Expiry date
Geoff Selig
384,615
Matt
Aitken
384,615
Darren
Dunkley
288,261
Relative TSR
and Compound
annual EPS
growth over
3 years
Relative TSR
and Compound
annual EPS
growth over
3 years
Relative TSR
and Compound
annual EPS
growth over
3 years
25 November
2020
$200,000
25 November
2020
$200,000
25 November
2020
$150,000
After vesting
following
release of FY23
financial results.
Any unvested
Rights expire.
After vesting
following
release of FY23
financial results.
Any unvested
Rights expire.
After vesting
following
release of FY23
financial results.
Any unvested
Rights expire.
65
Annual Report 2022 Directors’ report – continued
FY20
KMP
Number of
rights granted
in FY20
Geoff Selig
147,058
Matt
Aitken
147,058
Darren
Dunkley
110,294
Vesting
conditions
Grant date
Fair value at
grant date
Expiry date
Relative TSR
and Compound
annual EPS
growth over
3 years
Relative TSR
and Compound
annual EPS
growth over
3 years
Relative TSR
and Compound
annual EPS
growth over
3 years
27 November
2019
$200,000
27 November
2019
$200,000
27 November
2019
$150,000
After vesting
following
release of FY22
financial results.
Any unvested
Rights expire.
After vesting
following
release of FY22
financial results.
Any unvested
Rights expire.
After vesting
following
release of FY22
financial results.
Any unvested
Rights expire.
FY19
KMP
Number of
rights granted
in FY19
Vesting
conditions
Grant date
Fair value at
grant date
Expiry date
Geoff Selig
130,718
Matt
Aitken
130,718
Darren
Dunkley
98,039
Relative TSR
and Compound
annual EPS
growth over
3 years
Relative TSR
and Compound
annual EPS
growth over
3 years
Relative TSR
and Compound
annual EPS
growth over
3 years
21 November
2018
$200,000
21 November
2018
$200,000
21 November
2018
$150,000
After vesting
following
release of FY21
financial results.
Any unvested
Rights expire.
After vesting
following
release of FY21
financial results.
Any unvested
Rights expire.
After vesting
following
release of FY21
financial results.
Any unvested
Rights expire.
66
IVE Group Limited Director and Executive KMP Shareholding
The table below provides the number of shares in IVE Group Limited held by each Director and Executive KMP
during the period, including their related parties:
Shares
acquired
Shares
disposed
Balance at
30 June 2022
Balance at
30 June 2021
Shares
received
during the
period on
exercise of
Performance
Share Rights
Executive Directors
Geoff Selig, Executive
Chairman1
12,867,263
Paul Selig1
12,910,231
Non-Executive Directors
Gavin Bell
Sandra Hook
James Todd
Cathy Aston
Andrew Bird2
Executive KMP3
Darren Dunkley,
CFO and Company
Secretary
Matt Aitken, Chief
Executive Officer
122,697
12,919
122,336
5,000
379,701
52,270
7,032
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,867,263
12,910,231
122,697
12,919
122,336
5,000
379,701
500
25,000
27,770
500
-
7,532
1 Geoff Selig and Paul Selig are each beneficiaries of the Selig Family Trust No. 5, the trustee of which holds 12,860,231 shares.
2 Andrew Bird was appointed as a Director of the Company on 1 April 2022. Holdings under ‘Balance at 30 June 2021’ are the
holdings as at the date of appointment as set out in the Initial Director’s Interest Notice lodged with ASX on 1 April 2022.
3 Matt Aitken and Darren Dunkley each received 500 shares on 23 September 2021 for NIL consideration as part of a rewards
scheme offered to all IVE Group employees, other than executive directors.
Loans to directors and executives
Shares issued on the exercise of options
No loans were made to directors and executives of
IVE Group including their close family and entities
related to them during the year.
There were no ordinary shares of IVE Group Limited
issued on the exercise of options during the year
ended 30 June 2022 and up to the date of this report.
Shares under option
There were no unissued ordinary shares of IVE Group
under option outstanding at the date of this report.
Shares under performance rights
There were no unissued ordinary shares of IVE Group
under Rights outstanding at the date of this report.
Shares issued on the exercise of Performance
Share Rights
Nil rights vested during the year and nil shares were
issued on exercise of Rights during the year.
This concludes the remuneration report, which has
been audited.
67
Annual Report 2022 Directors’ report – continued
Non-audit services
Lead auditor’s independence declaration
The Lead auditor’s independence declaration is
set out on page 69 and forms part of the directors’
report for the financial year ended 30 June 2022.
Rounding
The Group is of a kind referred to in ASIC
Corporations Instrument 2016/191 dated 24 March
2016 and in accordance with that Instrument,
amounts in the consolidated financial statements
and directors’ report have been rounded to the
nearest thousand dollars, unless otherwise stated.
This report is made in accordance with a resolution
of the directors:
Geoff Selig
Director
Dated at Sydney this 25th day of August 2022
During the year, KPMG, the Group’s auditor has
performed certain other services in addition to its
statutory duties. The Board has considered the
non-audit services provided during the year by the
auditor, and, in accordance with the advice received
from the Audit Committee, is satisfied that:
1. the non-audit services provided during the
financial year by KPMG as the external auditor
were compatible with the general standard of
independence for auditors imposed by the Act;
and
2. any non-audit services provided during the
financial year by KPMG as the external auditor
did not compromise the auditor independence
requirements of the Corporations Act 2001 (Cth)
for the following reasons:
a)
b)
all non-audit services are subject to
corporate governance procedures adopted
by the Group and have been reviewed by
those charged with governance throughout
the year to ensure they do not impact the
integrity and objectivity of the auditor; and
the nature of the services provided do not
undermine the general principles relating
to audit independence in accordance with
APES 110: Code of Ethics for Professional
Accountants, as they did not involve
reviewing or auditing the auditor’s own
work, acting in a management or decision-
making capacity for the Group, acting as an
advocate to the Group or jointly sharing the
risks and rewards.
Details of the amounts paid to the auditor of the
Group, KPMG, for audit and non-audit services
provided during the year are set out in Note 31 of the
Financial Report.
68
IVE Group Limited Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of IVE Group Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of IVE Group Limited for
the financial year ended 30 June 2021 there have been:
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
ii.
i.
PAR_SIG_01
PAR_POS_01
To the Directors of IVE Group Limited
PAR_NAM_01
PAR_DAT_01
PAR_CIT_01
I declare that, to the best of my knowledge and belief, in relation to the audit of IVE Group Limited for
the financial year ended 30 June 2022 there have been:
i.
KPMG
no contraventions of the auditor independence requirements as set out in the
Daniel Camilleri
Corporations Act 2001 in relation to the audit; and
ii.
no contraventions of any applicable code of professional conduct in relation to the audit.
Partner
PM_INI_01
Sydney
25 August 2021
PAR_SIG_01
PAR_NAM_01
PAR_POS_01
PAR_DAT_01
PAR_CIT_01
KPMG
Daniel Camilleri
Partner
Sydney
25 August 2022
54
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
69
Annual Report 2022
Financial report
for the year ended 30 June 2022
7070
IVE Group Limited Consolidated Financial Statements
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the Consolidated Financial Statements
1. Reporting entity
2. Basis of preparation
3. Significant accounting policies
4. Revenue
5. Other income
6. Personnel expenses
7. Expenses
8. Net finance costs
9. Taxes
10. Cash and cash equivalents
11. Trade and other receivables
12. Inventories
13. Property, plant and equipment
14. Leases
15. Intangible assets and goodwill
16. Other assets
17. Trade and other payables
18. Loans and borrowings
19. Employee benefits
20. Provisions
77
77
78
87
88
88
88
88
89
91
92
92
93
94
96
97
97
98
98
99
21. Other liabilities
22. Share-based payments
23. Capital and reserves
24. Earnings per share
25. Acquisitions
26. Operating segments
27. Financial risk management and
financial instruments
28. Capital commitments
29. Related parties
30. Group entities
31. Parent entity disclosures
32. Subsequent events
33. Auditor’s remuneration
34. Deed of cross guarantee
35. Discontinued operation
Directors’ declaration
Independent audit report to the members of
IVE Group Limited
ASX additional information
72
73
74
75
99
100
101
102
103
104
105
111
111
112
113
113
114
114
117
120
121
126
71
Annual Report 2022 Consolidated statement of profit or loss and other
comprehensive income
For the year ended 30 June 2022
In thousands of AUD
Note
2022
Revenue
Cost of sales
Gross profit
Other income
Production expenses
Administrative expenses
Other expenses
Results from operating activities
Finance income
Finance costs
Net finance costs
Profit before tax
Income tax expense
4
5
8
9
Profit from continuing operations
Discontinued operation
Profit from discontinued operation, net of tax
35
Profit for the year
Other comprehensive income
Items that are or may be reclassified to profit or loss
Cash flow hedges – effective portion of changes
in fair value (net of tax)
Cash flow hedges – reclassified to profit or loss
(net of tax)
Net exchange differences on translation of
foreign operations
Total other comprehensive income
Total comprehensive income for the year
Profit attributable to:
Owners of the Company
Profit for the year
Total comprehensive income attributable to:
Owners of the Company
Total comprehensive income for the year
Earnings per share
Basic earnings per share (dollars)
Diluted earnings per share (dollars)
Basic earnings per share (dollars) –
continuing operations
Diluted earnings per share (dollars) –
continuing operations
* Refer to Note 3(s) for restatement.
24
24
24
24
758,976
(405,276)
353,700
3,014
(172,293)
(127,732)
(8,177)
48,512
56
(9,218)
(9,162)
39,350
(12,418)
26,932
-
26,932
26
317
134
477
27,409
26,932
26,932
27,409
27,409
0.19
0.19
0.19
0.19
2021
Restated*
656,457
(340,465)
315,992
724
(147,224)
(115,602)
(5,432)
48,458
517
(12,644)
(12,127)
36,331
(12,076)
24,255
4,805
29,060
(361)
493
-
132
29,192
29,060
29,060
29,192
29,192
0.20
0.20
0.17
0.17
The notes on pages 77 to 118 are an integral part of these consolidated financial statements.
72
IVE Group Limited Consolidated statement of financial position
As at 30 June 2022
In thousands of AUD
Note
2022
2021
Restated*
Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Financial asset
Other current assets
Total current assets
Deferred tax assets
Trade and other receivables
Property, plant and equipment
Right of use assets
Intangible assets and goodwill
Other non-current assets
Total non-current assets
Total assets
Liabilities
Trade and other payables
Lease liabilities
Loans and borrowings
Employee benefits
Current tax payable
Other current liabilities
Total current liabilities
Loans and borrowings
Lease liabilities
Employee benefits
Provisions
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Retained earnings
Total equity
* Refer to Note 3(s) for restatement.
10
11
12
16
9
11
13
14
15
16
17
18
19
21
18
19
20
21
23
23
67,035
113,781
74,164
5,489
-
4,638
265,107
17,151
307
100,088
105,917
133,293
2,554
359,310
624,417
124,373
32,367
3,764
24,411
5,730
15,349
205,994
130,201
92,349
6,714
5,376
1,211
235,851
441,845
182,572
148,878
1,807
31,887
182,572
106,474
100,408
43,844
4,174
1,762
1,703
258,365
15,233
-
100,122
96,228
130,178
-
341,761
600,126
91,719
27,937
2,791
18,850
3,283
8,485
153,065
167,044
91,823
6,568
4,745
854
271,034
424,099
176,027
149,066
(185)
27,146
176,027
The notes on pages 77 to 118 are an integral part of these consolidated financial statements.
73
Annual Report 2022 Consolidated statement of changes in equity
For the year ended 30 June 2022
In thousands of AUD
Note
Share
capital
Share-
based
payment
reserve
Hedging
reserve
Retained
earnings
Total
equity
Balance reported at 1 July 2020
Opening restatement*
Balance at 1 July 2020 (restated)
Total comprehensive income for the year
Profit for the year (restated*)
Other comprehensive income
Total comprehensive income for the year
Transactions with owners of
the Company
Performance share rights
Share buy back
Dividends to owners of the Company
Total transactions with owners of
the Company
Balance at 30 June 2021 (restated*)
Balance reported at 1 July 2021
(restated*)
Total comprehensive income for
the year
Profit for the year
Other comprehensive income
Total comprehensive income for
the year
Transactions with owners of the
Company
Performance share rights
Employee share issue
Share buy back
Dividends to owners of the Company
Total transactions with owners of
the Company
156,502
-
156,502
-
-
-
-
(7,436)
-
(7,436)
149,066
149,066
-
-
-
-
-
(188)
-
22
23
23
22
22
23
23
198
-
198
-
-
-
265
-
-
265
463
463
-
-
-
297
1,218
-
-
(188)
1,515
(780)
8,582
164,502
-
(214)
(214)
(780)
8,368
164,288
-
29,060
29,060
132
132
-
132
29,060
29,192
-
-
-
-
-
-
265
(7,436)
(10,282)
(10,282)
(10,282)
(17,453)
(648)
27,146
176,027
(648)
27,146
176,027
-
26,932
26,932
477
-
477
477
26,932
27,409
-
-
-
-
-
-
-
297
1,218
(188)
(22,191)
(22,191)
(22,191)
(20,864)
Balance at 30 June 2022
148,878
1,978
(171)
31,887
182,572
* Refer to Note 3(s) for restatement.
The notes on pages 77 to 118 are an integral part of these consolidated financial statements.
74
IVE Group Limited Consolidated statement of cash flows
For the year ended 30 June 2022
In thousands of AUD
Note
2022
2021*
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Cash generated from operating activities
Interest received
Interest paid
Income tax paid
JobKeeper Payment received
Payment of acquisition costs
Payment of restructure costs
Net cash from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Acquisition of property, plant and equipment and
intangible assets
Acquisitions of businesses (net of cash and
transactions costs)
Net proceeds on disposal of business
(net of cash and transactions costs)
Acquisition of financial asset (including
transactions costs)
Net cash used in investing activities
Cash flows from financing activities
Proceeds from bank loans
Repayment of loans and borrowings
Transaction costs on refinancing bank loans
Dividends paid
Payment of lease liabilities
Share buy back (net of transaction costs)
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Effects of foreign currency translation
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
* Refer to Note 3(s) for restatement.
825,845
728,932
(734,495)
(619,462)
91,350
56
(3,215)
(11,821)
-
(416)
(4,278)
71,676
263
(15,743)
109,470
202
(8,878)
(12,064)
21,521
(403)
(3,683)
106,165
651
(9,082)
(4,960)
(1,855)
-
-
15,165
(5,354)
(20,440)
(475)
10
25
35
15,000
(53,336)
(820)
(22,191)
(29,081)
(188)
(90,616)
(39,380)
(59)
106,474
67,035
-
(3,234)
-
(10,282)
(29,904)
(7,436)
(50,856)
54,834
-
51,640
106,474
75
The notes on pages 77 to 118 are an integral part of these consolidated financial statements.
Annual Report 2022 76
IVE Group Limited Notes to the consolidated financial statements
For the year ended 30 June 2022
1. Reporting entity
IVE Group Limited (the ultimate parent entity or the
Company) is a company domiciled in Australia.
Its registered address is Level 3, 35 Clarence Street,
Sydney NSW 2000.
This consolidated financial report as at and for the
year ended 30 June 2022 comprises the Company
and its subsidiaries (IVE or Group).
The Group is a for-profit entity primarily involved in:
> Conceptual and creative design across print,
mobile and interactive media;
> Printing and distribution of catalogues,
magazines, marketing and corporate
communications materials and stationery;
> Manufacturing of point of sale display material
and large format banners for retail applications;
> Personalised communications including marketing
automation, marketing mail, publication mail,
eCommunications, and multi-channel solutions;
> Data analytics, customer experience strategy,
and CRM; and
> Outsourced communications solutions for
large organisations including development of
customised multi-channel management models
covering creative and digital services, supply
chain optimisation, inventory management,
warehousing and logistics.
The Group services all major industry sectors in
Australia including financial services, publishing,
retail, communications, property, clubs and
associations, not-for-profit, utilities, manufacturing,
education and government.
(b) Functional and presentation currency
These consolidated financial statements are
presented in Australian dollars, which is the
Company’s functional currency.
The Company is of a kind referred to in ASIC
Corporations Instrument 2016/191 dated 24 March
2016, and in accordance with that Instrument,
all financial information presented in Australian
dollars has been rounded to the nearest thousand
unless otherwise stated. Where applicable certain
comparative figures have been reclassified to align
with current period presentation.
(c) Use of estimates and judgements
In preparing these consolidated financial
statements, management has made judgements,
estimates and assumptions that affect the
application of accounting policies and the reported
amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
The significant judgements made by management
in applying the Group’s accounting policies and the
key sources of estimation uncertainty were the same
as those that applied to the consolidated financial
statements for the year ended 30 June 2021.
Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting
estimates are recognised prospectively.
(i) Judgements
Information about judgements made in applying
the Group’s accounting policies that have the most
significant effects on the amounts recognised in the
consolidated financial statements is included in the
following notes:
> Note 3(e) & (f) – estimation of useful lives of assets
2. Basis of preparation
> Note 3(j) – provisions
(a) Statement of compliance
The consolidated financial statements are general
purpose financial statements which have been
prepared in accordance with Australian Accounting
Standards (AASBs) adopted by the Australian
Accounting Standards Board (AASB) and the
Corporations Act 2001. The consolidated financial
statements comply with International Financial
Reporting Standards (IFRSs) adopted by the
International Accounting Standards Board (IASB).
The consolidated financial statements were
authorised for issue by the Board of Directors on
25 August 2022. Details of the Group’s accounting
policies is included in Note 3.
> Note 27 – Level 2 and 3 fair values of equity
securities, and forward exchange contracts; and
> Note 14 – lease term: whether the Group is
reasonably certain to exercise extension options.
(ii) Assumptions and estimation uncertainties
Information about assumptions and estimation
uncertainties that have a significant risk of resulting
in a material adjustment in the year ending 30 June
2022 is included in the following notes:
> Note 3(h)(ii) & 15 – impairment testing for cash
generating units containing goodwill
> Note 25 – acquisitions: fair value measured on a
provisional basis; and
77
Annual Report 2022 Notes to the consolidated financial statements – continued
2. Basis of preparation (continued)
(ii) Subsidiaries
> Note 27 – measurement of Expected Credit Loss
(ECL) allowance on trade receivables.
Measurement of fair values
When measuring the fair value of an asset or a
liability, the Group uses market observable data if
possible. Fair values are categorised into different
levels in a fair value hierarchy based on the inputs
used in the valuation techniques as follows:
> Level 1: quoted prices (unadjusted) in active
markets for identical assets or liabilities.
> Level 2: inputs other than quoted prices included
within Level 1 that are observable for the asset or
liability, either directly (ie. as prices) or indirectly
(ie. derived from prices).
> Level 3: inputs for the asset or liability that are not
based on observable market data (unobservable
inputs).
3. Significant accounting policies
The accounting policies set out below have been
applied consistently during the period presented
in these consolidated financial statements, and
have been applied consistently by all entities in the
Group, except for the adoption of new accounting
standards (see Note 3(s)).
(a) Basis of consolidation
(i) Business combinations
The Group accounts for business combinations using
the acquisition method when control is transferred
to the Group. The consideration transferred in
the acquisition is generally measured at fair
value, as are the identifiable net assets acquired.
Any goodwill that arises is tested annually for
impairment. Any gain on a bargain purchase is
recognised in profit or loss immediately. Transaction
costs are expensed as incurred, except those related
to the issue of debt or equity securities.
The consideration transferred does not include
amounts related to the settlement of pre-exiting
relationships. Such amounts are generally
recognised in profit or loss.
Any contingent consideration is measured at fair
value at the date of acquisition, with subsequent
changes in the fair value of the contingent
consideration recognised in profit or loss.
78
Subsidiaries are entities controlled by the Group. The
Group controls an entity when it is exposed to, or
has rights to, variable returns from its involvement
with the entity and has the ability to affect those
returns through its power over the entity. The
financial statements of subsidiaries are included in
the consolidated financial statements from the date
on which control commences until the date on which
control ceases.
(iii) Transactions eliminated on consolidation
Intra-group balances and transactions, and any
unrealised income and expenses arising from intra-
group transactions, are eliminated in preparing the
consolidated financial statements.
(b) Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated
to the functional currency of the Group (Australian
dollars) at exchange rates at the dates of the
transactions. Monetary assets and liabilities
denominated in foreign currencies are translated to
the functional currency at the exchange rate at the
reporting date.
Foreign currency differences arising on retranslation
are recognised in profit or loss.
(c) Financial instruments
(i) Recognition and initial measurement
Trade receivables and debt securities issued are
initially recognised when they are originated. All
other financial assets and financial liabilities are
initially recognised when the Group becomes a party
to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable
without a significant financing component) or
financial liability is initially measured at fair value
plus or minus, for an item not at fair value through
profit and loss (FVTPL), transaction costs that are
directly attributable to its acquisition or issue. A
trade receivable without a significant financing
component is initially measured at the transaction
price.
(ii) Classification and subsequent measurement
The Group classifies its financial instruments in the
following measurement categories: at amortised
cost, at fair value through profit and loss (FVTPL)
and at fair value through other comprehensive
income (FVOCI).
IVE Group Limited Financial assets are not reclassified subsequent to
their initial recognition unless the Group changes
its business model for managing financial assets,
in which case all affected financial assets are
reclassified on the first day of the first reporting
period following the change in the business model.
A financial asset is measured at amortised cost if
it meets both of the following conditions and is not
designated as at FVTPL:
trading, it is a derivative or it is designated as such
on initial recognition. Financial liabilities at FVTPL
are measured at fair value and net gains and losses,
including any interest expense, are recognised
in profit and loss. Other financial liabilities are
subsequently measured at amortised cost using
the effective interest method. Interest expense and
foreign exchange gains and losses are recognised
in profit or loss. Any gain or loss on derecognition is
also recognised in profit or loss.
> It is held within a business model whose objective
is to hold assets to collect contractual cash flows;
and
(iii) Derecognition
Financial assets
> Its contractual terms give rise on a specified dates
to cash flow that are solely payments of principal
and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it
meets both of the following conditions and is not
designated as at FVTPL:
> It is held within a business model whose objective
is achieved by both collecting contractual cash
flows and selling financial assets; and
> Its contractual terms give rise on specified dates
to cash flow that are solely payments of principal
and interest on the principal amount outstanding.
On initial recognition of an equity investment that is
not held for trading, the Group may irrevocably elect
to present subsequent changes in the investment’s
fair value in OCI. This election is made on an
investment-by-investment basis.
All financial assets not classified as measured at
amortised cost or FVOCI as described above are
measured at FVTPL. This includes all derivative
financial assets. On initial recognition, the Group
may irrevocably designate a financial asset that
otherwise meets the requirements to be measured
at amortised cost or at FVOCI as at FVTPL if doing
so eliminates or significantly reduces an accounting
mismatch that would otherwise arise.
Financial assets at amortised costs
These assets are subsequently measured at
amortised cost using the effective interest method.
The amortised cost is reduced by impairment losses.
Interest income, foreign exchange gains and losses
and impairment are recognised in profit or loss. Any
gain or loss on derecognition is recognised in profit
or loss.
Financial liabilities – Classification, subsequent
measurement and gains and losses
Financial liabilities are classified as measured
at amortised cost or FVTPL. A financial liability is
classified as at FVTPL if it is classified as held-for-
The Group derecognises a financial asset when
the contractual rights to the cash flows from the
financial asset expire, or it transfers the rights to
receive the contractual cash flows in a transaction
in which substantially all of the risks and rewards
of ownership of the financial asset are transferred
or in which the Group neither transfers nor retains
substantially all of the risks and rewards of
ownership and it does not retain control of the
financial asset.
The Group enters into transactions whereby
it transfers assets recognised in its statement
of financial position but retains either all or
substantially all of the risks and rewards of the
transferred assets. In these cases, the transferred
assets are not derecognised.
Financial liabilities
The Group derecognises a financial liability when its
contractual obligations are discharged or cancelled
or expire. The Group also derecognises a financial
liability when its terms are modified and the cash
flows of the modified liability are substantially
different, in which case a new financial liability
based on the modified terms is recognised at
fair value.
On derecognition of a financial liability, the
difference between the carrying amount
extinguished and the consideration paid (including
any non-cash assets transferred or liabilities
assumed) is recognised in profit or loss.
(iv) Offsetting
Financial asset and financial liabilities are offset
and the net amount presented in the statement of
financial position when, and only when the Group
currently has a legally enforceable right to set off
the amounts and it intends either to settle them on
a net basis or to realise the asset and settle the
liability simultaneously.
79
Annual Report 2022 Notes to the consolidated financial statements – continued
3. Significant accounting policies (continued)
(v) Derivative financial instruments and hedge
accounting
Derivative financial instruments and hedge
accounting
The Group holds derivative financial instruments
to hedge its foreign currency and interest rate risk
exposures. Embedded derivatives are separated from
the host contract and accounted for separately if
the host contract is not a financial asset and certain
criteria are met.
Derivatives are initially measured at fair value.
Subsequent to initial recognition, derivatives are
measured at fair value, and changes therein are
generally recognised in profit or loss.
The Group designates certain derivatives as
hedging instruments to hedge the variability in cash
flows associated with highly probable forecast
transactions arising from changes in foreign
exchange rates and interest rates.
At inception of designated hedging relationships, the
Group documents the risk management objective
and strategy for undertaking the hedge. The Group
also documents the economic relationship between
the hedged item and the hedging instrument,
including whether the changes in cash flows of the
hedged item and hedging instrument are expected
to offset each other.
Cash flow hedges
When a derivative is designated as a cash flow
hedging instrument, the effective portion of changes
in the fair value of the derivative is recognised in
OCI and accumulated in the hedging reserve. The
effective portion of changes in the fair value of the
derivative that is recognised in OCI is limited to the
cumulative change in fair value of the hedged item,
determined on a present value basis, from inception
of the hedge. Any ineffective portion of changes
in the fair value of the derivative is recognised
immediately in profit or loss.
The Group designates only the change in fair value
of the spot element of forward exchange contracts
as the hedging instrument in cash flow hedging
relationships. The change in fair value of the forward
element of forward exchange contracts (‘forward
points’) is separately accounted for as a cost of
hedging and recognised in a cost of hedging reserve
within equity.
When the hedged forecast transaction subsequently
results in the recognition of a non-financial item
such as inventory, the amount accumulated in the
hedging reserve and the cost of hedging reserve
80
is included directly in the initial cost of the non-
financial item when it is recognised.
For all other hedged forecast transactions, the
amount accumulated in the hedging reserve and
the cost of hedging reserve is reclassified to profit
or loss in the same period or periods during which
the hedged expected future cash flows affect profit
or loss.
If the hedge no longer meets the criteria for hedge
accounting or the hedging instrument is sold, expires,
is terminated or is exercised, then hedge accounting
is discontinued prospectively. When hedge
accounting for cash flow hedges is discontinued,
the amount that has been accumulated in the
hedging reserve remains in equity until, for a hedge
of a transaction resulting in the recognition of a
non-financial item, it is included in the non-financial
item’s cost on its initial recognition or, for other cash
flow hedges, it is reclassified to profit or loss in the
same period or periods as the hedged expected
future cash flows affect profit or loss.
If the hedged future cash flows are no longer
expected to occur, then the amounts that have been
accumulated in the hedging reserve and the cost
of hedging reserve are immediately reclassified to
profit or loss.
(d) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental
costs directly attributable to the issue of ordinary
shares are recognised as a deduction from equity,
net of any tax effects.
(e) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are
measured at cost less accumulated depreciation
and accumulated impairment losses.
Cost includes expenditure that is directly
attributable to the acquisition of the asset.
Purchased software that is integral to the
functionality of the related equipment is capitalised
as part of that equipment.
When parts of an item of property, plant and
equipment have different useful lives, they are
accounted for as separate items of property, plant
and equipment.
Any gains and losses on disposal of an item of
property, plant and equipment (calculated as the
difference between the net proceeds from disposal
and the carrying amount of the item) are recognised
in profit or loss.
IVE Group Limited (ii) Subsequent costs
(iv) Amortisation
Subsequent expenditure is capitalised only when
it is probable that the future economic benefits
associated with the expenditure will flow to the
Group. Ongoing repairs and maintenance are
expensed as incurred.
Amortisation is calculated to write off the cost of
intangible assets less their estimated residual values
using the straight-line method over their estimated
useful lives, and is generally recognised in profit or
loss. Goodwill is not amortised.
(iii) Depreciation
Items of property, plant and equipment are
depreciated from the date that they are installed
and are ready for use, or in respect of internally
constructed assets, from the date that the asset is
completed and ready for use.
Depreciation is calculated to write off the cost of
property, plant and equipment less their estimated
residual values using the straight-line basis over
their estimated useful lives. Depreciation is generally
recognised in profit or loss, unless the amount is
included in the carrying amount of another asset.
Leased assets are depreciated over the shorter
of the lease term and their useful lives unless it
is reasonably certain that the Group will obtain
ownership by the end of the lease term.
The estimated useful lives for the current year of
significant items of property, plant and equipment
are as follows:
> Leasehold improvements
shorter of lease term
and life of asset
> Plant and equipment
3–20 years
> Fixtures and fittings
5–10 years
Depreciation methods, useful lives and residual
values are reviewed at each reporting date and
adjusted if appropriate.
(f) Intangible assets and goodwill
(i) Goodwill
Goodwill arising on the acquisition of subsidiaries
is measured at cost less accumulated impairment
losses.
(ii) Other intangible assets
Intangible assets that are acquired by the Group
and have finite useful lives are measured at cost
less accumulated amortisation and accumulated
impairment losses.
(iii) Subsequent expenditure
Subsequent expenditure is capitalised only when
it increases the future economic benefits embodied
in the specific asset to which it relates. All other
expenditure, including expenditure on internally
generated goodwill and brands, is recognised in
profit or loss as incurred.
The estimated useful lives are as follows:
> Computer software
3–4 years
> Customer relationships
5–9 years
Amortisation methods, useful lives and residual
values are reviewed at each reporting date and
adjusted if appropriate.
(g) Inventories
Inventories are measured at the lower of cost and
net realisable value. The cost of inventories is
based on the first-in, first-out principle. In the case
of manufactured inventories and work in progress,
cost includes an appropriate share of production
overheads based on normal operating capacity.
(h) Impairment
(i) Non-derivative financial assets
The Group recognises loss allowances for expected
credit loss (ECL) on financial assets measured at
amortised costs.
The Group measures loss allowance at an amount
equal to lifetime ECL.
When determining whether the credit risk of a
financial asset has increased significantly since
initial recognition and when estimating ECLs, the
Group considers reasonable and supportable
information that is relevant and available without
undue cost or effort. This includes both quantitative
and qualitative information and analysis, based on
the Group’s historical experience and informed credit
assessment including forward-looking information.
The Group assumes that the credit risk on a financial
asset has increased significantly if it is more than
90 days past due.
The Group considers a financial asset to be in
default when the debtor is unlikely to pay its credit
obligations to the Group in full, without recourse by
the Group to actions such as realising security (if any
is held).
Lifetime ECLs are the ECLs that result from all
possible default events over the expected life of a
financial instrument.
The maximum period considered when estimating
ECLs is the maximum contractual period over which
the Group is exposed to credit risk.
81
Annual Report 2022 Notes to the consolidated financial statements – continued
3. Significant accounting policies (continued)
Measurement of ECLs
ECLs are a probability-weighted estimate of credit
losses. Credit losses are measured as the present
values of all cash shortfalls (ie. the difference
between the cash flows due to the entity in
accordance with the contract and the cash flows
that the Group expects to receive).
ECLs are discounted at the effective interest rate of
the financial asset.
Credit-impaired financial assets
At each reporting date, the Group assesses whether
financial assets carried at amortised cost are credit-
impaired. A financial asset is ‘credit-impaired’ when
one or more events that have a detrimental impact
on the estimated future cash flows of the financial
assets have occurred.
Evidence that a financial asset is credit-impaired
includes the following observable data:
> A breach of contract such as a default or being
more than 90 days past due;
> It is probable that the debtor will enter
bankruptcy or other financial reorganisation.
Presentation of allowance for ECL in the statement
of financial position
Loss allowances for financial assets measured at
amortised cost are deducted from the gross carrying
amount of the assets.
Write-off
The gross carrying amount of a financial asset
is written off when the Group has no reasonable
expectation of recovering a financial asset in its
entirety or a portion thereof. The Group individually
makes an assessment with respect to the timing
and amount of write-off based on whether there is
a reasonable expectation of recovery. The Group
expects no significant recovery from the amount
written off. However, financial assets that are
written off could still be subject to enforcement
activities in order to comply with the Group’s
procedures for recovery of amounts due.
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial
assets, other than inventories and deferred tax
assets, are reviewed at each reporting date to
determine whether there is any indication of
impairment. If any such indication exists, then the
asset’s recoverable amount is estimated. Goodwill is
tested annually for impairment.
82
For impairment testing, assets are grouped together
into the smallest group of assets that generates
cash inflows from continuing use that are largely
independent of the cash inflows of other assets or
cash-generating unit (CGU). Goodwill arising from a
business combination is allocated to CGUs or groups
of CGUs that are expected to benefit from the
synergies of the combination.
The recoverable amount of an asset or CGU is the
greater of its value in use and its fair value less costs
to sell. In assessing value in use, the estimated future
cash flows are discounted to their present value
using a post-tax discount rate that reflects current
market assessments of the time value of money and
the risks specific to the asset.
An impairment loss is recognised if the carrying
amount of an asset or CGU exceeds its estimated
recoverable amount.
Impairment losses are recognised in profit or loss.
Impairment losses recognised in respect of CGUs are
allocated first to reduce the carrying amount of any
goodwill allocated to the CGU (group of CGUs), and
then to reduce the carrying amounts of the other
assets in the CGU (group of CGUs) on a pro rata
basis.
An impairment loss in respect of goodwill is not
reversed. For other assets, an impairment loss is
reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that
would have been determined, net of depreciation
or amortisation, if no impairment loss had been
recognised.
(i) Employee benefits
(i) Defined contribution plans
A defined contribution plan is a post-employment
benefit plan under which an entity pays fixed
contributions into a separate entity and will have
no legal or constructive obligation to pay further
amounts. Obligations for contributions to defined
contribution pension plans are recognised as an
employee benefit expense in profit or loss in the
periods during which services are rendered by
employees.
(ii) Other long-term employee benefits
The Group’s net obligation in respect of long-
term employee benefits is the amount of future
benefit that employees have earned in return for
their service in the current and prior periods. That
benefit is discounted to determine its present value.
Remeasurements are recognised in profit or loss in
the period in which they arise.
IVE Group Limited (iii) Short-term employee benefits
(k) Revenue from contracts with customers
Short-term employee benefits are expensed as the
related service is provided. A liability is recognised
for the amount expected to be paid if the Group has
a present legal or constructive obligation to pay
this amount as a result of past service provided by
the employee and the obligation can be estimated
reliably.
(iv) Share-based payment transactions
The grant-date fair value of equity-settled share-
based payment awards granted to employees
is generally recognised as an expense, with a
corresponding increase in equity, over the vesting
period of the awards. The amount recognised as an
expense is adjusted to reflect the number of awards
for which the related service and non-market
performance conditions are expected to be met, such
that the amount ultimately recognised is based on
the number of awards that meet the related service
and non-market performance conditions at the
vesting date. For share-based payment awards with
market and non-vesting conditions, the grant-date
fair value of the share-based payment is measured
to reflect such conditions and there is no true-up for
differences between expected and actual outcomes.
(j) Provisions
A provision is recognised if, as a result of a past
event, the Group has a present legal or constructive
obligation that can be estimated reliably, and it is
probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are
determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market
assessments of the time value of money and the
risks specific to the liability. The unwinding of the
discount is recognised as finance cost.
Restructuring
A provision for restructuring is recognised when
the Group has approved a detailed and formal
restructuring plan, and the restructuring either has
commenced or has been announced publicly. Future
operating losses are not provided for.
Make good provision
A make good provision is recognised when the
Group enters into a lease contract that requires the
property to be returned to the lessor in its original
condition. The provision is based on the expected
future cost of the refurbishment discounted to reflect
current market assessments.
Revenue is measured based on the consideration
specified in a contract with a customer. The Group
recognises revenue over-time, or at a point in time.
Recognising of revenue over-time
Revenue is recognised on the rendering of
these services relating to print management,
communications, creative and digital services,
supply chain optimisation, inventory management,
warehousing and logistics in proportion to the stage
of completion of the transaction at the reporting
date. The stage of completion is assessed based on
surveys of work performed.
Recognising of revenue at a point in time
The Group recognises revenue relating to print
production and distribution when it transfers control
over a good or service to a customer. Customers
obtain control when the goods are delivered to and
have been accepted. Invoices are generated at that
point in time. Invoices are usually payable within
30 days.
(l) Leases
At inception of a contract, the Group assesses
whether a contract is, or contains, a lease. A
contract is, or contains, a lease if the contracts
conveys the right to control the use of an identified
asset for a period of time in exchange for
consideration.
(i) As a lessee
At commencement or on modification of a contract
that contains a lease component, the Group
allocates the consideration in the contracts to each
lease component on the basis of its relative stand-
alone prices.
The Group recognises a right-of-use asset and lease
liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability
adjusted for any lease payments made at or before
the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the
underlying asset or the site on which it is located,
less any lease incentives received.
The right-of-use asset is subsequently depreciated
using the straight-line method from the
commencement date to the end of the lease
term, unless the lease transfers ownership of the
underlying asset to the Group by the end of the lease
term or the cost of the right-of-use asset reflects
83
Annual Report 2022 Notes to the consolidated financial statements – continued
3. Significant accounting policies (continued)
Short-term leases and leases of low-value assets
that the Group will exercise a purchase option.
In that case, the right-of-use asset will be
depreciated over the useful life of the underlying
asset, which is determined on the same basis as
those of property and equipment. In addition,
the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the
present value of the lease payments that are
not paid at the commencement date, discounted
using interest rate implicit in the lease or, if that
rate cannot be readily determined, the Group’s
incremental borrowing rate. Generally, the
Group uses its incremental borrowing rate as the
discount rate.
The Group determines its incremental borrowing
rate by obtaining interest rates for classes of leased
assets and lease terms from external financing
sources.
Lease payments included in the measurement of the
lease liability comprise the following:
> Fixed payments, including in-substance fixed
payments;
> Variable lease payments that depend on an index
or a rate, initially measured using the index or rate
as at the commencement date;
> Amounts expected to be payable under a residual
value guarantee; and
> The exercise price under a purchase option that
the Group is reasonably certain to exercise,
lease payments in an optional renewal period
if the Group is reasonably certain to exercise
an extension option, and penalties for early
termination of a lease unless the Group is
reasonably certain not to terminate early.
The lease liability is measured at amortised cost
using the effective interest method. It is remeasured
when there is a change in future lease payments
arising from a change in an index or rate, if there
is a change in the Group’s estimate of the amount
expected to be payable under a residual value
guarantee, if the Group’s changes its assessment
of whether it will exercise a purchase, extension
or termination option or if there is a revised in-
substance fixed lease payment.
When the lease liability is remeasured in this way,
a corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in
profit or loss if the carrying amount of the right-of-
use asset has been reduced to zero.
84
The Group has elected to not recognise right-of-use
assets and liabilities for leases of low-value assets
and short-term leases, including IT equipment. The
Group recognises lease payments associated with
these leases as an expense on a straight-line basis
over the lease term.
(ii) As a lessor
At inception or on modification of a contract that
contains a lease component, the Group allocates
the consideration in the contract to each lease
component on the basis of their relative stand-alone
prices.
When the Group acts as a lessor, it determines at
lease inception whether such lease is a finance lease
or an operating lease.
To classify each lease, the Group makes an
overall assessment of whether the lease transfers
substantially all of the risks and rewards incidental
to ownership of the underlying asset. If this is the
case, then the lease is a finance lease; if not, then it
is an operating lease. As part of this assessment, the
Group considers certain indicators such as whether
the lease is for the major part of the economic life of
the asset.
When the Group is an intermediate lessor, it
accounts for its interests in the head lease and
the sub-lease separately. It assesses the lease
classification of a sub-lease with reference to the
right-of-use asset arising from the head lease, not
with reference to the underlying asset. If a head
lease is a short-term lease to which the Group
applies the exemption described above, then it
classifies the sub-lease as an operating lease.
If an arrangement contains lease and non-lease
components, then the Group applies AASB 15 to
allocate the consideration in the contract.
(m) Finance income and finance costs
Finance income comprises net gain on financial
assets at FVTPL and interest income on funds
invested. Interest income is recognised as it accrues
in profit or loss, using the effective interest method.
Finance costs comprise net loss on financial assets
at FVTPL, and interest expense on borrowings.
Borrowing costs that are not directly attributable
to the acquisition, construction or production of a
qualifying asset are recognised in profit or loss using
the effective interest method.
Foreign currency gains and losses are reported on
a net basis as either finance income or finance cost
depending on whether foreign currency movements
are in a net gain or net loss position.
IVE Group Limited (n) Government grants
The Group recognised a conditional government
grant relating to the JobKeeper Payment scheme
in the consolidated statement of profit or loss as a
credit to wages and salaries when the grant become
a receivable.
(o) Income tax
Income Tax expense comprises current and deferred
tax. Current and deferred tax are recognised in
profit or loss except to the extent that it relates
to items recognised directly in equity or in other
comprehensive income.
(i) Current tax
Current tax is the expected tax payable or
receivable on the taxable income or loss for the year,
using tax rates enacted or substantively enacted
at the reporting date, and any adjustment to tax
payable in respect of previous years.
(ii) Deferred tax
Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets
and liabilities for financial reporting purposes and
the amounts used for taxation purposes. Deferred
tax is not recognised for:
> Temporary differences on the initial recognition
of assets or liabilities in a transaction that is not
a business combination and that affects neither
accounting nor taxable profit or loss; or
> Temporary differences related to investments
in associates to the extent that the Company is
able to control the timing of the reversal of the
temporary differences and it is probable that they
will not reverse in the foreseeable future; and
> Taxable temporary differences arising on the
initial recognition of goodwill.
The measurement of deferred tax reflects the tax
consequences that would follow the manner in
which the Group expects, at the end of the reporting
period, to recover or settle the carrying amount of its
assets and liabilities.
Deferred tax is measured at the tax rates that are
expected to be applied to temporary differences
when they reverse, using tax rates enacted or
substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset if there
is a legally enforceable right to offset current tax
liabilities and assets, and they relate to taxes levied
by the same tax authority on the same taxable
entity, or on different tax entities, but they intend
to settle current tax liabilities and assets on a
net basis or their tax assets and liabilities will be
realised simultaneously.
A deferred tax asset is recognised for unused
tax losses, tax credits and deductible temporary
differences, to the extent that it is probable that
future taxable profits will be available against
which they can be utilised. Deferred tax assets are
reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the
related tax benefit will be realised.
(iii) Tax exposures
In determining the amount of current and deferred
tax the Group takes into account the impact of
uncertain tax positions and whether additional
taxes and interest may be due. This assessment
relies on estimates and assumptions and may
involve a series of judgements about future events.
New information may become available that causes
the Group to change its judgement regarding the
adequacy of existing tax liabilities; such changes to
tax liabilities will impact tax expense in the period
that such a determination is made.
(iv) Tax consolidation
IVE Group Limited and its wholly owned Australian
controlled entities formed a tax consolidated group
on 16 December 2015. As a consequence, these
entities are taxed as a single entity and the deferred
tax asset and liabilities of these entities are offset in
the consolidated financial statements.
(p) Goods and services tax (GST)
Revenue, expenses and assets are recognised net
of the amount of GST, except where the amount of
GST incurred is not recoverable from the taxation
authority. In these circumstances, the GST is
recognised as part of the cost of acquisition of the
asset or as part of an item of expense. Receivables
and payables are shown inclusive of GST.
The net amount of GST recoverable from, or
payable to, the taxation authority is included as
part of receivables or payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing or
financing activities, which is recoverable from, or
payable to, the taxation authority is classified as
operating cash flows.
(q) Earnings per share
The Group presents basic and diluted earnings per
share data for its ordinary shares. Basic earnings
per share is calculated by dividing the profit or
loss attributable to ordinary shareholders of
85
Annual Report 2022 Notes to the consolidated financial statements – continued
3. Significant accounting policies (continued)
the Company by the weighted average number
of ordinary shares outstanding during the year,
adjusted for own shares held. Diluted earnings
per share is determined by adjusting the profit or
loss attributable to ordinary shareholders and
the weighted average number of ordinary shares
outstanding, adjusted for own shares held, for the
effects of all dilutive potential ordinary shares,
which comprise convertible notes and share options
granted to employees.
(r) Segment reporting
Operating segments are reported in a manner
consistent with the internal reporting provided
to the chief operating decision maker. It has been
determined the Board of Directors is the chief
operating decision maker, as they are ultimately
responsible for allocating resources and assessing
performance.
(s) Adoption of new accounting standards and
interpretations
The Group has adopted all new and amended
Australian Accounting Standards and Australian
Accounting Standards Board (AASB) interpretations
that are mandatory for the current reporting period
and relevant to the Group. With the exception of the
IFRIC decision on Configuration or Customisation
Costs in a Cloud Computing Arrangement
(see below) adoption of these standards and
interpretations has not resulted in any material
changes to the Group’s year-end financial report.
Configuration or Customisation Costs in a Cloud
Computing Arrangement
In April 2021, the International Financial Reporting
Standards Interpretations Committee (IFRIC)
issued a final agenda decision, ‘Configuration
or Customisation costs in a Cloud Computing
Arrangement’. The decision discusses whether
configuration or customisation expenditure relating
to cloud computing arrangements is able to be
recognised as an intangible asset and if not, over
what time period the expenditure is expensed.
The Group’s accounting policy has historically been
to capitalise all costs related to cloud computing
arrangements as intangible assets in the Statement
of Financial Position. The adoption of this agenda
decision has resulted in the recognition of these
intangible assets as an expense for year ended
30 June 2022 of $1,701 thousand (for the year ended
30 June 2021 of $421 thousand, net of tax), and an
adjustment to opening retained earnings of $214
thousand as at 1 July 2020.
The following tables presents the impact of the
1 July 2021 restatement on the comparative
information presented in for the prior year ending
30 June 2021.
Consolidated Statement of
Financial Position
as at 30 June 2021
As previously
reported
Cloud
computing
adjustment
As restated
131,085
14,961
30,616
176,662
149,066
(185)
27,781
176,662
(907)
272
-
(635)
-
-
(635)
(635)
130,178
15,233
30,616
176,027
149,066
(185)
27,146
176,027
Intangible assets
Deferred tax assets
Other net assets
Net assets
Share capital
Reserves
Retained earnings
Total equity
86
IVE Group Limited Consolidated Statement of
Financial Position
as at 30 June 2021
Other expenses
Results from operating activities
Profit before tax
Income tax expense
Profit from continuing operations
Profit for the year
Total comprehensive income for the year
Earnings per share
Basic earnings per share (dollars)
Diluted earnings per share (dollars)
Basic earnings per share (dollars) –
continuing operations
Diluted earnings per share (dollars) –
continuing operations
As previously
reported
Cloud
computing
adjustment
As restated
(4,831)
49,059
36,932
(12,256)
24,676
29,481
29,613
0.20
0.20
0.17
0.17
(601)
(601)
(601)
180
(421)
(421)
(421)
-
-
-
-
(5,432)
48,458
36,331
(12,076)
24,255
29,060
29,192
0.20
0.20
0.17
0.17
The impact on 1 July 2020 intangible assets was a decrease of $306 thousand, deferred tax was increased by
$92 thousand with the net impact being a reduction on 1 July 2020 retained earnings of $214 thousand.
(t) New standards and interpretations not yet adopted
There are no new or amended standards and interpretations that are expected to have a significant impact on
the Group’s consolidated financial statements.
4. Revenue
The Group’s operations and main revenue streams are those described in Note 1. The tables below provide
information on the Group’s revenue and contract balances derived from contracts with customers.
(a) Disaggregation of revenue
In thousands of AUD
Products and services transferred at a point in time
Services transferred over time
(b) Contract balances
In thousands of AUD
Receivables, which are included in ‘Trade and other receivables’
Contract assets
Contract liabilities
2022
707,057
51,919
758,976
2022
116,742
3,491
13,888
2021
608,816
47,641
656,457
2021
101,530
1,056
8,263
Contract liabilities of $8,263 thousand as at 30 June 2021 has been recognised as revenue in the year ending
30 June 2022. Contract liabilities of $13,888 thousand as at 30 June 2022 will be recognised as revenue during
the year ending 30 June 2023.
87
Annual Report 2022 Notes to the consolidated financial statements – continued
5. Other income
In thousands of AUD
Other income
6. Personnel expenses
In thousands of AUD
Wages and salaries
Contributions to defined contribution plans
Share-based payment expense
2022
3,014
2021
724
2022
153,239
12,468
265
2021
158,273
13,096
112
165,972
171,481
As the JobKeeper Payment scheme has ended, no amount was credited to wages and salaries for the year
ending 30 June 2022 (30 June 2021: $16,241 thousand). Refer Note 3(n).
7. Expenses
Included in the consolidated statement of profit or loss and other comprehensive income:
In thousands of AUD
Depreciation and amortisation
Acquisition and transaction costs
Restructuring costs
Make good expenses
Software for service
Loss on disposal of property, plant and equipment
8. Net finance costs
In thousands of AUD
Interest income
Derivative net change in fair value
Finance income
Interest expense
Financial assets net change in fair value
Net foreign exchange losses
Derivative net change in fair value
Finance costs
Net finance costs
88
2022
41,984
741
4,278
711
1,701
746
2022
56
-
56
(7,420)
(1,762)
(24)
(12)
(9,218)
(9,162)
2021
47,271
973
3,190
96
421
439
2021
202
315
517
(9,508)
(3,100)
(36)
-
(12,644)
(12,127)
IVE Group Limited 9. Taxes
In thousands of AUD
Current tax expense
Current year
Changes in estimates related to prior years
Deferred tax expense
Origination and reversal of temporary differences
Total tax expense
2022
2021
Restated*
14,350
(82)
14,268
(1,850)
12,418
12,110
(173)
11,937
139
12,076
2021
Restated*
36,331
10,899
1,198
(173)
152
12,076
Numerical reconciliation between tax expense and pre-tax accounting profit
In thousands of AUD
Profit before tax
Tax using the Company’s domestic
tax rate of 30%
(Non-assessable income) / non-deductible
expenses – (net)
Changes in estimates related to prior years
Other items (net)
2022
39,350
11,805
693
(82)
2
12,418
* Refer to Note 3(s) for further details.
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Assets
Liabilities
Net
In thousands of AUD
2022
2021
Property, plant and equipment
Right-of-use assets
Inventories
Intangible assets
Lease liabilities
Employee benefits
Provisions
Other items
-
-
-
-
-
-
-
-
34,775
32,061
11,056
2,881
957
9,148
2,371
1,260
2022
(307)
2021
(484)
2022
(307)
2021
(484)
(26,895)
(23,440)
(26,895)
(23,440)
(1,723)
(1,342)
(1,723)
(1,342)
(3,593)
(4,341)
(3,593)
(4,341)
-
-
-
-
-
-
-
-
34,775
32,061
11,056
2,881
957
9,148
2,371
1,260
Tax assets/(liabilities)
49,669
44,840
(32,518)
(29,607)
17,151
15,233
Set off of tax
(32,518)
(29,607)
32,518
29,607
-
-
Net deferred tax assets
17,151
15,233
-
-
17,151
15,233
89
Annual Report 2022 Notes to the consolidated financial statements – continued
9. Taxes (continued)
Movement in temporary differences during the year
2022
In thousands of AUD
Balance
1 July 2021
Disposal of
discontinued
operation
Acquisition
through
business
combination
Recognised
in equity
Recognised
in profit
or loss
Balance
30 June
2022
Property, plant
and equipment
(484)
Right-of-use assets
(23,440)
Inventories
Intangible assets
Lease liabilities
Employee benefits
Provisions
Other items
(1,342)
(4,341)
32,061
9,148
2,371
1,260
15,233
-
-
-
-
-
-
-
-
-
-
-
61
(780)
-
874
64
-
220
-
-
-
-
-
-
-
(152)
(152)
177
(307)
(3,455)
(26,895)
(442)
1,528
2,714
1,034
446
(152)
1,850
(1,723)
(3,593)
34,775
11,056
2,882
956
17,151
2021
In thousands of AUD
1 July 2020
Restated*
Disposal of
discontinued
operation
Acquisition
through
business
combination
Recognised
in equity
Recognised
in profit
or loss
Balance
30 June
2021
Property, plant
and equipment
1,353
Right-of-use assets
(29,146)
Inventories
Intangible assets
Lease liabilities
Employee benefits
Provisions
Other items
(1,510)
(5,842)
38,442
8,040
2,338
1,712
(2)
-
-
143
-
(211)
-
-
-
-
-
-
-
112
-
-
15,387
(70)
112
* Refer to Note 3(s) for further details.
-
-
-
-
-
-
-
(57)
(57)
(1,835)
(484)
5,706
(23,440)
168
1,358
(6,381)
1,207
33
(395)
(139)
(1,342)
(4,341)
32,061
9,148
2,371
1,260
15,233
The gross amount of capital losses for which no deferred tax asset is recognised is nil (2021: $2,064 thousand).
90
IVE Group Limited 10. Cash and cash equivalents
In thousands of AUD
Bank balances
Petty cash
Cash and cash equivalents in the
statement of cash flows
Reconciliation of cash flows from operating activities
2022
67,029
6
2021
106,468
6
67,035
106,474
In thousands of AUD
Profit from continuing operations
Profit from discontinued operations
Non-cash items
Depreciation, amortisation and impairment
Share based payment expense
Derivative net change in fair value
Interest expense
Financial assets net change in fair value
Income tax expense
Other income and expenses (net)
Loss on disposal of property, plant
and equipment
Cash items
Acquisition in investing activities
Change in trade and other receivables
Change in inventories
Change in current assets
Change in prepayment
Change in trade and other payables
Change in provisions and employee benefits
Cash generated from operating activities
Income tax paid
Net cash from operating activities
* Refer to Note 3(s) for restatement.
2022
26,932
–
41,984
1,540
12
4,205
1,762
12,418
264
746
325
90,188
(12,043)
(26,871)
(885)
(1,188)
32,013
2,283
83,497
(11,821)
71,676
2021
Restated*
24,255
628
47,271
265
(315)
630
3,100
12,076
607
439
570
89,526
735
12,461
1,773
(520)
13,178
1,076
118,229
(12,064)
106,165
91
Annual Report 2022 Notes to the consolidated financial statements – continued
11. Trade and other receivables
In thousands of AUD
Current
Trade receivables
Allowance for impairment
Derivative receivable
Lease and other receivables
Non-current
Lease receivables
12. Inventories
In thousands of AUD
Finished goods
Work in progress
Raw materials
Allowance for inventory obsolescence
2022
2021
116,742
(3,124)
113,618
-
163
101,530
(2,008)
99,522
315
571
113,781
100,408
307
-
2022
6,087
17,103
52,982
76,172
(2,008)
74,164
2021
3,368
13,578
28,198
45,144
(1,300)
43,844
During the year, raw materials, consumables and changes in finished goods and work in progress recognised
as cost of sales amounted to $405,276 thousand (2021: $340,465 thousand).
During the year, an analysis of aged inventory and previous write-offs was performed which resulted in an
increase in provision amounting to $708 thousand (2021: $340 thousand).
92
IVE Group Limited 13. Property, plant and equipment
In thousands of AUD
Cost
Leasehold
improvements
Plant and
equipment
Capital
work in
progress
Land
and
buildings
Fixtures
and
fittings
Total
Balance at 1 July 2020
19,971
147,243
1,404
-
2,211
170,829
Acquisitions through
business combination
Additions
Transfer within PPE
Disposals
Balance at 30 June 2021
Balance at 1 July 2021
Acquisitions through
business combination
Additions
Disposals
-
-
1,926
3,646
-
-
97
(920)
21,897
150,066
21,897
150,066
-
2,772
3,255
(1,246)
8,188
(319)
-
-
(97)
-
1,307
1,307
-
486
-
2,000
-
2,000
-
-
-
110
5,682
-
-
-
(920)
2,000
2,000
2,321
177,591
2,321
177,591
-
-
-
-
2,772
328
12,257
-
(1,565)
Balance at 30 June 2022
23,906
160,707
1,793
2,000
2,649
191,055
Depreciation and impairment losses
Balance at 1 July 2020
Depreciation for the year
Disposals
Balance at 30 June 2021
Balance at 1 July 2021
Depreciation for the year
Disposals
6,912
2,027
55,856
12,103
-
(502)
8,939
8,939
1,869
(497)
67,457
67,457
12,092
(133)
Balance at 30 June 2022
10,311
79,416
-
-
-
-
-
-
-
-
-
-
-
-
25
-
25
929
144
-
1,073
1,073
63,697
14,274
(502)
77,469
77,469
142
14,128
-
(630)
1,215
90,967
Carrying amounts
At 1 July 2021
At 30 June 2022
Security
12,958
82,609
13,595
81,291
1,307
1,793
2,000
1,975
1,248
100,122
1,434
100,088
At 30 June 2022, the carrying amount of total assets less the written down value of finance leased assets were
held as security for bank facilities.
93
Annual Report 2022 Notes to the consolidated financial statements – continued
14. Leases
A. Leases as lessee
The Group leases warehouses and factory facilities. The leases typically run up to a period of 10 years, with
an option to renew the lease after that date. Lease payments are renegotiated periodically to reflect market
rentals. Some leases provide for additional rent payments that are based on changes in local price indices.
These leases were entered into many years ago as combined leases of land and buildings.
The Group also leases production equipment under a number of leases with contract terms of one to five years.
The Group leases IT equipment with contract terms of one to three years. These leases are short-term and/or
leases of low-value items. The Group has elected not to recognise right-of-use assets and lease liabilities for
these leases.
Information about leases for which the Group is a leasee is presented below.
(i) Right-of-use assets
The carrying amounts of right-of-use assets are as below.
In thousands of AUD
Balance as at 1 July 2020
Depreciation charge for the year
Additions/modifications to right-of-use assets
Disposals of right-of–use assets
Balance as at 30 June 2021
Balance as at 1 July 2021
Depreciation charge for the year
Acquisitions through business combination
Additions/modifications to right-of-use assets
Disposals of right-of–use assets
Balance as at 30 June 2022
(ii) Amounts recognised in profit or loss
In thousands of AUD
Interest on lease liabilities
Income from sub-leasing right-of-use assets
Expenses relating to short-term leases
Expenses relating to leases of low-value assets,
excluding short-term leases of
low-value assets
(iii) Amounts recognised in statement of cash flows
In thousands of AUD
Total cash outflow for leases
94
Property, plant and equipment
Property
Production
equipment
Total
91,882
(18,513)
3,370
(193)
76,546
76,546
(18,002)
596
31,202
(719)
89,623
23,666
(7,448)
3,464
-
19,682
19,682
(3,417)
-
29
-
115,548
(25,961)
6,834
(193)
96,228
96,228
(21,419)
596
31,231
(719)
16,294
105,917
2022
3,798
136
228
690
2021
4,293
134
134
829
2022
29,081
2021
29,904
IVE Group Limited (iv) Extension options
Some property leases contain extension options exercisable before the end of the non-cancellable contract
period. Where practicable, the Group seeks to include extension options in new leases to provide operational
flexibility. The extension options held are exercisable only by the Group and not by the lessors. The Group
assesses at lease commencement date whether it is reasonably certain to exercise the extension options. The
Group reassesses whether it is reasonably certain to exercise the options if there is significant event or changes
in circumstances within its control.
B. Leases as lessor
The Group leases out some its leased properties. All leases are classified as operating leases from a lessor
perspective with the exception of a sub-lease, which the Group classified as a finance sub-lease.
(i) Finance lease
During the year, the Group recognised $12 thousand interest income on lease receivables (2021: nil).
The following table sets out the maturity analysis of lease receivables, showing the undiscounted lease
payments to be received after the reporting date.
In thousands of AUD
Less than one year
Total undiscounted lease receivable
Unearned finance income
Net investment in the lease
(ii) Operating lease
2022
163
490
(20)
470
2021
-
-
-
-
The Group has classified some sub-leased property as operating leases, because they do not transfer
substantially all of the risks and rewards incidental to the ownership of the assets.
Rental income recognised by the Group during the year was $137 thousand (2021: $134 thousand).
The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments
to be received after the reporting date.
In thousands of AUD
Less than one year
Between one to five years
More than five years
Total
2022
68
159
-
227
2021
86
155
-
241
95
Annual Report 2022 Notes to the consolidated financial statements – continued
15. Intangible assets and goodwill
In thousands of AUD
Note
Goodwill
Computer
software
restated*
Capital
work in
progress
restated*
Customer
relationships
Total
Cost
Balance at 1 July 2020
156,678
16,058
-
-
2,890
(306)
36,269
211,895
-
(306)
156,678
16,058
2,584
36,269
211,589
-
(1,115)
(11,586)
Opening restatement*
Balance at 1 July 2020
(restated)
Disposal
Transfer to/(from) computer
software
Other additions
Balance at 30 June 2021
Balance at 1 July 2021
Acquisition
Disposal
Transfer to/(from) computer
software
Other additions
Amortisation and
impairment losses
Balance at 1 July 2020
Disposal
Amortisation for the year
Balance at 30 June 2021
Balance at 1 July 2021
Amortisation for the year
Balance at 30 June 2022
Carrying amounts
At 1 July 2021
At 30 June 2022
* Refer to Note 3(s) for further details.
(9,984)
-
-
146,694
146,694
684
-
-
-
(487)
2,056
3,400
21,027
21,027
229
(74)
265
1,159
40,000
10,600
-
-
40,000
40,000
-
-
3,110
13,710
13,710
3,046
40,000
16,756
(2,056)
-
528
528
-
-
(265)
4,952
5,215
-
-
-
-
-
-
-
106,694
107,378
7,317
5,850
528
5,216
-
-
35,154
35,154
2,600
-
-
-
-
3,400
203,403
203,403
3,513
(74)
-
6,111
37,754
212,953
16,226
(637)
3,926
19,515
19,515
3,390
22,905
15,639
14,849
66,826
(637)
7,036
73,225
73,225
6,436
79,661
130,178
133,293
Balance at 30 June 2022
147,378
22,606
No impairment losses in relation to goodwill have been recognised in the year ended 30 June 2022 (2021 nil).
96
IVE Group Limited Impairment testing for cash-generating units containing goodwill
The Group completes impairment testing for eight CGUs. The goodwill allocated to six CGUs included in the
‘Production & Distribution (group of CGUs)’ is not significant and has been grouped for disclosure purposes as
the key assumptions are the same. The carrying amount of any goodwill summarised by operating division is
set out below:
In thousands of AUD
Production (Franklin WEB CGU)
Production & Distribution (group of CGUs)
Data-Driven Communications (group of CGUs)
2022
29,141
39,731
38,506
2021
29,141
39,047
38,506
107,378
106,694
Goodwill impairment test is performed by applying value in use calculations. The calculations for all CGU’s use
nominal cash flow projections based on FY23 budgeted EBITDA approved by the Board. The EBITDA has been
developed using past experience and industry knowledge. A pre-tax WACC rate has been used based on the
size and nature of each CGU. Also, a nominal growth allowance in the 5 year and terminal growth cash flow
projections has been made in determining management’s estimate of the long-term compound EBITDA of each
CGU. The WACC and growth rates are:
WACC rate
(pre-tax nominal)
Growth rate
Production (Franklin WEB CGU)
11.8% (2021:10.1%)
1% (2021:1%)
Production & Distribution (group of CGUs)
12.1% to 13.7%
(2021:9.9% to 11.8%)
1% to 2%
(2021:1% to 2%)
Data-Driven Communications
15.4% (2021:12.8%)
2% (2021:2%)
There are no reasonable possible changes in assumptions that would give rise to impairment.
16. Other assets
In thousands of AUD
Current
Contract assets
Other assets
Non-current
Contract assets
17. Trade and other payables
In thousands of AUD
Current
Trade payables
Accrued expenses
2022
2021
3,491
1,147
4,638
2,554
2,554
1,056
647
1,703
-
-
2022
2021
88,717
35,656
124,373
64,909
26,810
91,719
97
Annual Report 2022 Notes to the consolidated financial statements – continued
18. Loans and borrowings
In thousands of AUD
Current
Equipment finance
Non-current
Bank loan
Equipment finance
Bank loan
2022
2021
3,764
2,791
124,214
5,987
130,201
159,424
7,620
167,044
As at 30 June 2022, the amended Syndicated Facilities Agreement has a carrying amount of $124,214
thousand and face value of $125,000 thousand (2021: carrying amount of $159,424 thousand and face value
of $160,000 thousand). During the year, the Group refinanced these facilities at an interest rate of BBSY plus a
margin, and maturity date of 6 May 2026. The Group was in compliance with all loan covenants as at
30 June 2022.
19. Employee benefits
In thousands of AUD
Current
Liability for long service leave
Liability for annual leave
Non-current
Liability for long service leave
2022
2021
11,499
12,912
24,411
6,714
31,125
8,931
9,919
18,850
6,568
25,418
98
IVE Group Limited 20. Provisions
In thousands of AUD
Balance at 1 July 2021
Provisions made during the year
Provisions reversed during the year
Balance at 30 June 2022
Current
Non-current
Refer to Note 3(j) on the nature of the provision.
21. Other liabilities
In thousands of AUD
Current
Contract liabilities
Contingent consideration
Forward exchange contracts used for hedging
Non-current
Contingent consideration
Forward exchange contracts used for hedging
Make good
4,745
1,337
(706)
5,376
-
5,376
5,376
2022
2021
13,888
1,063
398
15,349
575
636
1,211
8,263
-
222
8,485
-
854
854
99
Annual Report 2022 Notes to the consolidated financial statements – continued
22. Share-based payments
During the year ended 30 June 2022, the company granted Performance Share Rights (Rights) under the Equity
Incentive Plan (EIP). The Rights are an entitlement to receive fully paid ordinary IVE Group Limited Shares on a
one-for-one basis. Further details on the Rights are described below.
Type of arrangement
Senior Leadership Team Award
Date of grant
Number granted
Contractual life
Vesting conditions
23 November 2021
823,526
3 years and 2 months
The Rights are subject to the following Performance Conditions:
sixty percent of the Rights are referenced against achieving
Earnings Per Share Target (EPS), and forty percent are referenced
against achieving Relative Shareholder Return (TSR) target.
The performance period is 1 July 2021 to 30 June 2024 inclusive.
The vesting date is expected to be on or soon after the approval
of IVE’s 2024 Annual Financial Report.
Weighted average fair value
$1.19
Valuation methodology
Expected dividend
The EPS target was calculated using a risk-neutral assumption,
whereas the TSR target has been valued using a Monte Carlo
simulation approach.
Holders of performance share rights are not entitled to receive
dividends prior to vesting.
Other key valuation assumptions
Share price at valuation date
$1.6509
Expected volatility
Risk free interest rate
Dividend yield
52%
0.15%
7.82%
Share rights issued to Directors required shareholder approval. This occurred at the Group’s 2021 Annual General Meeting.
During the year, 824 thousand Rights were granted (2021: 1,885 thousand), 530 thousand lapsed (2021:
159 thousand), and 3,355 thousand remain outstanding (2021: 3,061 thousand). The total expense relating to
the Rights granted was $298 thousand (for the year ended 30 June 2021: $265 thousand).
The company also issued 751,996 shares to employees with a value of $1,218 thousand (2021: nil), and cash
settled with a value of $25 thousand (2021: nil).
These expenses are included in Note 6 of the consolidated financial statements.
100
IVE Group Limited 23. Capital and reserves
Issued and paid up capital (In thousands of AUD)
143,508,948 (June 2021: 142,756,952) ordinary
shares fully paid
Movement in ordinary share capital
Date
Details
2022
148,878
2021
149,066
Number of
shares
Issue
price
1-Jul-20
Opening balance
148,207,285
21 December 2020 to
30 June 21
Share buyback (including
transaction costs)
(5,450,333)
highest price
paid: $1.59 /
lowest price
paid $1.23
30-Jun-21
Closing balance
142,756,952*
1-Jul-21
1-Jul-21
23-Sep-21
30-Jun-22
Opening balance
142,756,952
Share buyback (including
transaction costs)
-
Employee share issue
751,996
Closing balance
143,508,948
Total
$’000
156,502
(7,436)
149,066
149,066
(188)
-
148,878
*Included in the number of share buyback during the year were 83,697 shares that were bought on 30 June 2021, but cancelled on
2 July 2021. As at 30 June 2021, 142,840,649 shares were on issue.
Dividends
On 25 August 2022, the directors declared a fully franked dividend of 8.0 CPS to be paid on 13 October
2022 to shareholders on the register at 14 September 2022. The final dividend payout is $11,481 thousand
(2021: $9,993 thousand). A liability has not been recognised as the dividend was declared after the
reporting date.
The following dividends were declared and paid during the year ended 30 June 2022:
In thousands of AUD
Cents per share
Total amount
Date of payment
2022
Final 2021 ordinary
Interim 2022 ordinary
Total amount
7.0
8.5
9,993
12,198
22,191
14 October 2021
14 April 2022
On 14 October 2021 a dividend of 7 CPS (100% franked) was declared and paid by the directors. The dividend
was paid out of opening retained profits and profits earned up to that date.
On 14 April 2022 a further dividend of 8.5 CPS (100% franked) was declared and paid by the directors. The
dividend was paid out of opening retained profits and profits earned up to that date.
101
Annual Report 2022 Notes to the consolidated financial statements – continued
23. Capital and reserves (continued)
The following dividends were declared and paid during the year ended 30 June 2021:
In thousands of AUD
2021
Interim 2021 ordinary
Dividend franking account
In thousands of AUD
Amount of franking credits available to
shareholders of IVE Group Limited for subsequent
financial years
Cents per share
Total amount
Date of payment
7.0
10,282
15 April 2021
2022
18,310
2021
16,441
The ability to utilise the franking credits is dependent upon the ability to declare dividends.
Reserves
Included within reserves are the fair value of hedged derivative instruments, and foreign currency translation
reserve balances.
24. Earnings per share
In dollars
Basic earnings per share
Diluted earnings per share
Basic earnings per share – continuing operations
Diluted earnings per share – continuing operations
In thousands
Earnings
2022
0.19
0.19
0.19
0.19
2021
Restated*
0.20
0.20
0.17
0.17
Profit after income tax attributable to owners of the company used
in calculating basic and diluted earnings per share
26,932
29,060
Profit after income tax attributable to owners of the company used
in calculating basic and diluted earnings
per share – continuing operations
26,932
24,255
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in calculating
basic earnings per share
Weighted average number of ordinary shares used in calculating
diluted earnings per share
* Refer to Note 3(s) for further details.
143,336
146,851
145,057
147,734
102
IVE Group Limited 25. Acquisitions
On 31 October 2021, IVE acquired selected assets of Active Display Group’s (ADG) retail display
and 3PL business, and 100% shares in fabric printing business of AFI Branding Solutions Pty Ltd (AFI).
These acquisitions further strengthen IVE’s product offerings to its customers. IVE is in the process
of integrating these businesses into its Production & Distribution business units.
The following summarises the major classes of consideration transferred, and the provisionally recognised
amounts of assets acquired and liabilities assumed at the acquisition date:
In thousands of AUD
Consideration transferred
Initial cash paid
Completion cash adjustment received*
Contingent consideration
Identifiable assets acquired and liabilities assumed
Trade and other receivables
Inventories
Prepayments
Other current assets
Property, plant and equipment
Right of use asset
Intangible asset
Deferred tax assets/(liabilities)
Trade and other payables
Employee benefits
Provisions
Lease Liability
Goodwill on acquisition
ADG
AFI
Total
3,500
(603)
-
2,897
-
1,343
58
-
1,442
-
2,300
52
(319)
(2,257)
(80)
-
2,539
358
1,738
-
1,638
3,376
869
2,106
69
31
1,330
596
529
168
(1,335)
(657)
(60)
(596)
3,050
326
5,238
(603)
1,638
6,273
869
3,449
127
31
2,772
596
2,829
220
(1,654)
(2,914)
(140)
(596)
5,589
684
* The completion adjustment includes working capital and balance sheet date adjustments. These adjustments are made in the
ordinary course of a transaction to reflect the difference between normalised expectations around balance sheet items at the
time of signing and actual balances on transaction completion.
As part of the consideration transferred, contingent consideration is expected to be payable. The Group has
made a best estimate of the amount of consideration payable for the acquisition where there is a variable
purchase price based on future revenue performance. Based on past and expected performance the Group
assumes that the acquirees will meet the future revenue target. Any variation at time of settlement will be
recognised as an expense or income.
Management have measured the assets and liabilities acquired at fair value. The fair value of property,
plant and equipment, deferred tax assets has been measured on a provisional basis pending the completion
of a final valuation. If new information obtained within one year from the acquisition date about facts
and circumstances that existed at the acquisition date identifies adjustments to the above amounts, or
any additional provisions that existed at the acquisition date, then the accounting for the acquisition will
be revised.
The goodwill is attributable to the future profitability of the acquisitions and the synergies expected to arise
within the Group. None of the goodwill recognised is expected to be deductible for tax purposes.
103
Annual Report 2022 Notes to the consolidated financial statements – continued
25. Acquisitions (continued)
As these businesses are being integrated into IVE the profit before tax contribution from these acquisitions
are indistinguishable from existing business unit results. On this basis a disclosure of profit before tax is
impracticable. The total revenue since acquisition is $30,011 thousand. Individually these businesses are
considered immaterial.
If this acquisition had occurred from beginning of the reporting period the combined Group revenue would
have been estimated at $775,725 thousand. The Group has not estimated the profit before tax for the reasons
provided above.
Acquisition-related costs totalling $325 thousand has been included in Other expenses in the Group’s
consolidated statement of profit or loss and other comprehensive income.
26. Operating segments
The Group has identified one operating segment (whole of business) based on the internal reports that are
reviewed and used by the Board (Chief Operating Decision Maker or ‘CODM’) in assessing performance and in
determining the allocation of resources. The Board reviews the internal report on a monthly basis.
The key measure of performance used by the CODM to assess performance is earnings before interest, tax,
depreciation and amortisation (EBITDA).
A reconciliation of the reportable segment’s EBITDA to profit before income tax expense is shown below.
Profit and loss, total assets and liabilities for the reportable segment is consistent with the primary statements
included in this consolidated interim financial report.
In thousands of AUD
EBITDA
Depreciation, amortisation and impairment
Net finance costs
Profit before income tax
* Refer to Note 3(s) for restatement.
2022
90,496
(41,984)
(9,162)
39,350
2021
Restated*
95,729
(47,271)
(12,127)
36,331
104
IVE Group Limited 27. Financial risk management and financial instruments
Overview
The Group has exposure to the following risks from its use of financial instruments:
a. Credit risk
b. Liquidity risk
c. Market risk
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives,
policies and processes for measuring and managing risk, and the Group’s management of capital. Further
quantitative disclosures are included throughout these consolidated financial statements.
Risk management framework
The Company’s board of directors has overall responsibility for the establishment and oversight of the
Group’s risk management framework. The CFO is responsible for developing and monitoring the Group’s risk
management policies. He reports regularly to the Board of Directors on its activities.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to
set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies
and systems are reviewed regularly to reflect changes in market conditions and the Group activities. The
Group, through its training and management standards and procedures, aims to maintain a disciplined and
constructive control environment in which all employees understand their roles and obligations.
The Group Audit & Risk Committee oversees how management monitors compliance with the Group’s risk
management policies and procedures, and reviews the adequacy of the risk management framework in
relation to the risks faced by the Group.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations, and arises principally from the Group’s receivables from customers.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to
credit risk at the reporting date was:
In thousands of AUD
Cash and cash equivalents
Trade and other receivables
Derivative receivable
Lease and other receivables
Contract assets
Note
10
11
11
11
16
Carrying amounts
2022
67,035
116,742
-
470
6,045
2021
106,474
101,530
315
571
1,056
190,292
209,946
Trade, lease and other receivables, and contract assets
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, management also considers the factors that may influence the credit risk of its customer base,
including the default risk associated the industry under the current economic environment. Additional
allowances have been made for this uncertainty.
The Group has no significant concentrations of credit risk. The Group has policies in place to ensure that sales
of services are made to customers with an appropriate credit history based on enquiries through the Group’s
Finance department. Ongoing customer credit performance is monitored on a regular basis.
105
Annual Report 2022 Notes to the consolidated financial statements – continued
27. Financial risk management and financial instruments (continued)
The aging of the trade, lease and other receivables and contract assets at the end of the reporting period that
were not impaired was as follows:
In thousands of AUD
Neither past due nor impaired
Past due 1–30 days
Past due 31–90 days
Past due 91 days and over
Carrying amounts
2022
76,952
28,973
10,485
6,848
2021
61,401
27,405
10,527
3,824
123,257
103,157
The movement in the allowance for impairment in respect of receivables during the year was as follows:
In thousands of AUD
Balance at beginning of the year
Assumed in a business combination in
current year
Impairment loss recognised
Amounts written off
Balance at end of year
Liquidity risk
2022
2,008
34
1,257
(175)
3,124
2021
2,220
-
524
(736)
2,008
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Group’s reputation.
The Group manages working capital and forecasts cash flow to meet its financial obligations.
The Group at 30 June 2022 had undrawn facility of $35,000 thousand (2021: $30,000 thousand) for general
corporate and working capital purpose. On 7 July 2022, the Group repaid $20,000 thousand of the bank loan
increasing the undrawn facility to $55,000 thousand. The facility will mature on 6 April 2026.
106
IVE Group Limited The following are the remaining contractual maturities of financial liabilities at the reporting date.
The amounts are gross and undiscounted, and include estimated interest payments:
30 June 2022
In thousands of AUD
Contractual cash flows
Carrying
amount
Total
12 mths
or less
1–5
years
More than
5 years
Non-derivative financial liabilities
Trade and other payable
124,373
124,373
124,373
-
-
Lease liabilities
Equipment finance
Bank loans
Derivative financial liabilities
Forward exchange contracts used
for hedging
124,716
146,450
32,367
87,165
26,918
9,751
10,451
124,214
141,368
3,764
4,267
6,832
137,101
-
-
383,054
422,642
164,771
231,098
26,918
1,034
1,034
1,034
1,034
398
398
636
636
-
-
30 June 2021
In thousands of AUD
Contractual cash flows
Carrying
amount
Total
12 mths
or less
1–5
years
More than
5 years
Non-derivative financial liabilities
Trade and other payable
91,719
91,719
Lease liabilities
Equipment finance
Bank loans
119,760
129,725
10,411
11,051
159,424
168,414
91,719
27,937
3,194
3,056
-
92,723
7,857
165,358
-
9,065
-
-
381,314
400,909
125,906
265,938
9,065
Derivative financial liabilities
Forward exchange contracts used
for hedging
1,076
1,076
1,076
1,076
222
222
854
854
-
-
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, equity prices
and interest rates will affect the Group’s income or the value of its holdings of financial instruments.
The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return.
107
Annual Report 2022 Notes to the consolidated financial statements – continued
27. Financial risk management and financial instruments (continued)
Currency risk
The Group is exposed to currency risk to the extent that there is a mismatch between the currencies in
which purchases are denominated and the respective functional currencies of Group entities. The functional
currency of the Group is the Australian dollar (AUD). The currencies in which these transactions are primarily
denominated are Euro, US dollars and AUD.
During the year, 3% (2021: 3%) of total group purchases were made in foreign currencies. The Group has used
forward exchange contracts to hedge its currency risk, most with a maturity of less than one year from the
reporting date. These forward exchange contracts have been designated as a cash flow hedge, and have
$13 thousand fair value at the reporting date (2021: zero fair value). The Group has performed effectiveness
testing and recognised the full fair value amount net of deferred tax $9 thousand in other comprehensive
income (2021: nil). Based on the results of the test no in-effectiveness has been recognised in the profit or loss.
Exposure to currency risk
The summary quantitative data about the Group’s exposure to currency risk as reported to the management of
the Group is as follows:
In thousands of AUD
Equipment finance loan
Next three months forecast purchases
Forward exchange contracts
Net exposure
Sensitivity analysis
As at 30 June 2022
As at 30 June 2021
Euro
8,808
392
(9,200)
-
NZD
Euro
USD
-
12,144
676
(676)
-
-
(12,144)
-
-
1
(1)
-
The impact of exchange rate movements on profit is subject to other variables including movement in market
prices. The impact of exchange rate movements on profit and loss is not material.
108
IVE Group Limited Interest rate risk
The Group has the ability to enter into interest rate swap contracts to minimise its variable interest exposure on
bank loans. As at 30 June 2022, no interest rate swap contracts were outstanding, hence $124,214 thousand of
the carrying amount of the bank loan is exposed to variable rates (2021: $94,424 thousand).
Exposure to interest rate risk
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:
In thousands of AUD
Fixed rate instruments
Carrying amounts
2022
2021
Financial liabilities – leases liabilities
(124,716)
(119,760)
Financial liabilities – equipment finance
Effect of interest rate swaps – notional amount
Variable rate instruments
Financial assets – bank balances
Financial liabilities – bank loans
Financial liabilities – equipment finance
Effect of interest rate swaps – notional amount
(2,623)
-
(127,339)
67,035
(124,214)
(7,128)
-
(64,307)
(10,411)
65,000
(65,171)
106,474
(160,000)
-
65,000
11,474
Fair value sensitivity analysis for fixed rate instruments
The Group accounts for any fixed rate financial assets and liabilities at fair value through profit or loss.
Cash flow sensitivity analysis for variable rate instruments
A change of 10 basis points in interest rates at the reporting date would have increased (decreased) profit
or loss by $65 thousand (2021: $11 thousand). This analysis assumes that all other variables, in particular
foreign currency rates, remain constant. The analysis is performed on the same basis as 2021.
109
Annual Report 2022 Notes to the consolidated financial statements – continued
27. Financial risk management and financial instruments (continued)
Measurement of fair values
The table below gives information on the valuation technique and unobservable inputs of financial assets or
liabilities categorised as a Level 2 and 3 in the fair value hierarchy.
Type
Valuation technique
Financial
asset
(level 2)
Forward
exchange
contracts
(level 2)
The valuation is based on market
share price of the investee after
taking into account the Group’s
economic interest, and lack of voting
rights and marketability.
The fair value is determined using
quoted forward exchange rates and
present value of estimated future
cash flow based on observable
yield curves.
Significant
unobservable inputs
The Group’s economic
interest, and lack
of voting rights and
marketability.
Relationship between
the fair value and
unobservable inputs
The unobservable
inputs are applied as
a fixed percentage
discount to the fair
value.
Not applicable
Not applicable
Contingent
consideration
(level 3)
The fair value is calculated based
on the acquired business achieving
future revenue target.
Forecast revenue
growth of $14,000
thousand.
If the applicable
performance targets
for the acquisition is
higher or lower than
expected by 10%,
then the contingent
consideration value
will be increased
or decreased by
approximately
$0.2 million.
Fair values versus carrying amounts
As at the reporting date, the carrying value of other financial assets and liabilities as at the end of the
financial year are considered to approximate their fair value.
Capital management
The primary objective of the Group's capital management is to maintain a strong capital base through cash
flow management in order to sustain future development of the business and maximise shareholder value.
There were no changes in the Group's approach to capital management during the year. The Group is subject
to externally imposed capital requirements (being financial loan covenants – refer to Note 17).
110
IVE Group Limited 28. Capital commitments
As at 30 June 2022, the Group has $6,163 thousand commitment to purchase plant and equipment
(2021: $950 thousand).
29. Related parties
Key management personnel compensation
Key management personnel compensation comprised the following:
In AUD
Short-term employee benefits
Post-employee benefits
Share-based payments
Other long-term benefits
Related party transactions and outstanding balances
In AUD
2022
3,374,249
125,295
171,893
34,022
2021
3,249,298
113,598
163,752
32,416
3,705,459
3,559,065
Transaction value
year ended
30 June 2022
Transaction value
year ended
30 June 2021
Caxton Property Developments Pty Ltd – sales
5,885
3,606
There are no outstanding receivables or payables with related parties.
Paul Selig (director of the Company), holds positions in Caxton Property Developments Pty Ltd that results in
him having control or significant influence over the financial or operating policies of this entity.
During the year ending 30 June 2022, the Group sold goods and services to Caxton Property Developments
Pty Ltd.
The terms and conditions of the transactions above were no more favourable than those available, or
which might reasonably be expected to be available, on similar transactions to other third parties on an
arm’s length basis.
111
Annual Report 2022 Notes to the consolidated financial statements – continued
30. Group entities
Ultimate parent entity
IVE Group Limited
Controlled entities
Caxton Print Group Holdings Pty Limited
Caxton Print Group Pty Limited
IVE Group Australia Pty Limited
IVE Group Victoria Pty Limited
Task 2 Pty Limited
Pareto Fundraising Pty Limited
James Bennett & Associates Pty Limited
IVE Employment (Australia) Pty Limited
IVE Employment (Victoria) Pty Limited
Taverners No. 13 Pty Limited
AIW Printing (Aust) Pty Limited
AIW Printing Unit Trust
IVE Group Asia Limited
Guangzhou IVE Trading Company Limited
SEMA Holdings Pty Ltd
SEMA Infrastructure Pty Ltd
SEMA Operations Pty Ltd
John W Gage & Co Pty Ltd
IVE Distribution Pty Ltd
Lasoo Pty Ltd
Reach Media New Zealand Limited
IVE Group Limited Employee Share Trust
AFI Branding Solutions Pty Ltd
Ownership interest
2022
%
2021
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
All entities are incorporated in Australia except for: IVE Group Asia Limited (incorporated in Hong Kong, China), Guangzhou IVE
Trading Company Limited (incorporated in China), and Reach Media New Zealand Limited (incorporated in New Zealand).
112
IVE Group Limited 31. Parent entity disclosures
As at, and throughout, the financial year ending 30 June 2021 the parent entity of the Group was
IVE Group Limited.
In thousands of AUD
Result of parent entity
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income for the year
Financial position of parent entity at year/period end
Current assets
Total assets
Current liabilities
Total liabilities
Total equity of the parent entity comprising of:
Share capital
Equity reserve
Accumulated losses (net of dividend paid)
Total equity
2022
(1,220)
-
(1,220)
94
25,446
110
110
280,191
(147,880)
(109,411)
25,336
2021
(0.2)
-
(0.2)
574
47,887
171
171
280,378
(146,662)
(86,000)
47,716
IVE Group Limited was incorporated on 10 June 2015, but did not undertake any trading activities until its
listing (IPO) on the Australian Stock Exchange (ASX) on 16 December 2015 where it also contemporaneously
acquired Caxton Print Group Holdings Pty Ltd (CPGH).
An internal restructure took place resulting in IVE Group Limited becoming the holding company of CPGH.
The Directors elected to account for the restructure as a capital re-organisation rather than a business
combination. In the Directors’ judgement, the continuation of the existing accounting values is consistent with
the accounting that would have occurred if the assets and liabilities had already been in a structure suitable
to IPO and most appropriately reflects the substance of the internal restructure. As such, the consolidated
financial statements of the new IVE Group have been presented as a continuation of the pre- existing
accounting values of assets and liabilities in CPGH’s financial statements.
Accordingly, the other equity reserve represents the difference between the fair value of the share capital at
the date of the IPO and historical book values of the assets and liabilities of the Group.
32. Subsequent events
On 14 September 2022 (following ACCC clearance on 30 August 2022), the Group completed the acquisition of
substantially all of the printing and finishing assets of Ovato, IVE’s largest print competitor. The net purchase
consideration (including transaction costs) of $16m was funded from existing facilities, with integration and
associated capital expenditure costs over the coming 12-18 months expected to be approximately $22m.
To preserve our balance sheet strength and to ensure our capacity to fund future growth initiatives post the
Ovato acquisition, the Company successfully completed a $19.3m capital raising (8.58m shares issued at
$2.25 per share) in October 2022.
Aside from the above, there have been no other events subsequent to balance date which would have a
material effect on the Group’s consolidated financial statements at 30 June 2022.
113
Annual Report 2022 Notes to the consolidated financial statements – continued
33. Auditors’ remuneration
In AUD
Audit services
Auditors of the Company – KPMG
Audit and review of financial reports
Other services
Auditors of the Company – KPMG
Taxation services
Transaction services
2022
2021
403,415
403,415
391,460
391,460
114,300
-
114,300
116,829
90,950
207,779
34. Deed of cross guarantee
Pursuant to ASIC Corporations (Wholly owned Companies) Instrument 2016/785 the wholly-owned subsidiaries
listed below are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of
financial reports, and directors’ reports.
It is a condition of the Instrument that IVE Group Limited (the Company) and each of the subsidiaries enter
into a Deed of Cross Guarantee. The effect of the Deed is that the Company guarantees to each creditor
payment in full of any debt in the event of winding up of any of the subsidiaries under certain provisions of the
Corporations Act 2001. If a winding up occurs under other provisions of the Act, the Company will only be liable
in the event that after six months any creditor has not been paid in full. The subsidiaries have also given similar
guarantees in the event that the Company is wound up.
The Company and its subsidiaries amended its Deed of Cross Guarantee on 18 February 2022. The subsidiaries
subject to the Deed are:
a. Caxton Print Group Holdings Pty Limited
j. Taverners No. 13 Pty Limited
b.
IVE Group Australia Pty Limited
k. AIW Printing (Aust) Pty Limited
c.
IVE Group Victoria Pty Limited
l. SEMA Holdings Pty Limited
d. Caxton Print Group Pty Limited
m. SEMA Infrastructure Pty Limited
e. Task 2 Pty Limited
n. SEMA Operations Pty Limited
f. Pareto Fundraising Pty Limited
o. John W. Gage & Co Pty Limited
g. James Bennett & Associates Pty Limited
p.
IVE Distribution Pty Limited
h.
IVE Employment (Australia) Pty Limited
q. Lasoo Pty Limited
i.
IVE Employment (Victoria) Pty Limited
r. AFI Branding Solutions Pty Limited
114
IVE Group Limited The following consolidated statement of profit or loss and other comprehensive income and consolidated
statement of financial position, comprising the Company and controlled entities, which are a party to the
Deed, after eliminating all transactions between parties to the Deed of Cross Guarantee, for the year ended
30 June 2022, are:
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2022
In thousands of AUD
Revenue
Results from operating activities
Finance income
Finance costs
Net finance costs
Profit before tax
Income tax expense
Profit from continuing operations
Discontinued operation
Profit from discontinued operation, net of tax
Profit for the year
Cash flow hedges
Total other comprehensive income
Reconciliation of movement in retained earnings
Balance reported at 1 July 2021
Profit for the year
Dividends to owners of the Company
Balance at 30 June 2022
* Refer to Note 3(s) for restatement.
2022
738,543
47,700
56
(9,218)
(9,162)
38,538
(12,417)
26,121
-
26,121
343
26,464
26,860
26,121
(22,191)
30,790
2021
Restated*
639,009
48,444
517
(12,644)
(12,127)
36,317
(12,254)
24,063
4,177
28,240
132
28,372
8,902
28,240
(10,282)
26,860
115
Annual Report 2022 Notes to the consolidated financial statements – continued
34. Deed of cross guarantee (continued)
Consolidated statement of financial position
As at 30 June 2022
In thousands of AUD
2022
2021
Restated*
Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Financial asset
Other current assets
Total current assets
Deferred tax assets
Trade and other receivables
Property, plant and equipment
Right of use assets
Intangible assets and goodwill
Other non-current assets
Total non-current assets
Total assets
Liabilities
Trade and other payables
Lease liabilities
Loans and borrowings
Employee benefits
Current tax payable
Other current liabilities
Total current liabilities
Loans and borrowings
Lease liabilities
Employee benefits
Provisions
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Retained earnings
Total equity
* Refer to Note 3(s) for restatement.
116
64,579
110,330
74,157
5,053
-
4,499
258,618
17,151
2,200
99,816
103,651
132,680
2,554
358,052
616,670
120,864
31,575
3,764
24,411
5,736
15,349
201,699
130,201
90,090
6,714
5,280
1,211
233,496
435,195
181,475
148,878
1,807
30,790
181,475
105,718
97,839
43,829
3,435
1,762
1,703
254,286
15,233
2,127
99,875
93,539
129,282
-
340,056
594,342
89,046
27,157
2,791
18,850
3,289
8,485
149,618
167,044
89,857
6,568
4,660
854
268,983
418,601
175,741
149,066
(185)
26,860
175,741
IVE Group Limited 35. Discontinued operation
On 30 October 2020, the Group sold its Tele-fundraising business (Pareto Phone Pty Ltd).
(i) Results of discontinued operation
In thousands of AUD
Revenue
Cost of sales
Gross profit
Production expenses
Administrative expenses
Results from operating activities
Finance income
Net gain on sale of discontinued operation
Profit before tax
Income tax expense
Profit from discontinued operations
2022
-
-
-
-
-
-
-
-
-
2021
4,695
(109)
4,586
(1,649)
(2,033)
904
-
4,177
5,081
(276)
4,805
The profit from the discontinued operation during 2021 of $4,805 thousand was attributable entirely to the
owners of the Company.
(ii) Cash flows from discontinued operation
In thousands of AUD
Net cash from operating activities
Net cash from investing activities
2022
-
-
2021
628
15,165
117
Annual Report 2022 Notes to the consolidated financial statements – continued
35. Discontinued operation (continued)
(iii) Net gain on sale of discontinued operation (Tele-fundraising)
In thousands of AUD
Consideration received
Initial cash received
Completion adjustment paid*
Assets and liabilities disposed
Cash
Receivables
Prepayment
Deferred tax assets
Other assets
Property, plant and equipment
Intangible asset
Trade creditors
Employee benefits
Provisions
Costs incurred
Gain on sale of sale of discontinued operation
Total
16,500
(250)
16,250
(467)
(1,134)
(102)
(70)
(98)
(213)
(10,949)
229
1,302
44
(11,454)
(619)
4,177
* The completion adjustment includes working capital and balance sheet date adjustments. These adjustments are made in the
ordinary course of a transaction to reflect the difference between normalised expectations around balance sheet items at the
time of signing and actual balances on transaction completion.
118
IVE Group Limited IVE Group Limited
Directors’ declaration
1
In the opinion of the directors of IVE Group Limited (the Company):
(a) the consolidated financial statements and notes, set out on pages 72 to 118, are in accordance with
the Corporations Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its
performance for the financial year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
2
There are reasonable grounds to believe that the Company and the group entities identified in Note 28 will
be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the
Deed of Cross Guarantee between the Company and those group entities (refer Note 32) pursuant to ASIC
Corporations (Wholly owned Companies) Instrument 2016/785.
3
The directors draw attention to Note 2 to the consolidated financial statements, which includes a
statement of compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of directors.
Geoff Selig
Director
Dated at Sydney this 25th day of August 2022
119
Annual Report 2022 Independent Auditor’s Report
To the shareholders of IVE Group Limited
Report on the audit of the Financial Report
Opinion
IVE Group Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance
with the Corporations Act 2001, including:
•
•
giving a true and fair view of the
Group’s financial position as at 30
June 2022 and of its financial
performance for the year ended on
that date; and
complying with Australian Accounting
We have audited the Financial Report of
The Financial Report comprises:
• Consolidated statement of financial position as at 30
June 2022;
• Consolidated statement of profit or loss and other
comprehensive income, Consolidated statement of
changes in equity, and Consolidated statement of
cash flows for the year then ended;
• Notes including a summary of significant accounting
policies
• Directors’ Declaration.
the financial year.
Standards and the Corporations
The Group consists of the Company and the entities it
Regulations 2001.
controlled at the year-end or from time to time during
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with these requirements.
120
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
IVE Group Limited Independent Auditor’s Report
To the shareholders of IVE Group Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
IVE Group Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance
with the Corporations Act 2001, including:
•
•
giving a true and fair view of the
Group’s financial position as at 30
June 2022 and of its financial
performance for the year ended on
that date; and
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
Basis for opinion
The Financial Report comprises:
• Consolidated statement of financial position as at 30
June 2022;
• Consolidated statement of profit or loss and other
comprehensive income, Consolidated statement of
changes in equity, and Consolidated statement of
cash flows for the year then ended;
• Notes including a summary of significant accounting
policies
• Directors’ Declaration.
The Group consists of the Company and the entities it
controlled at the year-end or from time to time during
the financial year.
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with these requirements.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
121
Annual Report 2022 Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most significance in
our audit of the Financial Report of the current period.
This matter was addressed in the context of our audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on this matter.
Assessment of carrying value of goodwill
Refer to Note 15 to the Financial Report (Goodwill: $107m)
The key audit matter
How the matter was addressed in our audit
A key audit matter for us was the Group’s
annual testing of goodwill for impairment, given
the size of the balance (being 17% of total
assets) and the higher estimation uncertainty
driven by current economic conditions. Certain
conditions impacting the Group increased the
judgement applied by us when evaluating the
evidence available. We focussed on the
significant forward-looking assumptions the
Group applied in its value in use models,
including:
Our procedures included:
• We considered the Group’s determination of
its CGUs based on our understanding of the
Group’s business, and how independent cash
inflows were generated against the
requirements of the accounting standards;
• We analysed the Group’s internal reporting to
assess their monitoring and management of
activities, and the consistency of the allocation
of goodwill to CGUs;
• Assessment of the Cash Generating Units
• We considered the appropriateness and
•
(CGUs). The Group had several operating
businesses and product lines, as well as
acquisitions during the year, necessitating
our consideration of the Group’s
determination of CGUs, based on the
smallest group of assets that generate
largely independent cash inflows;
Forecast operating cash flows, capital
expenditure, growth rates and terminal
growth rates – the Group has experienced
continuing competitive market conditions
due to technological change and digital
disruption in the printing industry. These
conditions increase the possibility of
goodwill being impaired, plus the risk of
inaccurate forecasts or a significantly wider
range of possible outcomes for us to
consider;
• Discount rates – these are complicated in
nature and vary according to the conditions
and environment the specific CGU is
subject to from time to time.
The Group uses complex models to perform its
annual testing of goodwill for impairment. The
application of the value in use method applied
by the Group to perform the annual test of
goodwill for impairment against the
requirements of the accounting standards;
• We assessed the integrity of the value in use
models used, including the accuracy of the
underlying calculation formulas;
• We compared the Group’s cash flow forecasts,
including capital expenditure, contained in the
value in use models to the Board approved
budget and strategy;
• We assessed the accuracy of previous Group
forecasts to inform our evaluation of forecasts
incorporated in the models. We noted previous
trends of competitive market conditions and
how they impacted the business;
• We assessed the Group’s underlying
methodology and documentation for the
allocation of corporate costs to the forecast
cash flows contained in the value in use
models, for consistency with our
understanding of the business and the criteria
in the accounting standards;
122
IVE Group Limited models are largely manually developed, use
adjusted historical performance, and a range of
internal and external sources as inputs to the
assumptions. The Group has not always met
prior forecasts, raising our concern for reliability
of current forecasts. Complex modelling,
particularly those containing judgemental
allocation of corporate assets and costs to
CGUs, using forward-looking assumptions
tends to be prone to greater risk for potential
bias, error and inconsistent application. These
conditions necessitate additional scrutiny by us,
in particular to address the objectivity of
sources used for assumptions, and their
consistent application.
Given the nature of these judgements, we
involved our valuation specialists and senior
staff with experience in the industry and the
Group’s business in assessing this key audit
matter.
• We considered the sensitivity of the models by
varying key assumptions, such as forecast
operating cash flows, forecast growth rates,
terminal growth rates and discount rates,
within a reasonably possible range. We
considered the interdependencies of key
assumptions when performing the sensitivity
analysis and what the Group considers to be
reasonably possible. We did this to identify
those CGUs at higher risk of impairment and
those assumptions at higher risk of bias or
inconsistency in application and to focus our
further procedures;
• We challenged the Group’s significant forecast
cash flow and growth assumptions in light of
the expected continuation of inflationary
pressures in the economy in addition to
continued competitive market conditions and
digital disruption. We applied increased
scepticism to forecasts in the areas where
previous forecasts were not achieved. We
compared forecast growth rates and terminal
growth rates to authoritative published studies
of industry trends and expectations and
considered differences for the Group’s
operations. We used our knowledge of the
Group, business and customers, and our
industry experience;
• Working with our valuation specialists we
checked the consistency of the growth rates to
the Group’s revised plans and our experience
regarding the feasibility of these in the printing
industry and economic environment in which it
operates;
• We assessed the impact of technology and
market changes on the Group’s key
assumptions, specifically the continued market
for catalogues and other printed materials as a
marketing and communications tool, for
indicators of bias and inconsistent application,
using our industry knowledge and information
published by reputable sources;
• Working with our valuation specialists we
independently developed a discount rate range
considered comparable using publicly available
market data for comparable entities, adjusted
by risk factors specific to the Group and the
industry it operates in; and
• We assessed the disclosures in the financial
report using our understanding obtained from
123
Annual Report 2022 our testing and against the requirements of the
accounting standards.
Other Information
Other Information is financial and non-financial information in IVE Group Limited’s annual reporting
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are
responsible for the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Operating and
Financial Review, Director’s Report and Remuneration Report. The Financial performance, Business
highlights, Board of Director’s, Year in Review, Chair’s review report and CEO review report are
expected to be made available to us after the date of the Auditor's Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
and will not express an audit opinion or any form of assurance conclusion thereon, with the exception
of the Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we consider whether the Other Information is materially inconsistent with
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001
•
•
implementing necessary internal control to enable the preparation of a Financial Report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
error; and
assessing the Group and Company’s ability to continue as a going concern and whether the
use of the going concern basis of accounting is appropriate. This includes disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting
unless they either intend to liquidate the Group and Company or to cease operations, or have
no realistic alternative but to do so.
124
IVE Group Limited Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf.This description forms part of our
Auditor’s Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report
of IVE Group Limited for the year ended
30 June 2022, complies with Section
300A of the Corporations Act 2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration
Report in accordance with Section 300A of the
Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in
pages 52 to 68 of the Directors’ report for the year
ended 30 June 2022.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
Daniel Camilleri
Partner
Sydney
25 August 2022
125
Annual Report 2022 ASX additional information
Additional information required by the Australian Securities Exchange (ASX) and not disclosed elsewhere
in the Annual Report is set out below. The shareholder information below is correct as at 26 July 2022.
IVE Group Limited shares are traded on the ASX under the code ‘IGL’.
Share registry
Registered office
Link Market Services
Level 12, 680 George Street
Sydney NSW 2000
Phone: +61 1300 554 474
Level 3, 35 Clarence Street
Sydney NSW 2000
Phone: +61 2 8020 4400
Principal Place of Business
Building B,
350-374 Parramatta Road
Homebush NSW 2140
Phone: +61 2 8020 4400
Substantial shareholders of ordinary shares (as reported to the ASX)
Name
Caxton Print Holdings Pty Ltd as trustee for the
Selig Family Trust
Anthony Young
Ryan Young
Number of
Shares Held
11,210,231
10,216,605
10,118,488
%
7.81
7.12
7.05
Date of notice
to ASX
5 September
2017
27 May 2022
6 June 2022
Distribution of shareholders and shareholdings – ordinary shares
There are 143,508,948 ordinary shares on issue held by 3,726 shareholders.
Range
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
Ordinary
Shares
315,372
3,303,280
5,137,042
35,861,598
98,891,656
%
0.22
2.30
3.58
24.99
68.91
143,508,948
100.00
No. of
holders
587
1,165
643
1,193
138
3,726
%
15.75
31.27
17.26
32.02
3.70
100.00
Distribution of performance right holders and holdings – performance share rights (unlisted)
There are 3,555,195 unlisted performance share rights on issue that have been issued under an employee share
plan. These are held by 7 employees.
Range
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
126
Performance
Share Rights
-
-
-
-
%
-
-
-
-
3,555,195
3,555,195
100.00
100.00
No. of
holders
-
-
-
-
7
7
%
-
-
-
-
100.00
100.00
IVE Group Limited Unmarketable parcels
The number of shareholders holding less than a marketable parcel of ordinary shares is 108 for 3,242 shares,
based on IVE’s closing share price of $1.49, on 26 July 2022.
Twenty largest shareholders
Rank Name
1
2
3
4
5
6
7
8
9
9
10
11
12
13
14
15
16
17
18
19
20
CAXTON PRINT HOLDINGS PTY LTD (GROUPED HOLDINGS)
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
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