Ovato placed in administration, raising questions about who will print Women’s Weekly long-term

A printing business headed by one of Australia’s richlist families has called in administrators leaving hundreds of jobs at risk and impacting iconic magazines.

A 50-year-old printing business headed by one of Australia’s richest families has called in administrators leaving hundreds of jobs at risk and impacting iconic magazines like Australian Women’s Weekly.

ASX-listed Ovato has been placed into administration after years of shedding operations and employees.

FTI Consulting was appointed on Thursday morning to operate the printer, which has sites in NSW, Queensland, Victoria, Western Australia and New Zealand.

Ovato, which prints Australian Women’s Weekly, Gourmet Traveller, The Economist, Woman’s Day and some News Corp magazines among many others, will continue to trade while an assessment of its financial position is undertaken.

It was also the publisher of mass catalogues for the likes of Harvey Norman, Coles and Woolworths.

It is headed by Sydney-based richlister family the Hannans, with James Hannan the chief executive and father Michael Hannan the current chairman. Between them the Hannans control at least 26 per cent of Ovato.

James Hannan declined to comment on the administration on Thursday.

In a note to creditors, FTI administrators Chris Hill, Ross Blakeley and Ben Campbell said they had been advised Ovato’s troubles had come after “volatile market conditions” dragged it down.

Australian Women’s Weekly.

During the pandemic Ovato lost business when Woolworths and Wesfarmers decided to pare back their catalogue printing and distribution.

In 2021, the business cut almost a quarter of its operations before pivoting to a $40m cash raise to bankroll a potential recovery.

Ovato also split its operations in 2021, leaving almost 800 staff on the payroll of an unviable business that immediately went into liquidation.

Taxpayers were left to foot the bill of the rearrangement, with the $17m in redundancy costs of the workers covered by the Fair Entitlements Guarantee.

Post-split, Ovato still had almost 1000 workers on the books and of the $40m raise, the Hannan family was forced to dip into its pockets and cover $35m of the issue.

The Hannans have been a driving force behind Ovato since the merger of Australia’s two largest printing businesses — the Hannan Group printing business and PMP in 2016.

The deal resulted in the Hannans retaining most of the land assets used by Ovato, including the massive Warwick Farm printing facility in Sydney’s South West rented from the family.

The Hannans, who also own tracts of land around Australia, have sold down their holdings over the years as Ovato shrunk.

On Thursday AMWU assistant national secretary (print and packaging) Lorraine Cassin, a frequent critic of Ovato’s management, said the union was “angry” its members faced the closure of the business and questioned its treatment of workers over the last two years.

“The Hannan family should have done this years ago, instead of splitting the company in two to shift its debts to workers on to the public purse,” she said.

“We’ll work in good faith with the administrators to find the best solution we can, going forward.

“And we’ll keep fighting to make sure Ovato workers get the compensation and respect they deserve.”

Kevin Slaven resigned as Ovato chief executive after it concluded a restructure in 2021. Picture: John Feder

Ovato’s longtime chief executive, Kevin Slaven, left the business in June 2021 after its restructure.

Most recently, Ovato moved to restructure its New Zealand operations in the face of ballooning paper prices, shutting its heatset printing business and closing letterbox distribution.

This was after it shut its Christchurch printing site.

Last September, Ovato wrapped up the sale of its retail distribution business to glossy magazine publishers Are Media, which resulted in it shedding 250 employees.

That deal gave Ovato $15m cash and allowed it to shed almost $20.8m in liabilities.

The Covid-19 pandemic proved to be a tough period for Ovato, as print sales fell.

The printing business was able to receive more than $41m in JobKeeper while it was on offer from the previous federal government.

Ovato recently sold its entire book printing business for $8.5m in cash and a $2.5m convertible note to Opus Group, a Hong Kong-listed printer which operates brands such as McPherson’s.

Ovato’s book printing business, formerly known as Griffin Press, operates out of Adelaide.

The deal was spruiked by James Hannan as giving Ovato a “refreshed debt profile” and offering it a “path towards equity and investment”.

But now, just two months later, Ovato has called in administrators.

The company’s most recently available accounts showed it sitting on $7.8m in cash but facing $48.1m in debts.

Other directors have been left Ovato ahead of its collapse with Dhun Karai and Paul Young both resigning in the past six weeks.

Meanwhile Ovato’s sales revenue has tumbled — down 31.8 per cent in the past year.

In 2017, Ovato shut its Noble Park factory in Melbourne’s southeast after the Hannans moved to sell the site for $15m.

Ovato’s predecessor, IPMG, sold its massive Alexandria print site in 2013 for $343m.

Ovato is also the publisher of some News Corp magazines.

Originally published as Ovato placed in administration, raising questions about who will print Women’s Weekly long-term