Novus Holdings (NVS) investor relations material

Executive summary

• Revenue increased by 1% year-over-year to R2,109 million, but operating profit dropped to R102.5 million from R196.4 million due to lower Education segment profitability and higher operating expenses.

• Trading period was disappointing due to uncertainty and reductions in advertising and government education spending.

• Print, publishing, and distribution segment outperformed prior period, aided by earlier DBE orders and margin recovery.

• Education segment shifted from profit to loss, mainly due to delayed government orders and budget constraints.

• Packaging segment saw a slight decline, prioritizing margin retention over volume.

Financial highlights

• Gross profit margin improved to 31.4% (2024: 31.2%), up from the prior year, as paper pricing pressures eased.

• Overheads and operating expenses rose, mainly due to new business units and higher staff and technology costs, impacting EBITDA, operating profit, and EPS, which all declined year-over-year.

• Cash balance at period end was ZAR 742 million (R741.7 million), with an additional ZAR 400 million expected in December.

• Dividend of 55 cents per share declared for the period.

• Headline earnings per share fell to 26.57 cents (2024: 59.36 cents); net asset value per share increased to 679.08 cents.

Outlook and guidance

• Full-year performance expected to be slightly below last year due to lower DBE workbook volumes.

• Margin improvements in print expected to be sustained; education segment to recover to about 75% of prior year levels.

• Significant order book for H2, but full-year education orders projected to be 20%-25% lower than last year.

• Print volumes are expected to decline further, with anticipated paper price increases pressuring margins.

• Uncertainty remains around timing and scale of government curriculum changes and related procurement.