Picture: ISTOCK
Picture: ISTOCK

Printing and manufacturing group Novus, which is adjusting to a less favourable contract with Media24 than it previously had, said on Friday it would shelve its acquisition drive.

Under the new contract, which took effect in April, Novus is responsible for just 58% of Media24’s printing requirements by volume, while prices were also cut. Novus prints the newspapers and magazines of its erstwhile parent, Naspers, and makes labels, packaging and tissues. The group said its diversification strategy had yielded only small revenue and profit gains.

"Under the circumstances it has been decided in the short term to curtail the acquisition drive, focus internally to consolidate and stabilise existing businesses and to maximise sustainability and cash-generating ability," Novus said on Friday.

The company said it expected print revenues in the 12 months ending March 2019 to decline to between R3bn and R3.3bn, from R3.6bn previously.

The fall would be mitigated by better revenues from labels, packaging and tissue manufacturing, Novus said, adding it may sell the tissue unit.

Group revenue would probably be between R3.9bn and R4.4bn, from R4.3bn in the 2018 financial year. Novus’s share price closed 5.06% higher at R4.15 on Friday.