IVE Group Limited
Annual Report 2023
idea
execution
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 Services, Data-Driven
Communications, e-Commerce, Brand Activations,
Premiums & Apparel, Packaging, Print, Integrated
Logistics and Household 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.
ASX : IGL
IVE Group’s 2023 AGM will be held on
Monday, 20 November 2023 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
Contents
Financial performance
Highlights of the year
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
Year in review
Business updates
Strategic initiatives
Review of financial performance
Environmental, social and corporate governance (ESG)
Directors’ report
Remuneration report
Financial report
Consolidated financial statements
Notes to the consolidated financial statements
Directors’ declaration
Independent auditor’s report
ASX additional information
By forever seeking new ways to simplify,
integrate, and amplify their marketing
activity, we take our clients, their
businesses and their customers, further.
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122
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Financial
performance
REVENUE
EBITDA
$967.4m
↑27.5% on PCP
$119.0m
↑23.1% on PCP
NPAT
EPS
$39.7m
↑19.8% on PCP
26.4c
↑14.5% on PCP
MATERIAL PROFIT
MARGIN
OPERATING CASH
FLOW TO EBITDA
45.1%
46.6% PCP
65.7%
94.9% PCP
NET DEBT
$124.2m
CASH ON HAND
$44.9m
FULLY FRANKED
FINAL DIVIDEND
8.5c
PER SHARE
↑6.3% on PCP
The underlying financial results are on a non-IFRS basis, exclude various
non-operating items (refer Appendix A) and are not audited or reviewed
4 | IVE Group Limited Annual Report 2023
Highlights
of the year
“ As I reflect on the extraordinary year we have just been through, and this coinciding
with our centenary as a business, it has reaffirmed my optimism that as we emerge
from the pandemic, the solid fundamentals of the business place IVE in a position of
strength from which to continue growing and evolving over the years ahead.”
Executive Chairman, Geoff Selig
2021 Annual Report
Strong operating performance
> A record year for revenue, EBITDA and NPAT
– the second year of solid growth post the
unprecedented volatility of COVID-19
> Material gross profit margin (MGM) decreased
over PCP. Excluding new Ovato revenues for the
period, the Groups MGM remains stable
FY22 over FY21
— Revenue up 15.6%
— EBITDA up 13.3%
— NPAT up 66.1%
— Earnings per share (EPS) up 71.1%
FY23 over FY22
— Revenue up 27.5%
— EBITDA up 23.1%
— NPAT up 19.8%
— EPS up 14.5%
> Organic revenue growth (excluding the impact
of acquisitions) of 6.2% reflects strong new
business momentum, continued high levels of
client retention, and ongoing cross-selling
> Operating cash flow to EBITDA impacted by
(largely Ovato-related) uplift in working capital
(including tactical build of paper inventories) to
support significantly more revenue
> While gearing remains below targeted
levels, net debt increased due to the uplift in
working capital and funding of the majority of
Ovato-related integration costs
> Fully franked full year dividend of 18.0 cents per
share, consistent with the Company’s dividend
policy which targets a full year payout ratio of
65-75% of underlying NPAT
> Return on funds employed (ROFE) increased to
24.7% from 21.3% PCP
> Return on equity (ROE) increased to 21.1% from
18.5% PCP
5
Highlights of the year
Business updates
> Finalised and implemented a robust and
comprehensive ESG strategy
> Ovato acquisition
— On 13 September 2022, following ACCC
clearance, the Group acquired substantially
all of the printing and finishing assets of
Ovato, IVE’s primary print competitor
— The complex integration of Ovato assets and
revenue transfer into IVE’s existing operations
has progressed very well, with no adverse
client impacts. The integration will now be
complete by March 2024, 3 months ahead
of schedule
— The acquisition is highly earnings accretive.
Once the integration is completed in early
2024, we expect to deliver an additional
$145m of revenue, $25m of EBITDA, and
$13m of NPAT
> The Company successfully completed a $19.3m
capital raise (8.58m shares at $2.25 per share)
in October 2022
> Following the successful launch of Lasoo
in October 2022, our e-Commerce market
place is currently delivering consecutive
month-on-month growth across all key metrics
Key initiatives
> Investing in an expanded content creation
strategy
> Leveraging our growing apparel capability
to further amplify and expand our corporate
uniforms business
> Finalised strategy and increased our focus on
entry into the fragmented short-to-medium
run folding cartons segment of the Australian
packaging industry
6 | IVE Group Limited Annual Report 2023
7
Chair’s review
Reflecting on the Company’s performance and
resilience through the COVID-19 pandemic,
I wrote in our 2021 annual report: “As I reflect
on the extraordinary year we have just been
through, and this coinciding with our centenary
as a business, it has reaffirmed my optimism
that as we emerge from the pandemic, the solid
fundamentals of the business place IVE in a
position of strength from which to continue
growing and evolving over the years ahead.”
In that context, the Board is delighted with the
Group’s performance over the last 12 months,
a record year that saw the Group deliver its
second year of solid uplift in both revenue and
earnings post the pandemic. The result is even
more pleasing given trading conditions over the
period were not without challenge, with margins
pressured by input price inflation, coupled with
materially higher energy and finance costs.
Strong organic growth combined with the Ovato
acquisition drove a 27% uplift in revenue to
$967m, and a 20% uplift in underlying NPAT to
$39.7m from $33.1m in the prior year. Return on
funds employed increased to 24.7% from 21.3%
the prior year.
On 13 September 2022, following ACCC
clearance, the Group completed the highly
accretive and strategically important acquisition
of substantially all of the printing and finishing
assets of Ovato, IVE’s primary print competitor.
Once the integration is complete early next
year, the acquisition is expected to deliver an
additional $145m of revenue, $25m of EBITDA,
and $13m of NPAT.
So as to reduce operational risk and accelerate
synergy emergence, we decided to expedite the
Ovato integration, with the integration now
on track to be complete by March 2024, three
months ahead of schedule. It is important to note
that the full integration synergies will not be
realised until the end of FY24 when significant
Ovato Sydney site costs (primarily related to
lease expiry) are exited and final production
efficiencies captured.
To preserve balance sheet strength and to
support capacity to fund future growth initiatives
post the Ovato acquisition, the Company
successfully completed a $19.3m capital raising
8 | IVE Group Limited Annual Report 2023
(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 IVE shares.
Allowing for the aforementioned modest capital
raising, earnings per share (eps) increased 15% to
26.4 cents per share (cps), supporting a full year
dividend of 18.0 cps fully franked. The current
year payout ratio of 69% is consistent with the
Company’s dividend policy which targets a full
year payout ratio of 65%-75% of underlying
NPAT. Since listing on the ASX in December 2015,
and inclusive of the recently declared 8.5 cps final
dividend, the Company has paid $1.03 per share
in fully franked dividends, representing a total
payout of $143m (70% average payout ratio
and 7.9% yield since listing), consistent with the
profitability and cash generative nature of the
business. These metrics exclude FY20 when the
Company prudently elected not to pay a dividend
during the Covid-19 pandemic.
The Company remains well capitalised and
highly liquid. Our balance sheet is strong, with net
debt of $124m at 30 June 2023, up from $76.8m
a year earlier, equating to 1.0x EBITDA (1.4x pre
AASB 16) and below our stated target of 1.5x pre
AASB 16. The Group’s net debt position increased
over the year primarily as a result of the Ovato
transaction and associated integration costs,
and the need to hold additional inventories given
the residual effects of supply chain issues over
the last 2 years. We expect inventory levels to
normalise over the second half of calendar 2024.
Over the last 18 months the Group has invested
nearly $6m to transform Lasoo from what was
a static digital catalogue site, to a leading
e-commerce market place for specials. The ‘new’
Lasoo platform was successfully launched in
October 2022, and continues to show strong
consecutive month-on-month growth across
all relevant metrics. Whilst we expect Lasoo to
remain loss making in the near term, the business
is currently performing in-line with, or marginally
ahead of, our business case. We intend providing
a comprehensive update on the Lasoo business in
the first half of calendar 2024.
During the year, we undertook a strategic review
of the Group’s creative services and content
production capability, reflecting a view that
this part of the business is under-represented
(and the Group’s extensive client base under-
penetrated) relative to the dominant market
positions across the rest of the Group’s marketing
and communication verticals. The broader
content creation offering will expand customer
relationships, open additional markets, generate
new revenue streams, and further expand our
existing capabilities.
So as to better manage increasingly volatile
energy (electricity and gas) costs and consistent
with stakeholder expectations for the business to
transition to 100% renewable energy, the Group
executed a 7-year partnership agreement in April
2023 with Iberdrola, one of the world’s largest
renewable energy companies. From January 2024,
IVE’s electricity requirements will be generated
from a renewable source (primarily wind), creating
a clear pathway to 100% renewable supply.
Associated large-scale (renewable energy)
generation certificates (LGC’s) will likely be sold in
the near term to subsidise IVE’s electricity costs.
With respect to environmental social governance
(ESG) more broadly, last year we undertook
a detailed assessment in conjunction with an
external specialist to define the scope of our
ESG roadmap and inform the development of a
robust and transparent sustainability framework.
We recently finalised the ESG action plan and
reporting regime, and I invite shareholders
and prospective investors to refer to the Group’s
ESG framework and 2025 targets covered in
this report.
Thank you to our Group CEO Matt Aitken for
his outstanding leadership, Executive Director
Paul Selig and CFO Darren Dunkley for their
very meaningful contribution, our highly skilled
leadership team for their ongoing commitment,
and to all of our dedicated staff for their efforts
once again over the last year. Thank you to my
fellow directors for your continued contribution,
expertise and support.
In addition to continued optimisation of the
Group’s operating assets, the business remains
committed to its previously articulated
diversification and growth strategy. The Company
has ‘bounced back’ strongly from the COVID-19
pandemic with a strengthened market position, is
‘match fit’, has a solid balance sheet, and a team
focused on delivering across a range of exciting
initiatives over the year ahead to further drive the
ongoing strength and sustainability of IVE.
Geoff Selig
Executive Chairman
9
CEO’s review
The Group delivered another strong performance
in FY23 with key financial metrics showing
meaningful improvement over the prior year.
facilitate a reduction in working capital (and a
consequential recovery in cash conversion to more
normal levels) in calendar 2024.
All divisions contributed positively to the result,
demonstrating the value of IVE’s diversified
and vertically integrated, holistic offering.
We successfully completed the Victorian site
consolidation, launched our exciting new
e-Commerce marketplace Lasoo, acquired major
competitor Ovato and finalised a comprehensive
and ambitious sustainability strategy.
Revenue increased 27.5% to $967.4m from $759m
in the prior year, supplemented by the acquisitions
of Ovato and Active Display Group and AFI
Branding Solutions. Excluding acquisitions,
organic revenue growth was still impressive at
6.2% reflecting strong new business momentum,
continued high levels of client retention and
ongoing cross-selling.
Consistent with the return to in-store shopping
following the shift to on-line sales during
the pandemic, our industry-leading Brand
Activations business continues to benefit from
retailers directing additional marketing spend to
consumers’ in-store shopping experience. While
consumer discretionary spending tightened during
the final quarter of FY23, the Company has not
experienced any adverse impact on the marketing
spend of the Group’s diverse, tier-1 customer base
over the last six months.
EBITDA increased 23.1% to $119.0m from $96.6m
in the prior year while NPAT increased 19.8% to
$39.7m from $33.1m in the prior year. The strong
uplift in both metrics reflects the aforementioned
revenue growth, partially offset by increased input
costs, including a material increase in energy
costs. Pleasingly, input price pressure is starting to
abate with paper and international freight costs
having reduced in recent months, and the recently
signed agreement with Iberdrola will improve
electricity costs during calendar 2024.
Conversion of EBITDA to operating cash was
lower than previous years at 65.7% compared
with 94.9% in the prior year, due to a significant
increase in working capital primarily reflecting
a targeted increase in inventory associated with
the Ovato transaction. Improved supply chain
stability coupled with lower paper prices should
10 | IVE Group Limited Annual Report 2023
Business updates
Environmental, social and corporate governance
(ESG) strategy
During the year, IVE finalised and implemented
a robust and comprehensive ESG strategy.
This followed extensive internal and external
stakeholder interviews and an assessment of
the Group’s carbon footprint and supply chain
social risk to determine the material issues most
relevant to our business.
The Group’s ESG strategy and targets for 2025
and beyond are outlined in detail on pages
39-41 and I look forward to reporting on our
performance against these targets moving
forward.
Ovato acquisition and integration
On 13 September 2022, IVE acquired selected
assets of Ovato, the Group’s primary catalogue
and magazine print competitor.
The integration is generating meaningful
synergies from leveraging the Group’s assets
and cost base, with Ovato contributing around
$4m to net profit after tax in 2023. During the
year, equipment from Ovato sites in Brisbane
and Melbourne was either relocated or sold,
and both Perth sites were closed. Ovato’s
largest site at Warwick Farm in Sydney is the
only remaining operating site, and this will also
close upon integration of key production assets
into the Group’s existing New South Wales and
Victorian sites.
Lasoo ‑ performing strongly after successful launch
Lasoo is IVE’s market leading e-Commerce
platform for specials that allows consumers to
shop specials from multiple retailers via a single
checkout experience.
Following its successful launch in October 2022,
Lasoo continues to show strong month-on-month
growth across key operating metrics including
gross transaction value, unique monthly users,
conversion rate, average basket size, and
commission rates compare – with all metrics
performing in-line or better than our business case.
Strategic initiatives
Expansion of Content Creation offering
The media landscape continues to fragment
and the proliferation of marketing channels has
significantly increased the type, volume and
frequency of content that needs to be produced
to ensure effective omni-channel marketing. This
development represents a further opportunity
to support customers and leverage the Group’s
unique ‘Idea to Execution’ market position
and we intend to develop a deeper and more
comprehensive go-to-market content offering over
the next 24 months.
Apparel and uniforms
The Group’s Premiums & Merchandising business
has been sourcing apparel for customers for the
last eight years. Corporate uniforms is a natural
and growing product adjacency with the market
size estimated at $1.2 billion and growing around
5.3% CAGR, underpinned by general wear and
tear as well as often higher staff turnover in
uniformed roles.
Beyond current major uniform clients including
Certis (Airport and Trains security), Surf Lifesaving
NSW, Transport NSW, and Reece, the Group has a
strong pipeline of opportunities including several
promising RFPs/trials in progress.
Packaging
In recent years, IVE has been investigating certain
segments of the Australian packaging sector. IVE
considers this sector as being complementary to
the Group’s existing product and service offering,
and consistent with its long term strategy to
continue the diversification of the business into
aligned adjacencies. The fragmented structure
of the sector also provides an opportunity for IVE
to play a leading role in further consolidation,
similar to the strategy we have successfully
deployed across a number of other adjacencies
over the last decade.
Due to similarities with many of the Group’s
existing production processes and equipment,
as well as its aligned ESG credentials, the Group
identified the higher margin, short to medium run
length fibre-based folding carton segment to be
the most attractive. The $800m folding cartons
market makes up a core component of the
preferred packaging format for large food and
beverage customers, with this segment growing
around 10% over the last year.
With the Ovato integration progressing ahead
of schedule, the Group has resumed its focus
on entering the packaging sector via acquisition
in FY24.
IVE is Australia’s largest integrated marketing
communications business, holding leading market
positions in all of the sectors in which we operate.
Strong cash generation and a conservative
balance sheet sees us well placed to continue
to invest in a range of organic initiatives (such
as Lasoo, content creation and apparel and
uniforms) as well as acquisitions, including
opportunistic scale enhancing ‘bolt-ons’ or more
strategic opportunities.
Thank you to our Executive Chairman, Geoff Selig
and the Board for their insights and ongoing
support. I am also greatly appreciative and proud
of the commitment and contribution of our 2,000
staff in achieving such outstanding results. The
Group remains in a strong position to deliver on its
financial, operational and strategic initiatives.
Matt Aitken
Chief Executive Officer
11
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
12 | IVE Group Limited Annual Report 2023
Our clients’ evolving needs have helped
shape the diversified, scaled and integrated
service offering we provide today.
13
Operating and
financial review
14 | IVE Group Limited Annual Report 2023
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 and our shareholders.
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 interaction of our brand values
that are the guiding principles of our behaviour – core to this is our ‘one company philosophy’.
Accountable
Smart
We have a responsibility to our clients, our
shareholders and our staff to be honest,
upfront and accountable. Every moment
matters, so we’re always on point
and ready to deliver reliable, effective
marketing solutions.
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.
Passionate
Collaborative
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.
As specialists, we collaborate and deliver
holistic customer-focused solutions for our
clients. Drawing on our combined skills,
we partner with our clients in a flexible
manner to deliver exceptional outcomes.
15
Operating and financial review
Our integrated
service offering
With an unmatched breadth and depth
of offering, we guide our clients from idea
to execution.
Specialising in Creative Services,
Data-Driven Communications, e-Commerce,
Brand Activations, Premiums & Apparel,
Packaging, Print, Integrated Logistics
and Household 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.
16 | IVE Group Limited Annual Report 2023
Our clients
IVE has a high-quality customer base with ~3,000 customers spanning 26 industry sectors
and includes many leading Australian and multi-national companies.
AGL
ALDI
Amex
AMP
Anaconda
Angus & Coote
ANZ
API
Are Media
Australian Liquor Marketers
Australian Unity
Australia Post
Baby Bunting
Barbeques Galore
BCF
Blackmores
BlueScope
BP Australia
BT Financial
Bunnings
Bupa
Cancer Council
Carnival Australia
Chemist Warehouse
Clark Rubber
Cleanaway
Coles
Colgate Palmolive
Colonial
DIAGEO
Duracell
Commonwealth Bank
Crown Group
Direct Chemist Outlet
Domain Holdings
Endeavour Group
Energy Australia
Fairfax Media
Foodland
Foxtel
GlaxoSmithKline
Goldmark
Greencross
HarperCollins
Harris Scarfe
Hungry Jack’s
IAG/CGU
iCare
IOOF
Jaycar
JB Hi-Fi
Keno
Kmart
Lego
L’Oréal
Luxottica
McDonald’s
Metcash
Microsoft
Myer
NIB
NAB
NBN Co
Nestlé
News Life
Nissan
NRMA
NSW Electoral Commission
Officeworks
Optus
Pandora
Pan Macmillan
Priceline
Prouds
R.M.Williams
RACQ
RACV
Repco
ResMed
Revlon
Sigma Healthcare
Specsavers
Sportsgirl
Spotlight
STIHL
Stratco
Subaru
Supercheap Auto
Sussan
Tabcorp
Target
Telstra
Toyota
Transurban
UniSuper
Westpac
Victoria Electoral Commission
Vodafone
Woolworths
World Vision
Zurich
17
Operating and financial review
Strategy
and growth
Earnings diversification and
resilience
To improve revenue diversification and strengthen
earnings resilience, IVE began broadening its
product and service offering in the late 1990s,
through a combination of organic growth
initiatives and a disciplined acquisition program.
Core to executing the Group’s strategy was IVE’s
decision to list on the ASX in December 2015.
Since listing, strong free cash flow combined with
access to capital has enabled IVE to successfully
execute a transformational investment and
growth program to further expand and strengthen
our integrated marketing offer and enhance and
deepen long-term client relationships.
Over the past decade, IVE’s continued growth and
diversification, coupled with the convergence of
technologies on the back of the digital revolution,
has coincided with meaningful consolidation
across the more traditional segments of the
marketing and communications sector. This has
resulted in a more concentrated competitive
landscape than ever before with a significantly
reduced number of competitors. IVE has led
sector innovation and consolidation and today is
Australia’s largest and most diversified integrated
marketing communications company by a
considerable margin.
Integral to the ongoing sustainability of the
business is the compelling and diverse value
proposition IVE takes to market which has always
remained relevant by being closely aligned to our
clients’ ever evolving marketing communications
needs. Marketing strategies are increasingly
omni-channel: IVE’s diverse offering spanning
all digital mediums through to traditional print,
brand activations, premiums and apparel,
and fulfilment and logistics, allows IVE to be
channel and platform agnostic to deliver the
best client solutions.
The diversity of the Group’s value proposition
places IVE in a strong position relative to our
competitors. IVE has an unparalleled breadth of
offering with market leading positions across the
key segments of the marketing communications
value chain in which we operate.
A clearly defined and well executed long-term
strategy has not only cemented IVE as Australia’s
largest integrated marketing communications
business, it has resulted in a resilient business with
diversified revenue streams spanning a broad
range of sectors and underpinned by an extensive
and tier-1 client base. IVE’s earnings resilience
and strong balance sheet has supported a
consistently high dividend yield and funding for
ongoing growth and diversification initiatives.
18 | IVE Group Limited Annual Report 2023
Customer origination and retention
IVE’s customer origination and retention strategy
is founded upon a:
> Highly customer centric culture;
> Sales focused corporate structure and
executive team;
> Broad range of products and services providing
a sound base for increasing ‘share of wallet’ of
existing customers; and
> Expansion of the value proposition (through
the addition of new products and services)
to ensure the offering remains relevant to
customers’ ever evolving communication needs.
The customer base is highly diversified with the
largest customer representing 8% of total revenue
and the top 20 customers accounting for 38% of
total revenue.
IVE adopts a structured, disciplined, solutions-
based strategy with customers, which enables
the bundling of various products and services to
deliver a tailored customer outcome, improving
the customers’ return on total supply chain
or ‘ownership’ cost. This approach has led
to deep, long-term relationships with customers
and provides an opportunity to further expand
the range of products and services offered
to customers.
Around 76% of IVE’s customers purchase more
than one Group product and/or service, and our
ability to meet customers’ current and evolving
needs is one of our key advantages leading
to the long tenure of customer relationships –
currently around 10.5 years on average for our
Top 20 customers.
IVE’s top 20 customers (comprising around 38%
of FY23 revenue) have contractual arrangements
in place. Contract terms generally range from
1–5 years with the average at around 3 years.
Moreover, approximately 78% of revenue was
generated from customers with contractual
arrangements in place or from customers with
whom IVE has an established (greater than two
years) relationship.
Major corporations are increasingly focused
on reducing supply chain ‘counter party’ risk
(financial, operational and ESG) and improving
supply chain efficiency (eliminating hand-offs,
additional administration and reducing supply
chain lead times) by seeking a fewer number of
financially secure, well credentialed full-service
suppliers. IVE’s broad product and service offering
(across which it holds leading market positions),
strong financial position and sound ESG
credentials aligns with those objectives.
Revenue concentration by customer*
Customer product penetration*
Other
customers
62%
Top
customer
8%
Top 2–5
customers
13%
Top 6–20
customers
17%
* Based on FY23 revenues.
1 product/
service
24%
2 products/
services
21%
3 products/
services
14%
4 products/
services
7%
5 or more
products/
services
34%
19
Operating and financial review
Market position
Leading market positions across a diverse range of sectors
Marketing (but especially printing) industry
structure has improved materially over the
past decade as a result of significant industry
consolidation, much of which has been driven
by IVE.
IVE now holds leading market positions in
most sectors in which we operate including
direct marketing mail (#1), letterbox distribution
(#1), general commercial printing (#1), web
offset printing (#1), brand activations (#1),
premiums & merchandising (#1) and integrated
marketing (Top 3).
IVE’s diverse and powerful value proposition,
broad geographical footprint, financial strength
and ESG credentials contribute to the Group’s
attractive and trusted counterparty status.
IVE’s full-service offering enables customers to
consolidate multiple supply chains, thereby
improving efficiency and reducing risk.
The Company enjoys a nice revenue mix,
operating across a broad range of sectors.
Relationship tenure of top 20 customers1
Revenue sector analysis1
Top 20 customers by revenue
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20
< Average relationship
tenure of top 20
customers
Retail
White goods, electronics,
furniture, clothing
Supermarkets
Health / personal products
Food / beverage
Financial / Corporate Services
Publishing
Media
Government
Health
Tourism / Entertainment
Manufacturing
Trade
Other2
Total
%
46.6
24.1
10.8
9.9
1.8
10.3
5.7
4.6
3.4
3.2
2.7
2.2
2.2
19.1
100.0
1
2 3 4 5 6 7 8 9 10 11
12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Years of tenure
1. Based on 1H FY23 revenues.
2. Other includes agency, telecommunications,
charity/not-for-profit, service, food, advertising
agency, education, broker, associations,
automotive, transport, utilities, IT, property,
building/construction, legal.
20 | IVE Group Limited Annual Report 2023
21
Year in
review
22 | IVE Group Limited Annual Report 2023
Business
updates
Lasoo – performing strongly after
successful launch
Leading e-Commerce marketplace for specials
Following its successful launch in October 2022,
the new Lasoo platform continues to show strong
consecutive month-on-month growth across all
relevant metrics.
Key financial metrics (monitored daily) including
unique monthly users, conversion rate, average
basket size, gross transaction value (GTV)
and commission rates are tracking broadly in
accordance with or above expectations. We have
been encouraged by high sales volumes in (higher
product value) categories such as furniture,
appliances, electrical and sports and outdoor.
Activity levels remain strong with more than 126
fully integrated retailers on the platform (well
ahead of expectations and compared with only
28 live prior to launch) underpinning a broad and
deep product/category offering.
Illustrating Lasoo’s growing consumer support,
a number of significant retailers unique to Lasoo
joined the platform during 2H FY23 including
Lincraft, Barbeques Galore and Direct Chemist
Outlet. The pipeline for new retailer integration
remains strong with several high-profile retailers
across multiple product categories set to
commence trading on the platform in 1H FY24.
Independent feedback on user experience received
via Testmate1 is encouraging – Lasoo’s site
usability score (SUS) of 94 (website) and 85 (App)
compares favourably with an average score of
67 for mature e-Commerce platforms. Moreover,
Lasoo currently has a Trustpilot2 score of 4.1 stars
which compares favourably to Catch (3.6 stars),
Amazon (1.8 stars) and eBay (1.2 stars). Primarily
reflecting the greatly expanded number of deals
on the platform, Lasoo’s net promoter score (NPS)
has improved to an ‘exceptional’ 53+ from a
‘strong’ 38+ in October 2022.
Consistent with guidance, Lasoo reported a FY23
after-tax loss of $4.0m (for 8 months of trading)
primarily reflecting costs associated with the
consumer go-to-market campaign (which was
amplified during 2H FY23 following promising early
platform momentum) and team buildout costs.
The Group is encouraged by the progress and
growth of Lasoo since its launch in late 2022 and
intends providing a comprehensive update on the
business later in FY24.
1. Testmate UX Research Agency.
2. Trustpilot – www.au.trustpilot.com.
Retailer onboarding momentum
Sales split by category
130
120
110
100
90
80
70
60
50
40
30
20
10
Furniture
Home &
garden
Aug ‘22
Sep ‘22
Dec ‘22
Mar ‘23
Jun ‘23
Electronics
On the platform
Integrating
Scheduled to integrate
Business case
Other
Hardware
Fashion
Jewellery
Alcohol
Pets
Toys
Health &
beauty
Sports &
outdoor
23
Year in review
Ovato acquisition
Overview
IVE completed the acquisition of selected assets
of Ovato, IVE’s primary print competitor, on
13 September 2022.
The integration of Ovato revenue into IVE’s
manufacturing footprint is generating meaningful
synergies from further leveraging the Group’s
operating assets and cost base, notwithstanding
significant remaining costs at Ovato’s Warwick
Farm site as we progressively ‘wind down’ and exit
that operation.
The acquisition is expected to deliver very
attractive financial metrics including revenue of
around $145m, EBITDA of around $25m and NPAT
of around $13m.
Due to the decision to expedite the final phase
of the integration, including exiting Ovato sites,
further net costs of $3.5m were incurred including
a $2.0m loss on disposal of assets (at scrap value)
and a $4.2m impairment of assets held for sale,
partly offset by $2.7m1 of refundable purchase
consideration.
Integration and associated capital expenditure
costs (excluding redundancies) are expected to
total around $27.6m comprising $17.6m expensed
in FY23 with a further $5.5m of restructuring
costs and $4.5m of capital expenditure
anticipated in FY24.
Integration and acquisition costs have been
and will continue to be treated as significant
items and excluded from underlying NPAT for
reporting purposes.
Ovato consideration, net assets acquired and
associated goodwill is summarised below:
Ovato acquisition summary
Consideration1
Fair value of assets acquired and
liabilities assumed
Inventories
Assets held for sale2
Fixed assets2
Employee liabilities2,3
Make good liabilities2
Net assets acquired
Goodwill on acquisition
$m
13.0
6.0
4.2
15.2
(13.9)
(1.1)
10.3
2.7
1. Per the Sale Agreement, part of the consideration may be
refunded depending on any surplus funds available from
Ovato’s administration.
2. Net of tax impact which is disclosed separately in the DTA/
(DTL) balance.
3. Includes redundancy provision disclosed separately in
provisions. See Note 21 of IVE Group Limited’s 2023 Annual
Financial Report.
Integration update
Soon after completing the acquisition, all major
customers were successfully transitioned across
to IVE with no significant client losses while
retained staff transitioned seamlessly across to
IVE and remain a valuable addition to the Group’s
expanded workforce.
Inventory (largely paper) levels were prudently
increased to ensure continuity of supply across
the expanded (post-Ovato) client base and to
ensure the Group remains well placed to capture
any subsequent growth opportunities.
24 | IVE Group Limited Annual Report 2023
The expanded business continues to perform
well, meeting all customer expectations, with
all core business functions integrated under one
leadership structure shortly after the acquisition
completed including sales, finance, estimating
and inventory management.
During the year, equipment from Ovato sites in
Brisbane and Melbourne was either relocated or
sold. A significant number of production assets
from Ovato’s largest site in Warwick Farm in
Sydney continue to be progressively integrated
into the Group’s Sunshine, Huntingwood and
Silverwater web offset printing sites.
In May 2023, both IVE and Ovato’s Perth sites
were closed.
Operationally, the sites have been working
closely to ensure optimal efficiency is maintained
daily across all production assets and the
business will continue to progressively realign its
operational cost base with the remaining revenue
and asset transfers to IVE sites.
Ovato’s estimated contribution to the Group
during the year is as follows:
> $136m of revenue;
> $11m of EBITDA; and
> $4m of NPAT.
As the integration with IVE’s existing operations is
now well progressed, the Company will be unable
to provide an ongoing estimate of the annual
earnings contribution from what were previously
Ovato revenues.
The integration of Ovato assets into IVE’s
production facilities is now expected to be
completed by March 2024, three months ahead of
the previously advised timetable.
The revised integration timetable will result
in reduced operational risk and accelerated
synergy emergence, however, the incremental
financial impact in FY24 will be modest with the
full integration synergies unable to be realised
until the end of FY24 when significant Warwick
Farm site costs (primarily related to the $4m
lease expiry) are exited and final production
efficiencies captured.
Key remaining integration milestones include:
> 1H FY24: final asset relocations have
commenced from Warwick farm into
Huntingwood and Silverwater to complete
integration;
> final phase of revenue transfer to IVE sites
completed by March 2024;
> remaining assets held for sale to be dismantled
and disposed for scrap value to execute site exit
plans; and
> exit and make good of Warwick Farm site
completed by March 2024, ahead of June 2024
as previously advised.
25
Year in review
Strategic
initiatives
Consistent with IVE’s long-term strategy to
continue evolving and diversifying the business,
management has been focused over the last 12
months on a number of key strategic initiatives
intended to further grow and diversify IVE’s
nearly $1bn revenue base.
The evolution of IVE’s Creative Services offering
continued as additional capabilities were
integrated into the Group’s studios to support the
growth of the Brand Activation business. IVE now
offers retail & shopper insights, creative strategy
and ideation and structural design expertise.
In parallel, the media landscape continues
to fragment and the proliferation of channels
driving commerce has significantly increased
the type, volume and frequency of content
that needs to be produced to ensure effective
omni-channel marketing. IVE recognise this is
a further opportunity to support our customers
and leverage the Group’s unique ‘Idea to
Execution’ market position, prompting a review
of our offering and the associated skillsets and
capabilities with a view to building a deeper and
more comprehensive go-to-market offering for
this division.
The review and redefining of the Group’s creative
services and content production capability
will result in the implementation of a strategy
that will:
> Expand the breadth and depth of IVE’s Creative
Services, content production and marketing
technology offering;
> Protect and leverage existing relationships by
introducing new and highly valued services and
solutions to existing clients;
> Enter new markets and develop profitable
revenue streams through bundling these new
capabilities and existing services to a broader
customer base; and
> Continue to advance IVE’s holistic offering
of data-driven, content rich, omni-channel
marketing services. The Group will execute on
this strategy over the next 24 months.
The Group’s previously advised ambition to
develop a meaningful presence in the packaging
sector is now firmly back on the agenda
having been temporarily delayed by the Ovato
transaction, while our resourcing of and ambition
in the apparel and uniform space has risen
following some early successes and encouraging
prospects. The Group has also committed to
expanding the breadth and depth of IVE’s content
creation service offering which is currently under-
represented (and the Group’s extensive client
base under-penetrated) relative to the dominant
market positions enjoyed by the rest of the
Group’s marketing and communication verticals.
Outlined hereafter are some of the Group’s key
strategic initiatives currently underway.
Expansion of content creation
offering
IVE’s Creative Services offering has evolved
considerably over the years, and today employs
a strong and talented team of over 80 designers
and artists. Our people are located across Sydney
and Melbourne (including staff embedded within
client sites), working across a range of industries
including banking and financial services, FMCG,
grocery, retail, property and luxury brands.
Traditionally, this business division was formed
to design and produce the marketing collateral
that IVE would then print, distribute and activate
in market.
In recent years, the Creative Services Team
expanded their focus to support the growth of the
Group’s Data-Driven Communications division
which, amongst many things, helps clients
convert data into insights thereby enabling the
creation of personalised marketing campaigns
that connect with their customers across multiple
online and offline touchpoints.
26 | IVE Group Limited Annual Report 2023
‘Idea to Execution’
Data & insights
Creative & content production
Omni-channel activation
Origination
Adaptation
Creative
Content
Production
Premium Quality
Process Optimisation
We leverage data and
analytical insights to
understand customer behaviour.
We translate these insights into action,
by developing creative strategies and
rich and engaging content.
We then execute and deliver the
right message to the right person in
the right channel at the right time.
Apparel and uniforms
Having developed a garment sourcing component
to IVE’s Premiums & Merchandising business, and
after managing a range of uniform programs
on behalf of existing IVE customers (eg IAG and
Woolworths), corporate uniforms was identified as
a natural and growing product adjacency.
The corporate uniform market in Australia is
estimated to be ~$1.2bn and growing at around
5.3% CAGR. The main revenue drivers for uniforms
are general wear and tear as well as attrition
(which is typically higher in uniformed roles) and
underpins the strong potential of this category.
Although a relatively new player to this market,
the Group’s unique service proposition includes:
> Extensive client base – at least 10% of IVE’s
~3,000 customers are estimated to have
substantial ($100k+ p.a.) uniform spend with
a further 20% having a more modest (<$100k
p.a.) spend;
> Corporate uniforms complement our current
creative services and logistics offering;
> Intimate knowledge of the brands we work with
and access to their brand collateral;
> Ability to leverage our scale to disrupt existing
pricing structures;
> Capital and resources to build our own team
and/or the potential to acquire an existing
apparel business; and
> Strong ESG sourcing credentials and innovative
ideas around sustainability for discarded
uniforms (a natural outworking of high staff
turnover, especially in the retail/hospitality
industries).
Current major apparel and corporate uniform
clients include Certis (Sydney and Adelaide
airport security, Sydney Trains security), Surf
Lifesaving NSW, Transport NSW, Reece and
Woolworths, while the Group has a strong pipeline
of opportunities including several promising RFPs/
trials in progress.
27
Year in review
Packaging update
Consistent with IVE’s strategy of revenue
diversification and growth via expansion into new
product adjacencies, the Group has identified the
packaging sector as presenting attractive organic
and acquisition led growth opportunities. During
2022, the Group worked closely with an expert
advisory firm to complete an in-depth analysis of
the Australian packaging market with a view to
further developing and refining plans for a more
aggressive move into the packaging sector.
Key success indicators include a pathway to
establish a packaging business that has the
potential to generate $150m of revenue within
3–5 years, with sustainable returns and medium-
term growth prospects that aligns with IVE’s
sustainability agenda and offers synergies with
the existing business.
The analysis identified two segments of the
packaging sector of interest:
> Higher margin, shorter run, folding cartons; and
> Primary (food) packaging focused flexibles.
The ~$800m folding cartons market makes up
a large percentage of the preferred packaging
format for large food and beverage customers,
is growing, and provides sustainable returns
and sound growth prospects for mid-tier
players. Moreover, cartonboard’s sustainability
credentials are sound and the segment offers
meaningful synergies. With current folded carton
revenues of $10m per annum, the segment further
complements IVE’s existing printing and logistics
capability, as well as offering cross-selling
opportunities into the broader Group.
28 | IVE Group Limited Annual Report 2023
Beyond the three largest competitors who
compete aggressively in the long run (high
volume) folding carton space, the mid-to-small
tier players focused on the higher margin, shorter
run, folding carton segment offer opportunities for
IVE to play a leading role over the medium term.
The ~$1.5bn flexibles market incorporates a
large proportion of the preferred packaging
format for food and plays an important role in
food protection, extending food shelf life so as
to reduce wastage. Primary flexibles packaging
(the first layer around the product) offers more
value-add opportunities through print design
and packaging structure with technology
around artwork and inventory management
complementary to IVE’s existing activities.
Moreover, IVE currently sources around $2m p.a.
of flexibles product for existing customers and has
access to a significant and diverse customer base
for cross-selling opportunities.
Due to similarities with many of the Group’s
existing businesses and its aligned ESG
credentials, the fibre-based folding carton
segment is IVE’s initial and primary area of focus.
While optimistic of advancing IVE’s packaging
strategy in FY24 via the completion of a modest
beachhead acquisition, we remain prudent and
disciplined with respect to asset selection and
purchase price.
29
Review of
financial performance
30 | IVE Group Limited Annual Report 2023
Basis of preparation
IVE’s Financial Report for the year ended
30 June 2023 (FY23) is presented in accordance
with Australian Accounting Standards which
comply with International Financial Reporting
Standards (IFRS).
Certain non-IFRS financial information has also
been included in this report to assist investors in
better understanding the underlying performance
of IVE. The non-IFRS ‘underlying’ financial
information pertaining to the FY23 and FY22
results is presented before the impact of certain
non-operational items.
The directors believe the non-IFRS underlying
results better reflect the underlying operating
performance and is consistent with prior
year reporting.
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 may occur.
Ovato consideration, net assets acquired and
associated goodwill is summarised below:
Financial results on an IFRS and underlying basis (underlying where noted)1
Revenue
Material profit
% of revenue
Underlying EBITDA
Underlying EBITDA margin
EBITDA
Depreciation and amortisation
EBIT
Net finance costs
NPBT
Income tax expense
NPAT
NPATA
Underlying NPAT
Underlying NPATA2
Underlying ROFE3
Underlying ROE4
IFRS diluted earnings per share (EPS)
Underlying EPS
Underlying NPATA EPS
Dividends per share
Underlying payout ratio
FY23
970.2
437.4
45.1%
119.0
12.3%
90.6
52.9
37.6
13.3
24.3
7.2
17.1
20.2
39.7
42.7
24.7%
21.1%
11.4¢
26.4¢
28.5¢
18.0¢
FY21
$m
759.0
353.7
46.6%
96.6
12.7%
90.5
42.0
48.5
9.1
39.3
12.4
26.9
30.3
33.1
36.4
21.3%
18.5%
18.6¢
23.1¢
25.4¢
16.5¢
69.0%
71.4%
Variance
%
27.8
23.7
(3.3)
23.1
(3.4)
0.1
26.0
(22.4)
46.2
(38.1)
(42.0)
(36.2)
(33.4)
19.8
17.1
16.0
14.1
(38.7)
14.5
12.2
9.1
3.3
1. The underlying financial results are on a non-IFRS basis, exclude certain non-operating items and are not audited or reviewed.
2. NPATA – NPAT excluding amortisation of customer contracts.
3. ROFE – Underlying EBIT/average funds employed (where funds employed represents net assets plus net debt).
4. ROE – Underlying NPAT/average equity.
31
Review of financial performance
Revenue
IFRS revenue increased 27.8% to $970.2m from
$759.0m in the prior corresponding period (pcp).
Underlying revenue (which excludes Lasoo)
increased 27.5% to $967.4m from $759.0m pcp.
Ovato assets (acquired selected assets on
13 September 2022) contributed around $136m
of revenue while Active Display Group (ADG)
and AFI Branding Solutions (AFI) (both acquired
1 November 2021) contributed $25.0m of
additional incremental revenue over pcp.
Excluding acquisitions (Ovato and ADG/AFI),
organic revenue growth for the year was strong at
around $47.4m or 6.2% and reflects a further uplift
in activity post COVID-19, strong new business
momentum (especially in 1H FY23), continued high
levels of client retention and ongoing cross-selling
of the Group’s broad offering.
Revenue growth was broad-based with
particularly strong growth achieved in Brand
Activations (formerly Retail Display), logistics (3PL
– 3rd party logistics) and fulfilment.
Travel and tourism-related revenue improved
further during the year, however remains below
pre-COVID-19 levels.
Material gross profit margin (MGM)
IFRS and underlying material gross profit (revenue
less material cost of goods sold) margin for the
year was 45.1%, down from 46.6% pcp.
Although MGM decreased relative to pcp,
excluding Ovato the Group’s MGM, EBITDA and
NPAT margins remain stable.
It is important to understand that the Group’s
consolidated MGM reflects differing MGMs across
the various business divisions and has continued
to change as the business has evolved and
broadened its offering over the past decade.
The primary driver of the reduction in MGM in the
most recent period was business mix including
the onboarding of significant Ovato revenue
at a lower MGM, combined with an increase in
outsourced (supply chain management) revenue.
Whilst Ovato revenue, like IVE’s existing web
offset print revenue, generates a lower MGM than
the Group’s other divisions, the Ovato revenue
contributed incremental EBITDA and NPAT and
is expected to generate an uplift in the Group’s
EBITDA and NPAT margins once operating
synergies are fully captured post completion
of integration.
Timing differences associated with the passing
on of increased input costs (particularly paper,
freight and consumables) to clients also
contributed to the reduced MGM, however, input
costs have showed signs of easing more recently.
32 | IVE Group Limited Annual Report 2023
Earnings, NPAT and EPS
IFRS EBITDA increased marginally to $90.6m from
$90.5m pcp, with strong underlying earnings
growth offset by non-operating items mainly
relating to Ovato integration and acquisition
costs as well as Lasoo operating losses as
tabled overleaf.
Underlying EBITDA increased 23.1% to $119.0m
from $96.6m pcp. Excluding an estimated $11.0m
contribution from Ovato, underlying EBITDA
growth was 11.8% driven by the strong uplift
in revenue, partially offset by the business
mix changes noted and increased input costs,
including a material increase in energy (electricity
and gas) costs relative to the prior year.
Production labour and overhead costs increased
in line with revenue, primarily due to the
acquisitions of Ovato, ADG and AFI.
IFRS depreciation and amortisation of $52.9m
was up from $42.0m pcp. This was largely due to
$4.8m of Ovato depreciation ($1.2m pre-AASB 16),
a $4.2m held for sale asset impairment charge
(reflecting the decision to expedite Ovato site
exits) and $1.0m of Lasoo software amortisation.
Underlying pre-AASB 16 depreciation (excluding
amortisation) was $18.3m, up from $16.9m pcp.
IFRS EBIT of $37.6m compares to $48.5m pcp,
again impacted by non-operating items including
the held for sale asset impairment charge.
Underlying EBIT increased 30.4% to $71.2m
from $54.6m pcp. Excluding an estimated $6m
contribution from Ovato, underlying EBIT growth
was 19.4%.
IFRS net finance costs were $13.3m compared to
$9.1m pcp.
The increase in net finance costs reflects higher
net debt coupled with significantly higher
interest rates (noting that the domestic cash rate
increased 3.25% during the year).
IFRS NPAT of $17.1m compares to $26.9m pcp,
with the reduction on the prior year due to
materially increased restructure and acquisition
costs primarily relating to the Ovato acquisition
as well as Lasoo operating losses.
Underlying NPAT increased 19.8% to $39.7m
from $33.1m pcp. Excluding an estimated
$4m contribution from Ovato during the period,
NPAT growth was 7.9% reflecting the strong
EBIT growth partially offset by higher net
finance costs.
IFRS earnings per share for the year was 11.4
cents or 26.4 cents on an underlying basis
representing a 14.5% uplift from 23.1 cents pcp.
33
Review of financial performance
IFRS to underlying NPAT reconciliation
IFRS NPAT
Restructure costs – Ovato
Restructure costs – IVE base
Acquisition costs
Ovato asset impairment and loss on disposal net of refundable
consideration
Software as a service expense (still in development/
implementation phase)
Lasoo consumer go-to-market campaign and team buildout
Other items
Pre-tax non-operating items
Tax effect of adjustments
Underlying NPAT
FY23
$m
17.1
16.0
4.1
3.0
3.5
1.4
5.7
(0.2)
33.5
(10.9)
39.7
FY22
$m
26.9
–
4.9
0.7
–
1.7
–
0.9
8.2
(2.1)
33.1
Non-operating items included in IFRS NPAT but excluded from underlying NPAT include:
> Restructuring costs of $20.1m ($4.9m pcp) with $16.0m pertaining to the integration of acquired Ovato
assets, including the decommissioning and relocation of certain machinery;
> The Group also incurred $4.1m of restructuring costs pertaining to the completion of the relocation
of four Victorian businesses into the new Braeside precinct, including integration of the ADG and AFI
acquisitions finalised late in 2022, as well as the relocation of NSW distribution to Erskine Park;
> Acquisition costs of $3.0m ($0.7m pcp) primarily relating to the Ovato transaction;
> A $3.5m Ovato charge comprising the impairment of assets held for sale coupled with a loss on
disposal of assets net of refundable consideration;
> Software as a service (computer) expenses of $1.4m ($1.7m pcp) are excluded from underlying earnings
as the MIS system was still in its development/implementation phase; and
> A $5.7m pre-tax loss reflecting Lasoo’s consumer go-to-market campaign and team buildout.
34 | IVE Group Limited Annual Report 2023
Balance sheet, capital expenditure and cash flow
Net debt
Loans & borrowings
Less cash
Net debt
FY23
$m
169.1
44.9
124.2
FY22
$m
143.8
67.0
76.8
Loans and borrowings are gross of facility establishment costs and exclude AASB 16 liabilities impacts.
Loans and borrowings increased to $169.1m at 30 June 2023 from $143.8m at 30 June 2022, mainly
driven by increased working capital and integration costs associated with the Ovato acquisition.
Net debt increased to $124.2m at 30 June 2023 from $76.8m at 30 June 2022, primarily reflecting strong
underlying cash flow offset by:
> An increase in working capital as discussed below;
> Integration costs (primarily Ovato-related); and
> Lasoo launch costs.
Net debt to equity increased to 64.2% at 30 June 2023 from 42.1% at 30 June 2023.
Net debt at 1.4x pre-AASB 16 EBITDA (1.1x post-AASB 16) remains below the Group’s target level of 1.5x.
35
Review of financial performance
During October 2022, IVE undertook a well-
supported institutional share placement and
retail share purchase plan (issuing a combined
total of 8.587m shares @ $2.25 each) which raised
$18.6m net of related transaction costs.
The capital raising was undertaken to:
> Preserve balance sheet capacity for IVE to
pursue previously announced growth initiatives
including further organic initiatives (e.g. Lasoo
e-Commerce market place);
> Support further opportunistic ‘bolt-on’ and/
or strategic acquisitions (e.g. in the adjacent
packaging sector); and
> Strengthen and deepen IVE’s institutional
shareholder base, increasing liquidity in the
market for IGL shares.
Capital expenditure
Investment and maintenance
Lasoo
Ovato
Total
Proceeds from the share issue were more than
offset by the $15.7m Ovato purchase cost
(including related transaction costs) and
associated restructuring costs.
In conjunction with completion of the Ovato
transaction, the Group further increased inventory
(paper) levels to ensure no disruption to client
service levels across the expanded (post Ovato)
customer base, and to place the business in a
strong position to take advantage of any growth
opportunities should they emerge.
On 31 May 2023, the Group finalised expanded
banking facilities including:
> A $30m increase to the existing working capital
facility; and
> The establishment of a $40m acquisition
facility.
Undrawn facilities at 30 June 2023 remain $35m,
with a $30m drawdown offset by expansion of the
facility.
FY23
$m
13.9
1.0
1.6
16.5
FY22
$m
13.9
4.7
-
18.6
Major (non-Ovato related) capital expenditure undertaken during the year included:
> $1.9m related to the now completed Victorian (Braeside) site consolidation;
> $1.1m related to the now completed fit-out of the new Erskine Park logistics site;
> $3.2m related to the now completed digital print fleet upgrade and expansion in NSW; and
> $1.0m to complete the Lasoo e-Commerce platform rebuild.
FY24 capital expenditure is expected to be around $14m (excluding Ovato which is expected to be $4.5m).
36 | IVE Group Limited Annual Report 2023
Cash flow
EBITDA
Movement in NWC/non-cash items in EBITDA
Operating cash flow
Capital expenditure (net)
Proceeds from assets held for sale
Payments for acquisitions and deferred consideration
Net cash flow before financing and taxation
Tax
Net proceeds of bank loans
Payment of finance lease liabilities
Payment of equipment finance loans
Proceeds of share issue
Dividends paid
Net interest paid
Transaction costs on facility increase
Net cash flow
Operating cash conversion to EBITDA
Free cash conversion to EBITDA2
Underlying1
FY23
$m
119.0
(40.8)
78.2
(11.0)
2.1
(16.6)
52.7
(23.9)
30.0
(38.4)
(3.9)
18.6
(25.9)
(6.6)
(0.4)
(2.2)
65.7%
56.5%
IFRS
FY22
$m
90.6
(45.9)
44.7
(11.0)
2.1
(16.6)
19.3
(14.8)
30.0
(38.4)
(3.9)
18.6
(25.9)
(6.6)
(0.4)
(22.2)
49.4%
37.2%
1. The underlying financial results are on a non-IFRS basis, exclude various non-operating items and are not audited or reviewed.
2. Excludes proceeds from assets held for sale.
IFRS operating cashflow of $44.7m during the year, reflecting 49.4% operating cash conversion, was
impacted by acquisition and restructuring costs as well as a significant increase in working capital
associated with the Ovato acquisition. While not impacted by acquisition and restructuring costs, the
increase in working capital also impacted underlying operating cash flow of $78.2m, reflecting 65.7%
operating cash conversion, down from 94.9% pcp.
Improved supply chain stability should facilitate a reduction in working capital (primarily paper) during
the second half of calendar 2024.
The Board declared a fully franked final dividend of 8.5¢ per share, up 6.3% from 8.0¢ per share pcp.
This resulted in a full year dividend of 18.0¢ per share, up 9.1% from 16.5¢ per share pcp, representing a
full year payout ratio of 69.0% consistent with the Company’s dividend policy of targeting a full year
payout ratio of 65% to 75% of underlying NPAT.
37
Environmental, social
and corporate governance
38 | IVE Group Limited Annual Report 2023
Leading change for a brighter future
with our ESG strategy
As a global community, we face increasingly
complex challenges – from navigating the
impacts of climate change to reducing how we
consume resources to delivering a more equitable
and inclusive society. Over the last 12 months,
IVE has adopted a proactive approach in
response to increased stakeholder interest
regarding our commitment to Environmental,
Social and Governance (ESG) topics in face of
these challenges.
The Board and Executive recognise the critical role
of ESG, and know we have a responsibility to our
people, customers, investors, wider stakeholders,
and the planet. Drawing on more than 100 years
of adapting to change and acting responsibly, IVE
is proud to announce our 2025 ESG strategy that
embeds sustainability throughout our business
and decision-making process so we can continue
to have a meaningful and positive impact.
In 2022, the Group engaged a specialist
consultancy, Edge Impact, to work collaboratively
with us in the design and implementation of
a comprehensive ESG strategy. Focusing on
developing an evidence-based approach, we
conducted peer and sector reviews, extensive
internal and stakeholder interviews and
conducted a Group Scope 1, 2 and 3 carbon
footprint and supply chain social risk assessment.
This process informed the material issues most
relevant to our business, shaping the development
of a robust and transparent sustainability
framework and setting ambitious targets.
The Group’s calendar year 2021 carbon footprint
was assessed at 1,001,863.1 tCO2-e with most of
these emissions resulting in activities in Scope 3,
indirect upstream and downstream emissions
that occur in our supply chain.
Scope 1, 2 and 3 emissions
Scope 3 emissions
Scope 3 emissions account for 95% of our total emissions, with purchased goods and services contributing
to 53.6% of emissions, followed by downstream transportation and distribution and waste generation in
operation, each accounting for 29.9% and 11.2% respectively.
As part of our commitment to achieving better outcomes for society, our ESG strategy focuses on three
key strategic pillars – designing innovative customer solutions, valuing our people and communities,
and maintaining responsible operations and supply chains. Led by our guiding principles – ‘Tailor made’,
‘At the ready’, ‘Leading the way’ and ‘Always on point’ – our goals for 2025 and beyond will hold us
accountable on our journey and ensure we continue to make a positive and measurable impact for our
customers, people, the communities we invest in and the planet.
39
Environmental, social and corporate governance
2025 ESG strategy targets
Innovative customer
solutions
Valuing our people and
communities
Responsible operation and
supply chains
We are leaders in designing
innovative, low impact
products that help our
customers navigate
sustainable design decisions
Informing better choices
> 100% of our quotes have an
associated environmental
impact rating
> 100% of our textile products
have access to a take back
scheme
Adapting and leading for
the future
> We have led three collaborate
projects with key stakeholders
that deliver material emissions
or waste reduction
> We are active and vocal
advocates for sector wide
action on waste avoidance,
circularity and low carbon
solutions, demonstrated
through engagement with
key industry initiatives and
partnerships
> 4% of addressable spend is
contracted to social suppliers
Valuing our people and
communities
We value and look out for our
people, and the communities in
which we operate
We use resources responsibly
and ethically in our business
and supply chain
Creating a safe and vibrant
workplace
Mitigating our climate impacts
and risks
> Established lead indicator
metrics and track
performance
> Transition to 50% renewable
electricity, with an aim to
achieving 100% by 2030
Cultivating a diverse and
inclusive team
> Achieve a 40/40/20
gender ratio across senior
management
> Achieve WEGA Employer of
Choice for Gender Equality
(EOCGE) citation
Backing the communities that
back us
> 30 graduate, cadet and
apprenticeship participants
sourced from Indigenous,
CALD, youth, disability and
older Australian cohorts
> Establish a formalised
approach to donations
through establishing the IVE
Group community investment
fund, donating $200k per year
> Achieve a minimum 25%
reduction in scope 1 & 2
emissions intensity (metric)
against CY21 baseline
> Year-on-year reduction in
Scope 3 emissions
Working towards regenerative
and ethical supply chains
> Initiate a demonstration
project with paper supply
chain to highlight sustainable
forestry innovation and
impact
> Maintain commitment of
100% paper stock from PEFC/
FSC certified sources
> ESG considerations included in
category management plans
for Top 6 categories by risk,
spend and volume
> Minimum of 80 certified
Protecting our local ecosystems
mental health first aid staff
employed in the business
each year
> Create a Reconciliation Action
Plan (RAP) and establish an
indigenous engagement policy
> Reduce total operational
waste intensity by 20%
against CY21 baseline
40 | IVE Group Limited Annual Report 2023
Underpinning the Group’s ESG approach will be
an ongoing commitment to transparency and
authenticity through GRI-aligned and TCFD
disclosure coupled with robust governance
including establishing an ESG Committee and
integrating ESG performance metrics into the KPIs
of management and key staff.
As an initial but important step towards
materially reducing IVE’s Scope 2 emissions,
in April 2023, the Group executed a 7-year
partnership agreement with Iberdrola, one of the
world’s largest renewable energy companies.
In addition to enabling IVE to better manage
increasingly volatile electricity costs, the
agreement will facilitate our transition to 100%
renewable energy by 2030. Over the coming years,
the Group also intends implementing a range of
other initiatives from commissioning Life Cycle
Assessments that compare the environmental
impact of products and services, to establishing
a process to track our ongoing community
investment spend, impact and donation decisions
to achieve our targets.
At IVE, we believe in continuous improvement. Our
vision for a brighter future is long term and this
means continuously assessing data to evaluate
and measure our progress against industry
benchmarks so that we can reduce the negative
impacts of our operations and bolster the positive
contribution we make to society.
The Group is committed to reporting annually to
our stakeholders and setting a course for action
under the ESG strategy every three years to ensure
our approach is in-line with changing stakeholder
expectations and reflects the evolving industry in
which we operate.
As we progress on our journey, we welcome
feedback and stakeholder participation, and
we look forward to sharing our progress in future
reporting and communications.
People and culture
Proudly inclusive, 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.
Thankfully this past year saw an end to most
of the pandemic impacts with our workplaces
essentially returning to normal. While this was
appreciated by all, we again acknowledge the
significant efforts and contribution of all our
employees in successfully meeting the pandemic
impacts and challenges across the previous three
financial years.
41
Environmental, social and corporate governance
We are exceptionally proud of our people. Our
IVE Care program provides our 2,000+ employees
with access to a wide range of support and
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.
Education, information programs and health and
wellbeing campaigns are also made available
42 | IVE Group Limited Annual Report 2023
through the EAP to assist employees in making
changes for a healthier lifestyle. Our EAP
continues to be an excellent source of support and
benefit for employees dealing with a range of
difficult circumstances.
We saw a modest decline in access to the
EAP across FY23, which was to be expected
with pandemic challenges abating. Flu
vaccinations were again offered across the IVE
business during FY23, and the business again
conducted an employee awareness initiative
aligned to R U OK? Day.
During FY23 we undertook training of additional
accredited Mental Health First Aiders across
the Group. The presence of these First Aiders
continued to be beneficial to the business and
employees across FY23, with numerous instances
where we could offer support to employees in
need. We now have close to 50 accredited Mental
Health First Aiders.
Lifestyle benefits
The IVE Rewards Program provides our employees
and their families the opportunity to stretch their
dollar further through significant savings at all
their favourite retailers. The program is a valued
benefit and well utilised by employees. Our
employees spent more than $1.3m through this
program across FY23, yielding savings of
close to $80,000.
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 also has 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 several great charity
partners to provide employees with a simple
and effective way to regularly donate from their
pre-tax earnings.
Diversity and inclusion
We come from many different nationalities,
backgrounds, experiences and lines of work. IVE
is very proud of the fact that we have employees
originating from more than 50 different countries,
spanning 70 different cultural backgrounds. 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.
The 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,
IVE’s Diversity and Inclusion Program reinforces
our commitment to growing a diverse and
inclusive organisational culture encompassing
and benefiting all employees.
IVE’s 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 Islanders;
> LGBTIQA+ (lesbian, gay, bisexual, trans/
transgender, intersex, queer/questioning,
asexual); and
> Disability.
In mid-2022, the Group partnered with an
external provider to conduct a comprehensive
employee workplace survey which included,
amongst a range of other important areas, a
significant focus on obtaining greater insight
into the diversity and inclusiveness across our
workforce (areas covered included nationality,
gender, sexual identity and orientation,
indigenous identity and disability). We had a
high participation rate with close to 1,000 (50%)
employees completing the survey.
The survey provided us with valuable data
and insight to both better understand and
celebrate the diversity within the business, and
to provide ongoing input for areas of focus and
new initiatives.
In FY23, IVE again partnered with the Australian
Network on Disability to participate in their
‘Stepping Into’ internship program – we have
3 internships in place under this Program.
Pleasingly, an FY22 intern under this program has
since become a permanent team member. Once
again, the Group ran a number of awareness
events related to International Women’s Day,
Pride Week, Liptember and R U OK? Day.
Sustainability and risk management
As the expectations on corporate responsibility
increase, and as transparency becomes more
prevalent, IVE recognised some time ago 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.
Quality assurance
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 provide superior products
and services to our customers, measured in terms
of performance, reliability and durability, and
returned in customer satisfaction and loyalty.
We welcome feedback from our clients and strive
to continue to provide this level of excellence from
marketing technology through to production
and distribution.
43
Environmental, social and corporate governance
Ethical sourcing and
environmental management
IVE continues to deliver several processes to
ensure that we remained focused on improving
sustainability and the ongoing protection of
the environments that we source from, work in
and supply.
IVE expects all our suppliers to adhere to the
same ethical values we uphold and has rigorous
controls to ensure that every supplier is assessed,
complies with our values and standards, and
meets or exceeds our delivery expectations.
By blending our best practices with socially
responsible sourcing, we achieve optimal levels
of cost efficiency, product/service effectiveness
and product safety in a sustainable, inclusive and
ethical manner.
IVE is an active member of Supplier Ethical
Data Exchange (SEDEX). Supplier membership
is highly regarded and allows IVE to assess the
risk in labour standards, health and safety,
environmental impact and provide supply chain
visibility. Ensuring good business practices
is important to our clients, employees and
shareholders.
IVE supports the introduction of the Modern
Slavery Act 2018. Modern slavery involves the
exploitation of human beings and is completely
unacceptable. The Group has a responsibility
to improve our understanding and mitigate the
risks of Modern Slavery within our operations
and supply chains. IVE has implemented a
comprehensive set of controls to ensure the
integrity of our own operations and our suppliers.
We continue to hold certification 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 assures they
are free from any direct or indirect involvement
in activities that violate traditional and human
rights in forestry operations, as required by
44 | IVE Group Limited Annual Report 2023
the International Labour Organization (ILO)
Convention 169.4.
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. Sustainably managed
forests provide economic livelihood for local
communities, improve forest regeneration, and
deliver sustainable solutions to the biodiversity,
fauna conservation and other environmental
improvements. They also prevent deforestation
due to mono-culture planting for agricultural
crops or urbanisation due to population increases
and/or industry 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.
Trees from sustainably managed forests are
grown and harvested in a carefully controlled
and sustainable way to produce paper. Australia
has 2m hectares of working tree farms (Two
Sides, 2023). The two key forestry certification
schemes are PEFC and FSC, of which IVE carries
certification across both.
The industry is a leading recycler with 87% of
paper recovered for recycling in Australia, up from
28% in 1990, with household initiatives delivering
household paper product recycling closer to 93%
(APIA, 2022). By comparison e-waste recycling is
only 9.6% (Love Paper, 2021).
Catalogues and publishing paper grades without
finishings are 100% recyclable. Recycling
complements the need for virgin wood fibre,
further supporting the growth in fibre-based
products and packaging as an environmentally
sustainable alternative to single-use plastic,
of which State Government bans now apply
across the country (VoPP, 2023).
Around 90% of IVE’s paper requirement is sourced
offshore due to specific requirements and fixed
local manufacture capacity. IVE sources paper
from North America, Scandinavia, Europe,
Southeast Asia, UK, Italy, Canada, Switzerland,
Malaysia, France and Belgium – all from highly
compliant and certified paper manufacturing
companies.
Despite the proliferation of digital media, paper-
based media channels remain stable in volume,
societal balance and consumer preference.
Post-COVID volume declines, catalogues
realised a 4.7% increase in volume and a 34.4%
increase in pagination between 2021 and 2022
(TRMC, 2023). The Australian government review
into the modernisation of the postal system
accepted submissions outlining the significant
contribution of paper media channels to the
societal balance with those most impacted
by the digital divide being the most vulnerable
citizens. Moreover, 59.4% of scams and frauds
are from digital channels with only 0.65% being
from paper-based or letterbox scams (ACCC,
2023). 2.42 million Australians are highly digitally
excluded, with the aged, indigenous, and lower
income quintile communities the most impacted
(ADII, 2023).
Demonstrating growing societal concern around
digital channels, 78% of Australians believe
consumers should be given the choice of how to
receive their bills/statements, 61% don’t believe
they should be charged more for paper bills or
statements, 50% feel they spend too much time
on electronic devices, 60% report they do not
pay attention to online advertisements and 66%
report they are more likely to take action when
receiving printed mail (Love Paper, 2022).
Consumer preference for the channel remains
high with 74% of consumers preferring to read
from paper rather than from screens and 71%
enjoying 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
(Toluna, 2019).
Data security
IVE invests more than $2 million
annually to maintain best in class
data security certifications such as
ISO 27001, PCI DSS (RoA) and SOC 2 Type II, which
provide a mature information security profile that
supports our customers’ 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 Group has
invested significantly in enterprise grade software
and hardware to protect 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.
In the last review conducted in June 2023, the
following key risks were identified as being
the most relevant to the business achieving its
operational and financial targets.
45
Environmental, social and corporate governance
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
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 environment/
emissions and ASX disclosures
IVE will take a proactive
approach to the risks
posed by cyber security
threat. The level of risk will
be managed by specific
actions and potential for
an identified risk event. This
will be measured by closely
tracking/monitoring attempts
to penetrate the IVE IT
ecosystem
.
IVE will continue to drive its
diversification strategy to
protect the business, to the
extent possible, from impacts
of sector decline across
traditional printed product(s)
Environment Environmental,
Social, and
Governance (ESG)
Pressure from
stakeholders due to
lack of disclosure and
policy to support ESG
IT, Systems &
Security
Cyber security
Failure to protect
the business from
ransomware,
phishing, data
leakage, hacking or
insider threat
Customer
Changing customer
expectations
Failure to adapt to
changing customer
expectations driven
by increased cost,
and/or disruptive
technologies.
In particular, a
continued reduction in
printed material due
to digital alternatives
46 | IVE Group Limited Annual Report 2023
> Inputs readily available through
multitude of suppliers
> Price elasticity 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
> Seek to increase 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 work streams with
outsource providers
> Agreed Cyber security and
business continuity plans in
place
> Information security policies
ISO 27001
> External penetration testing
> Quarterly vulnerability scans
> Restricted firewalls
> Appropriate level of Cyber
insurance
> Investment in improved
technologies and software
> Continue to communicate
the efficacy of print as a
cost effective marketing
communications channel
> Continue to communicate
print is a core component of
the communications omni
channel mix
> Monitor customer feedback to
drive ongoing review of product
and services sustainability
> Diversify revenue streams
both organically and through
acquisition
> Reduce customer financial
impact due to input cost
increases to protect channel
Key Risk
Description
Risk Appetite
Mitigation
People
Labour Supply
Limited skilled and
unskilled human
resources available
and staff retention
due to increases in
market demand and
competitiveness
Competitive
Environment
Existing Competition
Drives Margin Down
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). Inflation,
energy, gas and
other cost increases
as well as the
impact of increased
interest rates.
Possible recessionary
environment
IVE will take a balanced
approach to the risks
associated with retaining
and attracting skilled and
unskilled 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 or employment
alternatives
IVE will take risks in response
to competition and the
competitive environment that
represent 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
> Remuneration reviews
> Training & development
> Staff benefits i.e. shares, short-
term incentives (STI), employee
assistance program (EAP)
> Succession planning
> Flexible workplace
> Employer of choice
> Career progression opportunities
> Appropriate contract labour
suppliers
> Monitor pricing in market
> Continuous conversations with
customers
> Driving consistent and high level
customer service
> Ability to pass costs on to
customers
> Strategic long-term planning
> Horizon scanning by executive
> Indicators in day-to-day figures
i.e. increased debtor days
> MGM and margin decreases
> Sourcing better pricing for long
term. e.g. energy and gas
Additional information
For further information contact:
IVE Group Ltd
Level 3, 35 Clarence Street
Sydney NSW 2000
Matt Aitken
Chief Executive Officer
+ 61 2 8020 4400
Darren Dunkley
Chief Financial Officer
+ 61 2 8020 4400
Tony Jackson
Investor Relations
+ 61 2 9089 8548
47
Directors’
report
for the year ended 30 June 2023
48 | IVE Group Limited Annual Report 2023
The directors present their report together
with the consolidated financial statements of
the Group comprising of IVE Group Limited (the
Company), and its subsidiaries (the Group or IVE
Group) for the financial year ended 30 June 2023
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 2023 was $17,148 thousand (2022: $26,932
thousand). A review of operations and results of the
Group for the year ended 30 June 2023 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 8.5
Australian cents per share, fully franked, to be paid
on 12 October 2023 to shareholders on the register
at 14 September 2023.
Total dividends of $25,930 thousand were declared
and paid by the Company to members during the
2023 financial year. Further details on dividends are
included in Note 24 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
> 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.
On 13 September 2022, IVE acquired selected assets
and assumed selected liabilities of Ovato Limited’s
(Ovato) heatset web print business. Further details
on the acquisition is included in this Financial Report.
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.
49
Directors’ Report
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
Appointed:
10 June 2015
Gavin Terence Bell
Independent
Non-Executive
Director
Appointed:
25 November 2015
Geoff has over 30 years' experience in the marketing communications sector. Geoff
was managing director of IVE Group prior to moving into the role of executive
chairman following the Company’s listing on the ASX in December 2015.
Geoff is a director of 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. Previous not-for profit experience included
9 years on the board the Heart Foundation NSW and 3 years on the board
of the Pinnacle Foundation.
Geoff holds a Bachelor of Economics from Macquarie University and is a member
of the Australian Institute of Company Directors.
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.
Gavin holds a Bachelor of Law from the University of Sydney and a Master of
Business Administration 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
Appointed:
1 June 2016
Sandra has a track record in driving customer-centred business transformation
and transitioning traditional organisations in rapidly evolving environments.
A former Managing Director, CEO and CMO for some of Australia’s largest media
companies including News Limited, Foxtel, Federal Publishing Company, Murdoch
Magazines and Fairfax, Sandra brings more than 20 years’ experience as a non-
executive director on listed, public and private companies and government bodies.
Paul Stephen Selig
Executive Director
Appointed:
10 June 2015
Sandra is currently a director of MedAdvisor Ltd (ASX: MDR), iCollege Limited
(ASX: ICT), CRC Fight Food Waste, and the Sydney Harbour Foundation
Management Ltd.
Sandra is a member of the Australia Institute of Company Directors.
Committees: Member of the Nomination & Remuneration Committee
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 was 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.
50 | IVE Group Limited Annual Report 2023
Director
Experience, special responsibilities and other directorships
James Scott
Charles Todd
Independent,
Non-Executive
Director
Appointed:
10 June 2015
Catherine Ann Aston
Independent,
Non-Executive
Director
Appointed:
15 December 2020
Andrew Peter
George Bird
Independent,
Non-Executive
Director
Appointed:
1 April 2022
James is an experienced company director, corporate adviser and investor. James
commenced his career in investment banking and has taken active roles in a range
of private and public companies. Until recently, James was Managing Director of
Wolseley Private Equity, an independent private equity firm he co-founded in 1999.
James is also a Non-Executive Director of Coventry Group Limited (ASX: CYG),
and Bapcor Limited (ASX: BAP). James was previously a Director of HRL Holdings
Limited (ASX: HRL).
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. James is
also a member of the Australian Institute of Company Directors.
Committees: Member of the Audit, Risk & Compliance Committee.
Cathy is an internationally experienced executive and non-executive director
across a diverse range of sectors including telecommunications, digital,
government and financial services. Cathy has a broad commercial background
with senior roles including CEO, CFO, marketing, strategy and digital business.
Cathy is currently Chair of IMB Bank Ltd and a director of Macquarie Investment
Management Ltd (Chair of Board Audit Risk and Compliance Committee)
and Integrated Research Ltd (ASX: IRI) (Chair of the Audit, Risk & Compliance
Committee) Cathy was previously a director of Virtus Health Ltd (ASX: VRT) and
Over The Wire Ltd (ASX: OTW).
Cathy holds a Bachelor of Economics from Macquarie University and
a Master of Commerce from the University of NSW. Cathy is a Senior Fellow
of the Financial Services Institute of Australasia and a member of the
Australian Institute of Company Directors.
Committees: Chair of the Audit, Risk & Compliance Committee, Member of the
Nomination & 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, Andrew joined CCH, a multi-national listed publishing
company and ran one of their business units in Australia. In 1997, Andrew
co-founded Aspect Huntley which 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.
Committees: Member of the Nomination & Remuneration Committee.
51
Directors’ Report
Company Secretaries
Directors’ interest 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 Fellow 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 Group
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 69.
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)
Nomination &
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*
17
17
17
17
17
17
17
17
17
17
17
17
16
17
-
4
-
-
4
4
-
-
4
-
4
4
-
-
4
4
-
1
-
3
-
4
4
-
1
-
3
2
-
-
-
-
2
-
2
-
-
-
-
2
-
* Andrew Bird replaced James Todd as a member of the Nomination & Remuneration Committee during FY23.
52 | IVE Group Limited Annual Report 2023
Events subsequent to reporting date
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.
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.
Likely developments
Insurance premiums
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.
During the financial year the Company has paid
premiums in respect of directors’ and officers’
liability insurance contracts for the year ended
30 June 2023. 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 2024. 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.
53
Directors’ Report
Remuneration
report
The remuneration report contains the following
sections:
> Introduction
> Persons covered by this Report
> Overview of the remuneration framework for
Executive KMP
> Linking reward and performance
> Grant of Performance Share Rights and the
Long-Term Incentive Plan
> Non-Executive Director remuneration framework
> Contractual arrangements with Executive KMP
> Details of remuneration for KMP
> Rights granted to Executive KMP
> Director and Executive KMP shareholdings in IVE
Group Limited
> Other statutory disclosures
Introduction
This Remuneration Report (Report), which has been
audited, describes the Key Management Personnel
(KMP) remuneration arrangements for the 12 months
ended 30 June 2023 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
aligns remuneration to strategies and business
objectives and provides 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.
54 | IVE Group Limited Annual Report 2023
In addition, the remuneration framework is
designed to be acceptable to shareholders by being
consistent with market practice and creating value
for shareholders.
The 2023 financial year (FY23) saw a broad-
based recovery from the economic, social and
health impacts of the COVID-19 pandemic and a
move towards normalisation of associated supply
chain challenges. While the macro-economic
landscape was supportive for most of the year,
higher input prices (especially energy costs) coupled
with materially higher interest rates presented
some challenges. At the same time, the Company
completed the highly accretive Ovato acquisition
with integration of Ovato assets into IVE sites
progressing ahead of the originally foreshadowed
schedule. In this context, the financial and non-
financial performance of the Company during 2023
was once again strong.
The Company’s strong performance and the
leadership shown by the leadership team is reflected
in the remuneration outcomes for FY23.
The Company achieved an EBITDA result of $119.0m
on an underlying basis post-AASB 16. This compares
favourably to FY22 EBITDA of $96.6m and resulted
in the target for the payment of the key financial
component of the FY23 Short-Term Incentive (STI)
being achieved. Performance against non-financial
remuneration measures and the overall performance
of the company was also very strong. This resulted
in the payment of 98.2% of the STI to each of the
Executive Chairman, the CEO and 100% to the CFO.
The FY21 Long-Term Incentive (LTI) grant reached
the end of its three-year performance period on
30 June 2023. Any shares vesting in relation to this
period will vest after the end of the 2023 financial
year. The three-year EPS CAGR hurdle was met.
Accordingly, 100% of this tranche of the LTI shares
will vest. In addition, over the performance period IVE
achieved a TSR at the 94.38 percentile. Accordingly,
100% of the TSR tranche of the LTI shares will vest.
Details of the value of these shares will be included
in the FY24 Remuneration Report. At the 2022
Annual General Meeting, 98.99% of the shares voted
at the meeting were cast in favour of the adoption
of the Remuneration Report for the year ended
30 June 2022.
Overview of IVE Group’s remuneration
framework for Executive KMP
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:
> Be competitive and reasonable to attract and
retain key talent (which is key to IVE Group’s
business success);
> Align to IVE Group’s strategies and business
objectives;
> Provide a balance between fixed and variable
rewards;
> Be transparent and easily understood; and
> Be acceptable to shareholders.
The Board will continue to review the effectiveness
of the Company’s remuneration practices 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 FY23 financial performance was underpinned
by a strong and broadly based underlying business
performance coupled with the emergence of
synergies from the Ovato acquisition.
While the macro-economic environment was more
accommodating after an extended period impacted
by the COVID-19 pandemic and associated global
supply chain issues, higher input prices presented
some challenges. The Board believes that the
remuneration outcomes for the Executive KMP for the
2023 financial year reflect this and satisfy the goals
of the remuneration framework.
Who this report covers
This report covers Non-Executive Directors and Executive KMP (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
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
55
Directors’ Report
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 FY23.
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. No other changes
were made to the fixed remuneration for KMP during
FY23. The NRC has determined that there will be no
further changes to fixed remuneration for FY24.
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 FY23, Executive KMP (excluding Paul Selig) were
eligible to receive an STI payment of between 34%
and 46% 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, Earnings before Interest, Tax,
Depreciation and Amortisation (EBITDA) 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 consider, for example, overall
performance and any changes to priorities.
56 | IVE Group Limited Annual Report 2023
The percentage weightings across financial and non-financial targets, and the assessed performance
achieved during FY23 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
Target
%
Achieved
%
Target
%
Achieved
%
Target
%
Achieved
%
Target
%
Achieved
%
Geoff Selig
Matt Aitken
Darren Dunkley
40.0
40.0
40.0
100.0
100.0
100.0
0.0
0.0
0.0
0.0
15.0
100.0
60.0
60.0
45.0
97.0
97.0
100.0
100.0
98.2
98.2
100.0
100.0
100.0
Non-financial KPIs for Executive KMP
The non-financial performance measures for the Executive KMP and the individual achievement ratings were
as follows:
Geoff Selig, Executive Chairman
Area
Leadership
Investor relations
M&A and growth
Key initiatives
WHS
Matt Aitken, Chief Executive Officer
Area
Leadership
Investor relations
M&A and growth
Key initiatives
WHS
Darren Dunkley, Chief Financial Officer
Area
Leadership
Investor relations
M&A and growth
Key initiatives
Percentage
weighting
Percentage
achieved
10
15
35
10
30
100
100
100
100
90
Percentage
weighting
Percentage
achieved
10
10
35
15
30
100
100
100
100
90
Percentage
weighting
Percentage
achieved
10
15
35
40
100
100
100
100
The FY23 Actual STI and FY24 maximum STI amounts for Executive KMP are shown in the table on page 59.
57
Directors’ Report
Long-Term Incentive (LTI)
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.
There is no re-testing 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 FY23 to the Executive
Chairman was approved by shareholders at the
2022 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.
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 to
increase the level of long-term incentives for FY24.
They will remain in-line with the same quantum
agreed in respect of FY20, FY21, FY22 and FY23.
The NRC believes 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 KMP 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 to 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.
58 | IVE Group Limited Annual Report 2023
Executive KMP remuneration – paid, vested and targets
The table below presents the STI paid and LTI granted to Executive KMP during FY22 and FY23. Further detail
on remuneration is included in the tables at the end of this Report.
All in $
STI
LTI – Number of Rights
Maximum
Actual
Granted
Vested
Geoff Selig
FY23
200,000
196,400
111,111
FY22
200,000
200,000
168,067
Matt Aitken
FY23
300,000
294,600
111,111
FY22
300,000
300,000
168,067
Darren Dunkley
FY23
180,000
180,000
83,333
FY22
180,000
180,000
126,050
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.
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. As shown below, the fixed remuneration of the
CEO was increased in FY23.
All in $
Fixed Remuneration1
STI
FY22
Actual
FY23
Actual
FY24
Agreed
FY22
Actual
FY23
Actual
FY24
Target
FY22
Grant
LTI
FY23
Grant
FY24
Grant2
Geoff Selig
952,000 952,000 952,000 200,000
196,400 200,000 200,000 200,000 200,0003
Matt Aitken
640,810 700,000 700,000 300,000 294,600 400,000 200,000 200,000 200,000
Darren Dunkley 450,853 528,991 520,000 180,000 180,000 180,000 150,000 150,000 150,000
Paul Selig4
330,000 330,000 330,000 -
-
-
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. FY24 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 consider the risk that rights may not vest and that the
rights are not entitled to dividends. Executive KMP remuneration arrangements were agreed assuming a fair
value approach. The FY24 LTI will again use a fair valuation calculation to determine the quantity
of performance rights to be granted to Executive KMP.
59
Directors’ Report
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 2023 results, as
was done in 2020, 2021 and 2022.
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.
If a face value method were used, the FY23 LTI grant for each of the Executive KMP would be as indicated in the
table below. The number of performance rights granted under the FY24 LTI will be determined and reported in
the 2024 remuneration report.
Geoff Selig
Matt Aitken
Darren Dunkley
Paul Selig
FY23 Fair Value
(No. of rights)
FY23 Face Value1
(No. of rights)
111,111
111,111
83,333
—
115,606
115,606
86,705
N/A
1. Based on the closing share price on 1 July 2022 of $1.73 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 3-year performance period.
Performance rights granted to KMP in 2019 under the FY20 LTI reached their vesting date during FY23. Of these,
nil performance rights granted to KMP vested and 404,410 unvested performance rights lapsed in accordance
with the IVE Group Equity Incentive Plan rules as set out below:
Total LTI
Grant FY20
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
147,058
147,058
110,294
N/A
88,235
88,235
66,176
N/A
58,823
58,823
44,118
N/A
404,410
242,646
161,764
—
—
—
N/A
—
147,058
147,058
110,294
N/A
404,410
60 | IVE Group Limited Annual Report 2023
The relevant performance conditions were as follows:
60% of Performance Share Rights
Earnings Per Share Target (EPS)
EPS Target 7.75%
Performance
Share Rights
Less than 90% of
target achieved
90–99% of target
achieved
Target achieved or
exceeded
Nil
80%
100%
40% of Performance Share Rights
Relative Total Shareholder Return (TSR)
Granted
Vested
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 FY20 to FY22 was less than
90% of the EPS Target. Accordingly, none of the EPS tranche of performance rights vested.
IVE Group was ranked as 14 (43.48th percentile) compared to the relevant FY20 LTI peer group as at
30 June 2022. Accordingly, none of the TSR tranche of performance rights vested.
Key financial metrics over the last five years are shown below:
Revenue ($m)
EBITDA ($m)
Net profit after tax ($m)
Dividend payment
(cents per share)
Dividend payout ratio3
Share price change ($)4
NPAT EPS (cents)
NPATA EPS (cents)
FY191
FY202
FY21
FY22 Pre
AASB 16
FY22
Post
AASB 16
723.6
677.4
656.7
759.0
759.0
82.0
33.0
16.3
71%
(0.23)
22.8
25.3
57.3
18.5
0.0
0%
59.3
19.9
14.0
67%
(1.26)
+0.655
12.5
15.2
13.5
16.2
75.1
33.4
16.5
72%
+0.28
23.1
25.4
96.6
33.1
16.5
72%
+0.28
23.1
25.4
FY23
967.4
119.0
39.7
18.0
69%
+0.58
26.4
28.5
The above results are prepared on an underlying continuing business basis, pre-AASB 16 for FY19 to FY22, FY22 and FY23
are 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. FY19 revenue, EBITDA, NPAT and EPS have not been adjusted for TeleFundraising divestment in FY21.
2. FY20 revenue, EBITDA and NPAT have been updated on a continuing business basis i.e. excluding TeleFundraising for FY21
comparative purposes.
3. FY21 dividend payout ratio is based on underlying NPAT including JobKeeper.
4. Calculated as close price on 30 June for the applicable year.
61
Directors’ Report
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 30 November 2022, offers were made granting 627,775 performance rights under the Senior Leadership
Team Plan. Of these, 111,111 were granted to Geoff Selig for which approval for the issue was obtained under
ASX Listing Rule 10.14 at the 2022 Annual General Meeting. These Rights vest following the release of the FY25
financial results if specified performance conditions are met during the Performance Period which is
1 July 2022 to 30 June 2025.
In total there were 3,419,947 unvested Rights at 30 June 2023 from the FY21, FY22 and FY23 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
FY22 and FY23 are as follows:
Feature
Terms of the IVE Group Equity Incentive Plan
Type of security
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.
Valuation
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 (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 FY23 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.
62 | IVE Group Limited Annual Report 2023
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.
TSR Peer Group for FY23 Offer
Due to changes in the market and the lack of material numbers of useful comparator companies, the peer
group chosen for the FY23 grant are the companies who are included in the ASX Small Ordinaries Index at the
commencement of the performance period, being 1 July 2022.
Non-Executive Director remuneration framework
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 considers
market levels, the need to attract high quality Directors and the size and complexity of the Company.
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 Chair or a 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.
63
Directors’ Report
During FY23, Board remuneration increased by $5,000 per Non-Executive Director. This follows unchanged
remuneration in FY21 and FY22 and a temporary fee reduction of 50% applying to the three months ended
30 June 2020, as a result of COVID-19. No further increase in Non-Executive Director remuneration has been
approved for FY24.
The annual fees provided to Non-Executive Directors for FY23 are shown below (inclusive of superannuation):
Chair fee
Non-Executive Director fee (effective since 1 July 2022)
N/A as Executive Chairman
$110,000
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 FY23 was $550,000, being 55% of the approved fee pool. There is no intent to
seek approval to increase the Non-Executive Director fee pool at the 2023 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 KMP
Remuneration and other conditions of employment are set out in the Executive KMP's 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:
Termination:
Annual remuneration includes cash salary, superannuation and non-cash
benefits 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
64 | IVE Group Limited Annual Report 2023
Name:
Title:
Paul Selig
Executive Director
Terms of Agreement:
No fixed term – subject to termination provisions detailed below
Details:
Termination:
Annual remuneration includes cash salary, superannuation and non-cash benefits
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:
Termination:
Annual remuneration includes cash salary, superannuation and non-cash benefits
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
No fixed term – subject to termination provisions detailed below
Terms of Agreement:
Annual remuneration includes cash salary, superannuation and non-cash benefits
Details:
Incentives – eligible to participate in short-term incentive and equity remuneration plans
Termination:
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
65
Directors’ Report
Details of remuneration for KMP
The table below provides remuneration prepared on a statutory basis for Directors and Executive KMP
for the year ended 30 June 2023 (except as noted below).
Fixed Remuneration
Variable
Remuneration
Name
Year
Cash,
salary
and fees1
Super-
annuation
Other
long-term
benefits
Short-
term
incentive
Fair value
of LTI
award2
Total
Total
performance
related
Percentage
performance
related
Executive Directors
Geoff
Selig
2023 926,707
25,293
- 196,400 301,631
1,450,031
498,031
34.3%
2022 928,432
23,568
15,505 200,000
63,263 1,230,768
263,263
Paul
Selig
2023 304,708
25,292
2022 306,432
23,568
Non-Executive Directors
Gavin
Bell
2023 110,000
2022 105,000
-
-
Sandra
Hook
James
Todd
Cathy
Aston
Andrew
Bird1
2023
99,548
10,452
2022
95,455
9,546
2023
99,548
10,452
2022
95,455
9,546
2023
99,548
10,452
2022
95,455
9,546
2023
99,548
10,452
2022
23,864
2,386
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
330,000
330,000
-
-
-
-
-
-
-
-
-
-
110,000
105,000
110,000
105,000
110,000
105,000
110,000
105,000
110,000
26,250
-
-
-
-
-
-
-
-
-
-
-
-
Other Executive KMP
Matt
Aitken
2023 674,708
25,293
- 294,600 301,631 1,296,232
596,231
2022 617,242
23,568
10,273 300,000
63,263 1,014,346
363,263
2023 503,698
25,293
- 180,000 226,223
935,214
406,223
Darren
Dunkley
2022 426,915
23,568
8,244 180,000
45,367
684,094
225,367
1. Cash, salary and fees includes annual leave and long service leave.
2. Fair value of LTI award reflects accounting impacts during period, nil shares vested/paid.
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
46.0%
35.8%
43.4%
32.9%
66 | IVE Group Limited Annual Report 2023
Rights granted to Executive KMP
FY23
KMP
Geoff
Selig
Number of
rights granted
in FY23
111,111
Matt
Aitken
111,111
Darren
Dunkley
83,333
FY22
KMP
Geoff
Selig
Number of
rights granted
in FY22
168,067
Matt
Aitken
168,067
Darren
Dunkley
126,050
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
16 December
2022
$200,000
16 December
2022
$200,000
16 December
2022
$150,000
After vesting
following release
of FY25
financial results
Any unvested
Rights expire
After vesting
following release
of FY25
financial results
Any unvested
Rights expire
After vesting
following release
of FY25
financial results
Any unvested
Rights expire
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
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
67
Directors’ Report
FY21
KMP
Geoff
Selig
Number of
rights granted
in FY21
384,615
Matt
Aitken
384,615
Darren
Dunkley
288,461
FY20
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
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
The vesting period for the performance rights granted to KMP under the FY20 LTI ended during FY23. Of these, nil
performance rights vested and 404,410 unvested performance rights lapsed in accordance with the IVE Group
Equity Incentive Plan rules.
KMP
Geoff
Selig
Matt
Aitken
Number of
rights granted
in FY20
147,058
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
147,058
unvested
performance
rights lapsed on
25 August 2022
147,058
unvested
performance
rights lapsed on
25 August 2022
110,294
unvested
performance
rights lapsed on
25 August 2022
In total there were 3,419,947 unvested Rights at 30 June 2023 relating to KMP.
68 | IVE Group Limited Annual Report 2023
Director and Executive KMP shareholdings
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 2023
Balance at
30 June 2022
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 Bird
Executive KMP
Darren Dunkley,
CFO and Company
Secretary
Matt Aitken, Chief
Executive Officer
122,697
12,919
122,336
5,000
379,701
27,770
7,532
-
-
-
-
-
-
-
-
-
-
-
-
8,889
-
2,223
27,352
-
-
(4,500,000)
8,367,263
(4,500,000)
8,410,231
-
-
-
-
-
-
-
122,697
21,808
122,336
7,223
407,053
27,770
7,532
1. Geoff Selig and Paul Selig are each beneficiaries of the Selig Family Trust No. 5, the trustee of which holds 8,360,231 shares.
Loans to directors and executives
No loans were made to directors and executives of IVE Group Limited including their close family and entities
related to them during the year.
Shares under option
There were no unissued ordinary shares of IVE Group Limited under option outstanding at the date of this
report. Shares under performance rights There were no unissued ordinary shares of IVE Group Limited under
Rights outstanding at the date of this report.
Shares issued on the exercise of options
There were no ordinary shares of IVE Group Limited issued on the exercise of options during the year ended
30 June 2023 and up to 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.
69
Lead auditor’s independence
declaration
The Lead auditor’s independence declaration is
set out on page 71 and forms part of the directors’
report for the financial year ended 30 June 2023.
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 off 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 24th day of August 2023
Directors’ Report
Non-audit services
During the year the Group's auditor, KPMG, has not
performed other services in addition to its statutory
duties. The Board would normally considered the
non-audit services provided during the year by
the auditor, and, in accordance with the advice
received from the Audit Committee, would satisfy
themselves 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 34 of the
Financial Report.
70 | IVE Group Limited Annual Report 2023
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 2023 there have been:
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.
i.
ii.
PM_INI_01
PAR_SIG_01
PAR_NAM_01
PAR_POS_01
PAR_DAT_01
PAR_CIT_01
KPMG
Daniel Camilleri
Partner
Sydney
24 August 2023
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.
71
Financial
report
for the year ended 30 June 2023
idea
72 | IVE Group Limited Annual Report 2023
execution
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. Assets held for sale
14. Property, plant and equipment
15. Leases
16. Intangible assets and goodwill
17. Other assets
18. Trade and other payables
19. Loans and borrowings
20. Employee benefits
78
78
79
88
88
88
89
89
89
92
93
93
93
94
95
97
98
99
99
99
21. Provisions
22. Other liabilities
23. Share-based payments
24. Capital and reserves
25. Earnings per share
26. Acquisitions
27. Operating segments
28. Financial risk management and
financial instruments
29. Capital commitments
30. Related parties
31. Group entities
32. Parent entity disclosures
33. Subsequent events
34. Auditors’ remuneration
35. Deed of cross guarantee
Directors’ declaration
Independent auditor’s report
ASX additional information
74
75
76
77
100
100
101
102
103
104
105
105
110
110
111
112
112
113
113
116
117
122
73
The notes on pages 78 to 115 are an integral part of these consolidated financial statements. Financial Report
Consolidated statement of profit or loss and other
comprehensive income
For the year ended 30 June 2023
In thousands of AUD
Note
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
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)
4
5
8
9
25
25
2023
970,212
(532,804)
437,408
2,843
(222,882)
(148,931)
(30,779)
37,650
460
(13,767)
(13,707)
24,343
(7,195)
17,148
(274)
369
(73)
22
2022
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
317
134
477
17,170
27,409
17,148
17,148
17,170
17,170
0.11
0.11
26,932
26,932
27,409
27,409
0.19
0.19
74 | IVE Group Limited Annual Report 2023
The notes on pages 78 to 115 are an integral part of these consolidated financial statements. Consolidated statement of financial position
As at 30 June 2023
In thousands of AUD
Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Assets held for sale
Current tax receivable
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
Provisions
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
Note
2023
2022
10
11
12
13
17
9
11
14
15
16
17
18
19
20
21
22
19
20
21
22
24
24
44,860
137,243
98,724
5,151
1,056
1,154
4,211
292,399
22,037
160
106,983
122,195
130,786
718
382,879
675,278
118,864
36,683
3,608
30,989
-
6,476
10,907
207,527
157,236
102,395
7,672
6,720
170
274,193
481,720
193,558
167,664
2,789
23,105
193,558
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
75
The notes on pages 78 to 115 are an integral part of these consolidated financial statements. Financial Report
Consolidated statement of changes in equity
for the year ended 30 June 2023
In thousands of AUD
Note
Share
capital
Share-
based
payment
reserve
Reserves
Retained
earnings
Total
equity
Balance at 1 July 2021
149,066
463
(648)
27,146
176,027
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
Balance at 30 June 2022
Balance at 1 July 2022
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
Proceeds from share issue
(net of transaction costs and tax)
Dividends to owners of the Company
Total transactions with owners of
the Company
23
23
24
24
23
23
24
24
-
-
-
-
-
(188)
-
-
-
-
297
1,218
-
-
(188)
1,515
-
26,932
26,932
477
477
-
477
26,932
27,409
-
-
-
-
-
-
-
-
297
1,218
(188)
(22,191)
(22,191)
(22,191)
(20,864)
148,878
148,878
1,978
1,978
(171)
31,887
182,572
(171)
31,887
182,572
-
-
-
-
-
18,786
-
-
-
-
960
-
-
-
18,786
960
-
22
22
-
-
-
-
-
17,148
17,148
-
22
17,148
17,170
-
-
-
960
-
18,786
(25,930)
(25,930)
(25,930)
(6,184)
Balance at 30 June 2023
167,664
2,938
(149)
23,105
193,558
76 | IVE Group Limited Annual Report 2023
The notes on pages 78 to 115 are an integral part of these consolidated financial statements. Consolidated statement of cash flows
for the year ended 30 June 2023
In thousands of AUD
Note
2023
2022
10
26
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
Payment of restructure costs
Net cash from operating activities
Cash flows from investing activities
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of assets held for sale
Acquisition of property, plant and equipment and
intangible assets
Acquisitions of businesses (net of cash and
transactions costs)
Payment for contingent consideration
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
Proceeds from issue of share capital
(net of transaction costs)
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
1,050,451
(980,557)
69,894
460
(7,079)
(14,844)
(25,203)
23,228
380
2,135
825,845
(734,911)
90,934
56
(3,215)
(11,821)
(4,278)
71,676
263
-
(11,367)
(15,743)
(15,730)
(893)
(25,475)
30,000
(3,926)
(378)
(25,930)
(38,323)
18,557
-
(20,000)
(22,247)
72
67,035
44,860
(4,960)
-
(20,440)
15,000
(53,336)
(820)
(22,191)
(29,081)
-
(188)
(90,616)
(39,380)
(59)
106,474
67,035
77
The notes on pages 78 to 115 are an integral part of these consolidated financial statements. Financial Report
Notes to the consolidated financial statements
For the year ended 30 June 2023
The consolidated financial statements were
authorised for issue by the Board of Directors on
24 August 2023. Details of the Group’s accounting
policies is included in Note 3.
(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 2022.
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;
> Note 3(k) – provisions
> Note 28 – Level 2 and 3 fair values of equity
securities, and forward exchange contracts; and
> Note 15 – lease term: whether the Group is
reasonably certain to exercise extension options.
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 2023 comprises the Company
and its subsidiaries (IVE or Group).
The Group is a for-profit entity. The Group is primary
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.
2. Basis of preparation
(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).
78 | IVE Group Limited Annual Report 2023
(ii) Assumptions and estimation uncertainties
Information about assumptions and estimation
uncertainties that have a significant risk of resulting
in a material adjustment within the next financial
year is included in the following notes:
> Note 3(i)(ii) & 16 – impairment testing for cash
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.
generating units containing goodwill
(ii) Subsidiaries
> Note 26 – acquisitions: fair value measured on a
provisional basis; and
> Note 28 – 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 (i.e. as prices) or indirectly
(i.e. 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
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.
79
Financial Report
3. Significant accounting policies (continued)
(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).
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:
> It is held within a business model whose objective
is to hold assets to collect contractual cash
flows; and
> 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.
80 | IVE Group Limited Annual Report 2023
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-
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.
(iii) Derecognition
Financial assets
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.
Notes to the consolidated financial statements – continued (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.
(v) Derivative financial instruments and hedge
accounting
Derivative financial instruments and hedge
accounting
The Group may hold 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 costs 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
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
81
Financial Report
3. Significant accounting policies (continued)
(ii) Other intangible assets
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.
(ii) Subsequent costs
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.
(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 assets
> plant and equipment
3–20 years
> fixtures and fitting
5–10 years
> building
40 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.
82 | IVE Group Limited Annual Report 2023
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.
(iv) Amortisation
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.
The estimated useful lives are as follows:
> computer software
3–5 years
> customer relationships
5–9 years
Amortisation methods, useful lives and residual
values are reviewed at each reporting date and
adjusted if appropriate.
(g) Assets held for sale
Non-current assets, or disposal groups comprising
assets and liabilities, are classified as held for sale
if it is highly probable that they will be recovered
primarily through sale rather than through
continuing use.
Such assets, or disposal groups, are generally
measured at the lower of their carrying amount and
fair value less costs to sell. Any impairment loss on
a disposal group is allocated first to goodwill, and
then to the remaining assets and liabilities on a
pro rata basis, except that no loss is allocated to
inventories, financial assets, deferred tax assets,
employee benefit assets, investment property or
biological assets, which continue to be measured
in accordance with the Group’s other accounting
policies. Impairment losses on initial classification as
held-for-sale or held-for distribution and subsequent
gains and losses on remeasurement are recognised in
profit or loss.
Once classified as held-for-sale, intangible assets and
property, plant and equipment are no longer amortised
or depreciated, and any equity-accounted investee is
no longer equity accounted.
Notes to the consolidated financial statements – continued
(h) Inventories
Credit-impaired financial assets
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.
(i) 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.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit
losses. Credit losses are measured as the present
values of all cash shortfalls (i.e. 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.
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.
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.
83
Financial Report
3. Significant accounting policies (continued)
(iii) Short‑term employee benefits
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.
(j) 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.
84 | IVE Group Limited Annual Report 2023
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.
(k) 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.
(i) 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 to
those affected. Future operating losses are not
provided for.
(ii) 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.
Notes to the consolidated financial statements – continued (l) Revenue from contracts with customers
Revenue is measured based on the consideration
specified in a contract with a customer. The Group
recognises revenue at a point in time or over-time.
Recognition 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.
Recognition of revenue over‑time
Revenue is recognised on the rendering of 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.
Contract asset
The contract assets primarily relate to the Group’s
rights to consideration for work completed but
not billed at the reporting date or upfront agreed
expenditure incremental to obtaining the contract.
The contract assets are transferred to receivables
when the rights become unconditional, or the
expenditure is amortised over the contract term
as an expense or deducted from other revenue if it
is a discount.
Contract liabilities
The contract liabilities primarily relate to the
advance consideration received from customers,
for which revenue is recognised at a point in time or
over time.
(m) 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
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.
85
Financial Report
3. Significant accounting policies (continued)
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.
Short-term leases and leases of low-value assets
The Group has elected 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.
86 | IVE Group Limited Annual Report 2023
If an arrangement contains lease and non-lease
components, then the Group applies AASB 15 to
allocate the consideration in the contract.
(n) 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.
(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.
Notes to the consolidated financial statements – continued 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) Good 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
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. The adoption of these
standards and interpretations has not resulted
in any material changes to the Group’s year-end
financial report.
(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.
87
Financial Report
4. Revenue
The Group’s operations and main revenue streams are those described in Note 3(l). 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
2023
914,148
56,064
970,212
2022
707,057
51,919
758,976
2023
2022
135,371
116,742
3,025
9,885
3,491
13,888
The majority of contract liabilities of $13,888 thousand as at 30 June 2022 have been recognised as revenue in
the year ending 30 June 2023. The majority of contract liabilities of $9,885 thousand as at 30 June 2023 will be
recognised as revenue during the year ending 30 June 2024.
5. Other income
In thousands of AUD
Other income
2023
2,843
2022
3,014
During the year ended 30 June 2023, the Group agreed a refund of purchase consideration of $2,736 thousand
from the administrators of Ovato. (Refer Note 26 for details on the acquisition).
6. Personnel expenses
In thousands of AUD
Wages and salaries
Contributions to defined contribution plans
Share-based payment expense
2023
224,182
17,428
960
242,570
2022
184,180
13,806
1,540
199,526
88 | IVE Group Limited Annual Report 2023
Notes to the consolidated financial statements – continued 7. Expenses
Included in the consolidated statement of profit or loss and other comprehensive income:
In thousands of AUD
Depreciation, amortisation, and impairment
Acquisition and transaction costs
Restructuring costs
Make good expenses
Software for service
Loss on disposal of assets held for sale,
and plant and equipment
8. Net finance costs
In thousands of AUD
Interest income
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
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
2023
52,925
3,013
20,108
165
1,369
1,904
2023
460
460
(13,766)
-
(1)
-
(13,767)
(13,307)
2022
41,984
741
4,278
711
1,701
746
2022
56
56
(7,420)
(1,762)
(24)
(12)
(9,218)
(9,162)
2023
2022
7,804
154
7,958
(763)
7,195
14,350
(82)
14,268
(1,850)
12,418
89
Financial Report
9. Taxes (continued)
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)
2023
24,343
7,303
(289)
154
28
7,195
2022
39,350
11,805
693
(82)
2
12,418
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
In thousands of AUD
Assets
Liabilities
Net
2023
2022
2023
(2,302)
2022
(307)
2023
(2,302)
2022
(307)
Property, plant and equipment
Right-of-use assets
Inventories
Intangible assets
Lease liabilities
Employee benefits
Provisions
Other items
-
-
16
-
-
-
-
-
39,599
34,775
13,538
11,056
4,975
316
2,881
957
(31,670)
(26,895)
(31,670)
(26,895)
-
(1,723)
16
(2,435)
(3,593)
(2,435)
(1,723)
(3,593)
-
-
-
-
-
-
-
-
39,599
34,775
13,538
11,056
4,975
316
2,881
957
Tax assets/(liabilities)
58,444
49,669
(36,407)
(32,518)
22,037
17,151
Set off of tax
(36,407)
(32,518)
36,407
32,518
-
-
Net deferred tax assets
22,037
17,151
-
-
22,037
17,151
90 | IVE Group Limited Annual Report 2023
Notes to the consolidated financial statements – continued 9. Taxes (continued)
Movement in temporary differences during the year
2023
In thousands of AUD
Balance
1 July 2022
Acquisition
through
business
combination
Recognised
in equity
Recognised in
profit
or loss
Balance
30 June
2023
Property, plant and equipment
(307)
(2,521)
Right-of-use assets
Inventories
Intangible assets
Lease Liabilities
Employee benefits
Provisions
Other items
2022
In thousands of AUD
Property, plant and equipment
Right-of-use assets
Inventories
Intangible assets
Lease Liabilities
Employee benefits
Provisions
Other items
(26,895)
(1,723)
(3,593)
34,775
11,056
2,882
956
-
-
-
-
2,692
3,757
-
17,151
3,928
-
-
-
-
-
-
-
195
195
526
(2,302)
(4,775)
(31,670)
1,739
1,158
4,824
16
(2,435)
39,599
(210)
13,538
(1,663)
4,975
(837)
316
763
22,037
Balance
1 July 2021
Acquisition
through
business
combination
Recognised
in equity
Recognised in
profit
or loss
Balance
30 June
2022
(484)
(23,440)
(1,342)
(4,341)
32,061
9,148
2,371
1,260
15,233
-
-
61
(780)
-
874
65
-
220
-
-
-
-
-
-
-
(152)
(152)
177
(307)
(3,455)
(26,895)
(442)
1,528
2,714
1,034
446
(152)
(1,723)
(3,593)
34,775
11,056
2,882
956
1,850
17,151
The gross amount of capital losses for which no deferred tax asset is recognised is nil (2022: nil).
91
Financial Report
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
In thousands of AUD
Profit from continuing 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
Net other income and expenses
Loss on disposal of assets held for sale, and
plant and equipment
Cash items
Acquisition costs 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
92 | IVE Group Limited Annual Report 2023
2023
44,855
5
44,860
2023
17,148
52,925
960
-
6,687
-
7,195
(196)
1,904
2,730
89,353
(19,616)
(18,566)
2,740
338
(10,089)
(6,088)
38,072
(14,844)
23,228
2022
67,029
6
67,035
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
Notes to the consolidated financial statements – continued 11. Trade and other receivables
In thousands of AUD
Current
Trade receivables
Allowance for impairment
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
2023
2022
135,371
(2,180)
133,191
4,052
137,243
116,742
(3,124)
113,618
163
113,781
160
307
2023
6,764
16,094
76,546
99,404
(680)
98,724
2022*
5,753
16,943
52,982
75,678
(1,514)
74,164
*The comparatives for finished goods, work in progress and the allowance for inventory obsolescence have been restated to align
with current period presentation. There is no impact of this restatement on total inventory.
During the year, raw materials, consumables and changes in finished goods and work in progress recognised
as cost of sales amounted to $532,804 thousand (2022: $405,276 thousand).
During 2023 financial year an analysis of aged inventory and previous write-offs was performed which
resulted in a net decrease in provision amounting to $834 thousand (2022: net increase of $708 thousand).
13. Assets held for sale
In thousands of AUD
Opening balance 1 July 2022
Acquisitions through business combination
Net Transfer from plant and equipment
Disposals
Impairment
Closing balance 30 June 2023
2023
-
4,167
3,087
(1,979)
(4,219)
1,056
Assets held for sale include plant and equipment acquired through the Ovato acquisition (refer Note 26).
93
Financial Report
14. 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 2021
21,897
150,066
1,307
2,000
2,321
177,591
Acquisitions through business
combination
Additions
Disposals
-
2,772
3,255
(1,246)
8,188
(319)
Balance at 30 June 2022
23,906
160,707
Balance at 1 July 2022
23,906
160,707
-
486
-
1,793
1,793
-
-
-
-
2,772
328
12,257
-
(1,565)
2,000
2,000
2,649
191,055
2,649
191,055
Acquisitions through business
combination
Additions
Disposals
Net Transfers to assets held
for sale
-
17,737
-
-
17,737
5,973
4,912
292
(4,208)
(11,995)
-
(3,357)
-
-
350
11,527
(580)
(16,783)
-
(3,357)
Balance at 30 June 2023
25,671
168,004
2,085
2,000
2,419
200,179
Depreciation and
impairment losses
Balance at 1 July 2021
Depreciation for the year
Disposals
Balance at 30 June 2022
Balance at 1 July 2022
8,939
67,457
1,869
12,092
(497)
(133)
10,311
79,416
10,311
79,416
Depreciation for the year
2,517
12,619
Disposals
(4,177)
(8,137)
Transfers to assets held for sale
-
(270)
Balance at 30 June 2023
8,651
83,628
-
-
-
-
-
-
-
-
-
-
25
-
25
25
25
-
-
50
1,073
77,469
142
14,128
-
(630)
1,215
90,967
1,215
90,967
168
15,329
(516)
(12,830)
-
(270)
867
93,196
Carrying amounts
At 1 July 2022
At 30 June 2023
Security
13,595
81,291
17,020
84,376
1,793
2,085
1,975
1,950
1,434
100,088
1,552
106,983
At 30 June 2023 the carrying amount of total assets less the written down value of finance leased assets were
held as security for bank facilities.
94 | IVE Group Limited Annual Report 2023
Notes to the consolidated financial statements – continued
15. 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 lease is presented below.
(i) Right‑of‑use assets
The carrying amounts of right-of-use assets are as below.
In thousands of AUD
Property, plant and equipment
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
Balance as at 1 July 2022
Depreciation charge for the year
Acquisitions through business combination
Additions/modifications to right-of-use assets
Disposals of right-of–use assets
Property
76,546
(18,003)
596
31,202
(718)
89,623
89,623
(22,984)
6,773
32,352
(1,930)
Production
equipment
19,682
(3,417)
-
29
-
16,294
16,294
(3,751)
-
5,818
-
Total
96,228
(21,420)
596
31,231
(718)
105,917
105,917
(26,735)
6,773
38,170
(1,930)
Balance as at 30 June 2023
103,834
18,361
122,195
(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
2023
6,349
1,042
925
494
2022
3,798
136
228
690
95
Financial Report
15. Leases (continued)
(iii) Amounts recognised in statement of cash flows
In thousands of AUD
Total cash outflow for leases
(iv) Extension options
2023
38,323
2022
29,081
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 $34 thousand interest income on lease receivables (2022: $12 thousand).
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
2023
1,453
1,610
(20)
1,590
2022
163
490
(20)
470
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 $73 thousand (2022: $137 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
2023
75
178
-
253
2022
68
159
-
227
96 | IVE Group Limited Annual Report 2023
Notes to the consolidated financial statements – continued 16. Intangible assets and goodwill
In thousands of AUD
Note
Goodwill
Computer
software
Capital
work in
progress
Customer
relationships
Total
Cost
Balance at 1 July 2021
146,694
21,027
528
35,154
203,403
Acquisition
Disposal
Transfer to/(from) computer software
Other additions
Balance at 30 June 2022
Balance at 1 July 2022
Acquisition
Disposal
Other additions
Transfer to/(from) computer software
684
-
-
-
147,378
147,378
2,670
-
-
-
229
(74)
265
1,159
22,606
22,606
-
(601)
374
6,041
-
-
(265)
4,952
5,216
5,216
-
-
1,091
(6,041)
2,600
3,513
-
-
-
(74)
-
6,111
37,754
212,953
37,754
212,953
-
-
-
-
2,670
(601)
1,465
-
Balance at 30 June 2023
150,048
28,420
266
37,754
216,487
Amortisation and impairment losses
Balance at 1 July 2021
Amortisation for the year
Balance at 30 June 2022
Balance at 1 July 2022
Amortisation for the year
Disposals
40,000
13,710
-
40,000
40,000
-
-
3,046
16,756
16,756
3,607
(601)
Balance at 30 June 2023
40,000
19,762
-
-
-
-
-
-
-
19,515
73,225
3,390
22,905
22,905
3,035
-
6,436
79,661
79,661
6,642
(601)
25,940
85,702
Carrying amounts
At 1 July 2022
At 30 June 2023
107,378
110,048
5,850
8,658
5,216
266
14,849
133,293
11,814
130,786
No impairment losses in relation to goodwill have been recognised in the year ended 30 June 2023 (2022 nil).
97
Financial Report
Notes to the consolidated financial statements – continued
16. Intangible assets and goodwill (continued)
Impairment testing for cash-generating units containing goodwill
The Group performed a detailed reassessment of its CGUs, and determined that the Ovato acquisition and
integration resulted in increasingly interdependent cash inflows across the large format web offset printing
and distribution businesses (Print Web Offset including distribution). Prior to combining those CGUs, the Group
performed impairment testing for the eight CGUs same as prior year. Goodwill is now allocated to six CGUs.
The individual CGUs within the ‘Production (group of CGUs)’ are not individually significant and have 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
Print Web Offset including distribution
Data-Driven Communications
Production (group of CGUs)
2023
41,592
38,506
29,950
2022
38,922
38,506
29,950
110,048
107,378
Goodwill impairment testing is performed by applying value in use calculations. The calculations for all CGUs
use nominal 5 year cash flow projections based on FY24 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 EBITDA projections of each CGU.
The WACC and growth rates are:
Print Web Offset including distribution
Data-Driven Communications
Production (group of CGUs)
WACC rate
(pre-tax nominal)
11.5% (2022:11.8%)
12.7% (2022:15.4%)
11.8% to 12.6%
(2022: 12.1% to 13.7%)
Growth rate
1% (2022:1%)
2% (2022:2%)
1% to 2%
(2022:1% to 2%)
There are no reasonable possible changes in assumptions that would give rise to impairment.
17. Other assets
In thousands of AUD
Current
Contract assets
Other assets
Non-current
Contract assets
98 | IVE Group Limited Annual Report 2023
2023
2022
3,025
1,186
4,211
718
718
3,491
1,147
4,638
2,554
2,554
18. Trade and other payables
In thousands of AUD
Current
Trade payables
Accrued expenses
19. Loans and borrowings
In thousands of AUD
Current
Equipment finance
Non-current
Bank loan
Equipment finance
Bank loan
2023
2022
85,360
33,504
118,864
88,717
35,656
124,373
2023
2022
3,608
3,764
154,061
3,175
157,236
124,214
5,987
130,201
As at 30 June 2023, the amended Syndicated Facilities Agreement has a carrying amount of $154,061
thousand and face value of $155,000 thousand (2022: carrying amount of $124,214 thousand and face value
of $125,000 thousand). These facilities are 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 2023.
20. Employee benefits
In thousands of AUD
Current
Liability for long service leave
Liability for annual leave
Non-current
Liability for long service leave
2023
2022
15,164
15,825
30,989
7,672
38,661
11,499
12,912
24,411
6,714
31,125
99
Financial Report
21. Provisions
In thousands of AUD
Balance at 1 July 2022
Assumed in business in combination
Provisions made during the year
Provisions utilised during the year
Unwind of discount
Balance at 30 June 2023
Current
Non-current
Refer to Note 3(k) on the nature of the provision.
22. 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
Restructure
Make good
-
10,923
-
(5,096)
-
5,827
5,827
-
5,827
5,376
1,600
288
(109)
214
7,369
649
6,720
7,369
Total
5,376
12,523
288
(5,205)
214
13,196
6,476
6,720
13,196
2023
2022
9,885
744
278
10,907
-
170
170
13,888
1,063
398
15,349
575
636
1,211
100 | IVE Group Limited Annual Report 2023
Notes to the consolidated financial statements – continued 23. Share-based payments
During the year ended 30 June 2023, 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
22 November 2022
627,775
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 2022 to 30 June 2025
inclusive. The vesting date is expected to be on or soon after the
approval of IVE’s 2025 Annual Financial Report.
Weighted average fair value
$1.80
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
$2.3174
Expected volatility
Risk-free interest rate
Dividend yield
46%
3.62%
7.20%
* Share rights issued to Directors required shareholder approval. This occurred at the Group’s 2022 Annual General Meeting.
During the year, 711,808 Rights were granted (2022: 823,526), 647,056 lapsed (2022: 529,407), and 3,419,947
remain outstanding (2022: 3,355,195). The total expense relating to the Rights granted was $960 thousand (for
the year ended 30 June 2022: $298 thousand).
These expenses are included in Note 6 of the consolidated financial statements.
101
Financial Report
24. Capital and reserves
Issued and paid up capital (In thousands of AUD)
2023
2022
152,096,028 (June 2022: 143,508,948) ordinary shares fully paid
167,664
148,878
Movement in ordinary share capital
Date
Details
1-Jul-21
Opening balance
1-Jul-21
Share buyback (including
transaction costs)
23-Sep-21
Employee share issue
30-Jun-22
Closing balance
1-Jul-22
Opening balance
28-Sep-22
17-Oct-22
Institutional placement
(including transaction
costs net of tax)
Share purchase plan
(including transaction
costs net of tax)
Number of
shares
142,756,952
-
751,996
143,508,948
143,508,948
Issue
price
Total $’000
-
-
-
-
-
149,066
(188)
-
148,878
148,878
8,000,000
2.25
17,485
587,080
2.25
1,301
30-Jun-23
Closing balance
152,096,028
167,664
Dividends
On 24 August 2023, the directors have declared a fully franked dividend of 8.5 cents per share to be paid on
12 October 2023 to shareholders on the register at 14 September 2023. The final dividend payout is $12,928
thousand (2022: $11,481 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 2023:
In thousands of AUD
Cents per share
Total amount
2023
Final 2022 ordinary
Interim 2023 ordinary
Total amount
8.0
9.5
11,481
14,449
25,930
Date of
payment
13 October 2022
13 April 2023
102 | IVE Group Limited Annual Report 2023
Notes to the consolidated financial statements – continued On 13 October 2022 a dividend of 8.0 cents per share (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 13 April 2023 a further dividend of 9.5 cents per share (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.
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
Dividend franking account
In thousands of AUD
Amount of franking credits available to shareholders
of IVE Group Limited for subsequent financial years
7.0
8.5
9,993
12,198
22,191
14 October 2021
14 April 2022
2023
20,337
2022
18,310
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.
25. Earnings per share
In dollars
Basic earnings per share
Diluted earnings per share
In thousands
Earnings
2023
0.11
0.11
2022
0.19
0.19
Profit after income tax attributable to owners of the company used in
calculating basic and diluted earnings per share
17,148
26,932
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
149,972
143,336
153,060
145,057
103
Financial Report
26. Acquisitions
On 13 September 2022, IVE acquired selected assets and assumed selected liabilities of Ovato Limited’s (Ovato)
heatset web print business. The acquired business is being integrated into IVE’s Print Web Offset business.
The following summarises the major classes of consideration attributable to the acquisition, and the final
recognised amounts of assets acquired and liabilities assumed at the acquisition date:
In thousands of AUD
Consideration transferred
Initial cash paid
Refundable consideration
Identifiable assets acquired and liabilities assumed
Inventories
Assets held for sale
Plant and equipment
Right-of-use asset
Deferred tax assets/(liabilities)
Employee benefits
Provisions
Lease Liability
Goodwill on acquisition
Total
13,000
-
13,000
5,994
4,167
17,737
6,773
3,927
(8,972)
(12,523)
(6,773)
10,330
2,670
Goodwill reflects the synergies and optimisation that is expected to result from integrating the Ovato assets
into the existing IVE business.
As agreed in the Asset Sale Agreement part of the consideration transferred may be refunded (Refundable
consideration). Management fair valued this amount to nil at the date of acquisition, as the funds available
to pay the refundable consideration would be determined by the Ovato administrators after the acquisition
date. Ovato administrators have now finalised the refundable consideration amount with $2,736 thousand
recognised as other income in Note 5 at 30 June 2023.
Management also measured the assets and liabilities acquired at fair value at acquisition date.
As this business is being integrated into IVE the revenue and profit before tax contribution has become
indistinguishable from existing business unit results. However, since acquisition the revenue and profit before
tax (underlying before acquisition and restructure costs) contribution best estimate is approximately $136,000
thousand and $5,800 thousand, respectively.
If this acquisition had occurred from beginning of the reporting period the combined Group revenue would have
been estimated at approximately $995,000 thousand. As prior to its acquisition Ovato was in administration, it
is impractical to determine profit or loss before tax for the full year.
Acquisition-related costs totalling $2,730 thousand has been included in Other expenses in the Group’s
consolidated statement of profit or loss and other comprehensive income.
104 | IVE Group Limited Annual Report 2023
Notes to the consolidated financial statements – continued 27. 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 (loss) before income tax
2023
90,575
(52,925)
(13,307)
24,343
2022
90,496
(41,984)
(9,162)
39,350
28. 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.
105
Financial Report
28. Financial risk management and financial instruments (continued)
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
Carrying amounts
Cash and cash equivalents
Trade receivables
Lease and other receivable
Contract assets
Note
10
11
11
17
2023
44,860
135,371
4,212
3,743
2022
67,035
116,742
470
6,045
188,186
190,292
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.
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
Carrying amounts
Neither past due nor impaired
Past due 1–30 days
Past due 31–90 days
Past due 91 days and over
2023
91,925
37,389
9,204
4,808
2022
76,952
28,973
10,485
6,848
143,326
123,257
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
106 | IVE Group Limited Annual Report 2023
2023
3,124
-
551
(1,495)
2,180
2022
2,008
34
1,257
(175)
3,124
Notes to the consolidated financial statements – continued Liquidity risk
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 2023 had undrawn facility of $35,000 thousand (2022: $35,000 thousand)
for general corporate and working capital purpose. The facility will mature on 6 May 2026.
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 2023
In thousands of AUD
Non-derivative financial liabilities
Contractual cash flows
Carrying
amount
Total
12 mths
or less
1–5
years
More than
5 years
Trade and other payable
118,864
118,864
118,864
-
-
Lease liabilities
Equipment finance
Bank loans
Derivative financial liabilities
Forward exchange contracts used
for hedging
139,078
172,240
36,683
83,842
51,715
6,783
7,908
154,061
179,842
3,608
8,785
4,082
171,057
218
-
418,786
478,854
167,940
258,981
51,933
440
440
440
440
278
278
170
170
-
-
30 June 2022
In thousands of AUD
Non-derivative financial liabilities
Contractual cash flows
Carrying
amount
Total
12 mths
or less
1–5
years
More than
5 years
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
6,687
137,101
-
-
383,054
422,642
164,771
230,953
26,918
1,034
1,034
1,034
1,034
398
398
636
636
-
-
107
Financial Report
28. Financial risk management and financial instruments (continued)
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.
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, 2% (2022: 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 has been designated as a cash flow hedge, and have
$30 thousand fair value at the reporting date (2022: $13 thousand). The Group has performed effectiveness
testing and recognised the full fair value amount net of deferred tax $21 thousand in other comprehensive
income (2022: $9 thousand). 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
As at 30 June 2023
As at 30 June 2022
Equipment finance loan
Next three months forecast purchases
Forward exchange contracts
Net exposure
Sensitivity analysis
Euro
5,364
606
(5,969)
-
NZD
-
532
(532)
-
Euro
8,808
392
(9,200)
-
USD
-
676
(676)
-
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 Annual Report 2023
Notes to the consolidated financial statements – continued 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 2023, no interest rate swap contracts were outstanding, hence $154,061 thousand of the
carrying amount of the bank loan is exposed to variable rates (2022: $124,214 thousand).
Exposure to interest 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
Financial liabilities – leases liabilities
Financial liabilities – equipment finance
Variable rate instruments
Financial assets – bank balances
Financial liabilities – bank loans
Financial liabilities – equipment finance
Carrying amounts
2023
2022
(139,078)
(124,716)
(2,139)
(2,623)
(141,217)
(127,339)
44,860
67,035
(154,061)
(124,214)
(4,644)
(113,845)
(7,128)
(64,307)
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss
therefore a change in interest rate at the reporting date would not affect 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 $115 thousand (2022: $65 thousand). This analysis assumes that all other variables, in particular
foreign currency rates, remain constant. The analysis is performed on the same basis as 2022.
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
Forward exchange
contracts (level 2)
Contingent
consideration
(level 3)
The fair value is
determined using quoted
forward exchange
rates and present value
of estimated future
cash flow based on
observable yield curves.
The fair value is
calculated based on
the acquired business
achieving future
revenue target.
Significant
unobservable
inputs
Relationship between the fair value
and unobservable inputs
Not applicable
Not applicable
Forecast revenue
growth
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 $0.1 million.
109
Financial Report
28. Financial risk management and financial instruments (continued)
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 19).
29. Capital commitments
As at 30 June 2023, the Group has $1,000 thousand commitment to purchase plant and equipment (2022:
$6,163 thousand).
30. 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
2023
2022
3,080,821
2,959,021
101,171
829,485
-
94,272
171,893
34,022
4,011,477
3,259,208
Related party transactions and outstanding balances
In AUD
Caxton Property Developments Pty Ltd – sales
Tamkin Pty Ltd– sales
Transaction value
year ended
30 June 2023
Transaction value
year ended
30 June 2022
-
2,327
5,885
-
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.
James Todd is the director and shareholder of Tamkin 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 2023, the Group sold goods and services to Tamkin 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.
110 | IVE Group Limited Annual Report 2023
Notes to the consolidated financial statements – continued 31. Group entities
Ultimate parent entity
IVE Group Limited
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
IVE Employment PW01 Pty Limited
IVE Employment PW02 Pty Limited
Ownership interest
2023
%
2022
%
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
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).
111
Financial Report
32. Parent entity disclosures
As at, and throughout, the financial year ending 30 June 2023 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
2023
2022
22
-
22
588
18,323
109
109
298,976
(145,444)
(135,318)
18,214
(1,220)
-
(1,220)
94
25,446
110
110
280,191
(147,880)
(109,411)
25,336
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.
33. Subsequent events
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 2023.
112 | IVE Group Limited Annual Report 2023
Notes to the consolidated financial statements – continued 34. 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
2023
2022
507,245
507,245
403,415
403,415
-
-
-
-
114,300
114,300
35. 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 23 January 2023. The subsidiaries
subject to the Deed are:
a. Caxton Print Group Holdings Pty Limited
k. AIW Printing (Aust) Pty Limited
b.
IVE Group Australia Pty Limited
l. SEMA Holdings Pty Limited
c.
IVE Group Victoria Pty Limited
m. SEMA Infrastructure Pty Limited
d. Caxton Print Group Pty Limited
n. SEMA Operations Pty Limited
e. Task 2 Pty Limited
o. John W. Gage & Co Pty Limited
f. Pareto Fundraising Pty Limited
p.
IVE Distribution Pty Limited
g. James Bennett & Associates Pty Limited
q. Lasoo Pty Limited
h.
IVE Employment (Australia) Pty Limited
r. AFI Branding Solutions Pty Limited
i.
IVE Employment (Victoria) Pty Limited
s.
IVE Employment PWO1 Pty Ltd
j. Taverners No. 13 Pty Limited
t.
IVE Employment PWO2 Pty Ltd
113
Financial Report
Notes to the consolidated financial statements – continued
35. Deed of cross guarantee (continued)
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 2023, are:
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2023
2023
942,351
(516,808)
425,543
2,834
(222,305)
(140,704)
(30,749)
34,619
459
(13,723)
(13,264)
21,355
(7,169)
14,186
95
14,282
30,790
14,186
(25,930)
19,046
2022
738,543
(393,655)
344,888
3,014
(171,684)
(120,813)
(7,705)
47,700
56
(9,218)
(9,162)
38,538
(12,417)
26,121
343
26,464
26,860
26,121
(22,191)
30,790
In thousands of AUD
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
Profit for the year
Cash flow hedges
Total other comprehensive income
Reconciliation of movement in retained earnings
Balance reported at 1 July
Profit for the year
Dividends to owners of the Company
Balance at 30 June
114 | IVE Group Limited Annual Report 2023
Consolidated statement of financial position
As at 30 June 2023
In thousands of AUD
Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Assets held for sale
Current tax receivable
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
Provisions
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
2023
2022
41,110
133,972
98,695
4,580
1,056
503
4,068
283,984
22,037
1,021
106,669
120,430
130,361
718
381,236
665,220
115,328
35,891
3,608
30,989
-
6,476
10,907
203,199
157,236
100,820
7,672
6,624
170
272,522
475,721
189,499
167,664
2,789
19,046
189,499
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
115
Financial Report
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 74 to 115, 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 2023 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.
There are reasonable grounds to believe that the Company and the Group entities identified in Note 31 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 35) pursuant to ASIC
Corporations (Wholly owned Companies) Instrument 2016/785.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from
the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2023.
The directors draw attention to Note 2 to the consolidated financial statements, which includes a
statement of compliance with International Financial Reporting Standards.
2
3
4
Signed in accordance with a resolution of directors.
Geoff Selig
Director
Dated at Sydney this 24th day of August 2023
116 | IVE Group Limited Annual Report 2023
Independent Auditor’s Report
Independent Auditor’s Report
To the shareholders of IVE Group Limited
To the shareholders of IVE Group Limited
Report on the audit of the Financial Report
Report on the audit of the Financial Report
Opinion
Opinion
We have audited the Financial Report
of IVE Group Limited (the Company).
We have audited the Financial Report
In our opinion, the accompanying
of IVE Group Limited (the Company).
Financial Report of the Company is in
In our opinion, the accompanying
accordance with the Corporations Act
Financial Report of the Company is in
2001, including:
accordance with the Corporations Act
•
2001, including:
giving a true and fair view of the
Group’s financial position as at 30
giving a true and fair view of the
June 2023 and of its financial
Group’s financial position as at 30
performance for the year ended on
June 2023 and of its financial
that date; and
performance for the year ended on
complying with Australian
that date; and
Accounting Standards and the
complying with Australian
Corporations Regulations 2001.
Accounting Standards and the
Corporations Regulations 2001.
•
•
•
The Financial Report comprises:
• Consolidated statement of financial position as at 30
The Financial Report comprises:
June 2023
• Consolidated statement of financial position as at 30
• Consolidated statement of profit or loss and other
June 2023
comprehensive income, Consolidated statement of
• Consolidated statement of profit or loss and other
changes in equity, and Consolidated statement of
comprehensive income, Consolidated statement of
cash flows for the year then ended;
changes in equity, and Consolidated statement of
• Notes including a summary of significant accounting
cash flows for the year then ended;
policies; and
• Notes including a summary of significant accounting
• Directors’ Declaration.
policies; and
The Group consists of the Company and the entities it
• Directors’ Declaration.
controlled at the year-end or from time to time during
The Group consists of the Company and the entities it
the financial year
controlled at the year-end or from time to time during
the financial year
Basis for opinion
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.
We conducted our audit in accordance with Australian Auditing Standards. We believe that the
Our responsibilities under those standards are further described in the Auditor’s responsibilities
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
for the audit of the Financial Report section of our report.
Our responsibilities under those standards are further described in the Auditor’s responsibilities
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
for the audit of the Financial Report section of our report.
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
Ethics for Professional Accountants (the Code) that are relevant to our audit of the Financial
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of
Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the
Ethics for Professional Accountants (the Code) that are relevant to our audit of the Financial
Code.
Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the
Code.
Key Audit Matters
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgment, were of most significance
in our audit of the Financial Report of the current period.
Key Audit Matters are those matters that, in our professional judgment, were of most significance
This matter was addressed in the context of our audit of the Financial Report as a whole, and in
in our audit of the Financial Report of the current period.
forming our opinion thereon, and we do not provide a separate opinion on this matter.
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.
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
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
a scheme approved under Professional Standards Legislation.
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.
117
Valuation of Goodwill at 30 June 2023 ($110 million)
Refer to Note 12 to the Financial Report
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 16% 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 focused on
the significant forward-looking
assumptions the Group applied in
its value in use models, including:
• Assessment of the Cash
•
Generating Units (CGUs)-The
Group had several operating
businesses and product lines,
combining CGU’s and an
acquisition during the year.
This necessitates our
consideration of the Group’s
determination of CGUs, based
on the smallest group of
assets which 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;
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 have considered the Group’s
determination of combining of three CGU’s
based on our understanding of the Group’s
business;
• We analysed the consistency of the allocation
of goodwill to CGUs with how goodwill is
monitored through with the Group’s internal
reporting;
• We considered the appropriateness of the
value in use method applied by the Group
against the requirements of the accounting
standards;
• We assessed the integrity of the value in use
models used, including the accuracy of the
underlying calculations;
• 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;
• We considered the sensitivity of the models
by varying key assumptions, such as forecast
operating cash flows, forecast growth rates,
118 | IVE Group Limited Annual Report 2023
• 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
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
judgmental 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.
terminal growth rates and discount rates,
within a reasonable range. We considered
the interdependencies of key assumptions
when performing the sensitivity analysis and
what the Group considers to be reasonable.
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 skepticism 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
products, 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 using publicly available 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 against the requirements of the
accounting standards.
119
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.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do
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
assessing the Group’s ability to continue as a going concern. 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 or to cease operations, or have
no realistic alternative but to do so.
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
120 | IVE Group Limited Annual Report 2023
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration
Report of IVE Group Limited for the
year ended 30 June 2023, 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 38 to 53 of the Directors’ report for the year
ended 30 June 2023.
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
24 August 2023
121
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 24 July 2023.
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
Anthony Young
Ryan Young
Number of
Shares Held
10,216,605
10,118,488
%
7.1%
7%
Date of notice
to ASX
27 May 2022
6 August 2022
Pengana Capital Group Limited
7,179,881
5.003%
21 September 2022
Washington H. Soul Pattinson &
Company Limited
Caxton Print Holdings Pty Ltd as
trustee for the Selig Family Trust
7,179,881
5.003%
27 September 2022
8,417,263
5.56%
29 September 2023
Tynan Young
7,642,431
5%
26 April 2023
Distribution of shareholders and shareholdings – ordinary shares
There are 152,096,028 ordinary shares on issue held by 3,792 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
352,002
3,317,095
5,201,127
34,910,136
108,315,668
%
0.2
2.2
3.4
23.0
71.2
No. of
holders
664
1,178
650
1,159
141
%
17.5
31.1
17.1
30.6
3.7
152,096,028
100.0
3,792
100.0
122 | IVE Group Limited Annual Report 2023
Distribution of performance right holders and holdings – performance share rights (unlisted)
There are 3,419,947 unlisted performance share rights on issue that have been issued under an employee
share plan. These are held by 8 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
Performance
Share Rights
%
No. of
holders
-
-
-
-
-
-
-
-
3,419,947
3,419,947
100.0
100.0
-
-
-
-
8
8
%
-
-
-
-
100.0
100.0
Unmarketable parcels
The number of shareholders holding less than a marketable parcel of ordinary shares is 139 for 7,456 shares,
based on IVE’s closing share price of $2.22, on 24 July 2023.
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
CITICORP NOMINEES PTY LIMITED
CAXTON PRINT HOLDINGS PTY LTD
BNP PARIBAS NOMS PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
STRATEGIC VALUE PTY LTD
RYLELAGE PTY LTD
NATIONAL NOMINEES LIMITED
MR STEPHEN CRAIG JERMYN
SCJ PTY LIMITED
EXLDATA PTY LTD
STRATEGIC VALUE PTY LIMITED
DOROTHY PRODUCTIONS PTY LTD
BNP PARIBAS NOMS (NZ) LTD
MR TREVOR READ
JOHN BARNES FOUNDATION LIMITED
RYLELAGE PTY LTD
MR MIKE FEGELSON
CENTRAL MUTUAL (INVESTMENTS) PTY LTD
UBS NOMINEES PTY LTD
CERTANE CT PTY LTD
Total
Balance of register
Grand total
No. shares
19,221,329
8,310,231
8,137,602
5,963,954
5,709,531
5,386,122
5,242,448
4,816,031
3,000,000
3,000,000
2,848,171
2,149,242
1,500,000
1,093,541
1,000,059
930,277
844,444
828,000
800,580
%
12.64
5.46
5.35
3.92
3.75
3.54
3.45
3.17
1.97
1.97
1.87
1.41
0.99
0.72
0.66
0.61
0.56
0.54
0.53
794,973
703,900
82,280,435
69,815,593
152,096,028
0.52
0.46
54.10
45.90
100.00
123
ASX additional information – continued
On-Market Buy Back
There is no current on-market buy back.
Voting rights
The voting rights attached to ordinary shares are set out below:
On a show of hands every member present at a meeting in person or by proxy shall have one vote, and upon a
poll, one vote for each fully paid share held.
Holders of performance rights do not have voting rights on the performance rights held by them.
Voluntary escrow
There were no ordinary shares held in a voluntary escrow arrangement as at 24 July 2023.
Stock Exchange Listing
IVE Group Limited securities are only listed on the ASX.
Corporate Governance Statement
The Board is responsible for the overall corporate governance of IVE Group Limited, including adopting
appropriate policies and procedures designed to ensure that the IVE Group is properly managed to protect and
enhance Shareholder interests.
The Board monitors the operational and financial position and performance of IVE and oversees its business
strategy, including approving the strategic goals of IVE. The Board is committed to maximising performance,
generating appropriate levels of Shareholder value and financial return, and sustaining the growth and
success of IVE.
In conducting business with these objectives, the Board is committed to ensuring that IVE is properly managed
to protect and enhance Shareholder interests, and that IVE, its Directors, officers and employees operate in
an appropriate environment of corporate governance. Accordingly, the Board has created a framework for
managing IVE, including adopting relevant internal controls, risk management processes and corporate
governance policies and practices, which it believes are appropriate for IVE’s business and that are designed to
promote the responsible management and conduct of IVE.
Details of IVE’s key governance policies and the charters for the Board and each of its committees are
available on IVE’s website at https://investors.ivegroup.com.au/investor-centre/?page=corporate-governance.
The Corporate Governance Statement reports against the 4th edition of the ASX Corporate Governance
Council’s Principles and Recommendations (ASX Principles) and the practices detailed in the Corporate
Governance Statement are current as at 24 August 2023. It has been approved by the Board and is available
on the IVE website under Investors at https://investors.ivegroup.com.au/investor-centre/?page=corporate-
governance.
This report has been approved by the IVE Group Board.
124 | IVE Group Limited Annual Report 2023
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ivegroup.com.au
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