PMP has reported a sales increase of 21.9 per cent, recording A$734m $797m) for this financial year.
The company saw a net loss after significant items of A$43.8m, down from its loss of A$126.4m the year before. Net profit before significant items came to A$1.1m, with the company recovering from its loss before significant items of $1.9m in the year prior.
Keeping with the IPMG merger last year with costs including the closure of three sites, sale revenue dropped by 12 per cent on a like for like combined business basis. The drop in revenue on a like for like basis comprised of $86m in local segment Print Australia and $22m in PMP New Zealand and Marketing Services. In Australia, the print reduction came mainly from a loss of major customers Coles and Pacific Magazines at $61m following the IPMG merger, with a further $25m being lost to volume cutbacks in newspaper and magazines sales.
Kevin Slaven, chief executive at PMP, says, “This was the largest and most complicated integration in our industry’s history. The initial productivity and workflow issues are now behind us. After the merger and the physical integration of the businesses, we have now moved into a new era. We are a profitable business and we have the ability to grow new revenue streams.”
Ebitda for the group of A$40.6m, marked an increase of 26 per cent, which PMP says reflected its additional eight months profits from the IPMG business and post merger savings. The company’s earnings fell in line with its guidance which had been downgraded twice in the year.
The company saw a net loss after significant items of $43.8m, down from its loss of $126.4m the year before. Net profit before significant items came to $1.1m, with the company recovering from its loss before significant items of $1.9m in the year prior.
In New Zealand, PMP generated $120.1m in revenue, a 6.8 per cent decline from $128.8m the year before (a 4.4 per cent decrease in local currency). Its ebitda came to $10.6m, dropping 14.7 per cent from $12.4m the year before.
ordon & Gotch saw its ebitda on the rise, up $0.9m while heatset print ebitda was down by $2m for the region, with the company citing lower selling prices offsetting tight cost controls and lower input costs. Sheetfed revenue was also lower, down 5.9 per cent. Distributions ebitda was $0.3m below last year.
PMP will invest in a new 80 page manroland press, for installation at its Warwick Farm site in Sydney, costing A$20m. The company aims to retire older presses at both its facilities in Warwick Farm and Moorebank, Sydney, making a net reduction in its overall fleet capacity of around 10-15 per cent. It says the press will provide production efficiencies through wider web width, increased running speed and faster make-readies, and in addition will grant cost efficiencies through reductions in labour, energy, repairs and maintenance.
Slaven says, “The enhancement of data insights in our print and distribution will open up new opportunities for us. Additionally, the installation of a new press next year and retiring some of the older presses will strengthen our earnings.
“Revenue across our top 20 customers has grown year on year, and retail customers has also increased year on year.”
In its outlook, PMP says heatset pricing is stabilising in Australia. It also expects to see savings form its merger, although PMP says that will be offset by lower print volumes mainly in newspapers and magazines.
Slaven adds, “We have been hit with paper price rises, but the retailers and customers are aware of those increases and we have been able to work through them. The other thing to note is that suppliers are expecting those prices to stabilise.
“We are always proactive with telling our customers. The discussions are always around how can we improve the reach and reading time on their catalogue, and what data investments can we give them, to keep the catalogue in front of people.
“We are not a business in terminal decline. We do have a profitable and sustainable future.”