Note Printing Australia has posted a turnaround in earnings performance despite suffering a revenue dip in the 12 months to the end June 2020.
The RBA-owned subsidiary posted a net profit of A$3.8 million – a big improvement on its disappointing bottom line loss of $1.5 million in 2019.
NPA is a for-profit enterprise that conducts most of its business at a note and passport printing facility located in Craigieburn, an outer northern suburb of Melbourne.
The company, which recently lodged financial accounts with ASIC, suffered a 3 per cent fall in revenue to $124 million mainly due to a sharp fall in passport demand.
NPA maintained robust note printing volumes during the year, spurred by the introduction of the new generation $100 banknote series.
The subsidiary delivered 400 million banknotes to match volumes recorded in 2019.
“From a demand perspective, NPA has confirmed orders from the RBA and overseas customers within the Asia region, the revenue from these orders currently offsets the impact of reduced demand for passports,” NPA directors stated in the report.
“NPA expects to maintain its strong cash balance and liquidity position.”
The company held $36.6 million in cash on its balance sheet at the end of June – down from $41 million at the same time in 2019.
Cost reductions underpinned the improved bottom line, along with a $1.1 million recoup of past legal expenses associated with court proceedings flowing from the decade-long foreign bribery scandal.
“The result was driven by lower operational spend and there were also benefits from provisions of previous years associated with finalisation of litigation involving former employees,” the directors said.
“The COVID-19 virus only had a minor impact on profitability.”
NPA’s bottom line was also enhanced by tax benefits related to research and development activity and operating losses from previous years.
The company’s effective tax rate was about 25 per cent.
No dividends were paid or proposed to be made to Reserve Bank in 2020.
In 2019 the business distributed $12 million to its owner.