PMP has released its half year results and selected Kevin Slaven as its new chief exective, replacing Peter George.
Slaven, the former chief financial officer and chief executive IPMG, the large Australian print company that PMP merged with last year, has worked as interim chief executive since Peter George’s departure late last year.
In its first half year results as a combined entity with IPMG. PMP doubled its Australian print revenues, to A$244.7m in its H1 FY18 results from A$112.3m in the first half of FY17. However, PMP New Zealand recorded A$64.1m in revenue, a decrease of 8.1 per cent from the previous corresponding year result of A$69.8m. The company’s Distribution segment also decreased from the previous corresponding year, falling 2.3 per cent to A$46.2m from $47.3m, which PMP attributes to lower volumes.
PMP says lower volumes also impacted its book printer, Griffin Press, which more than offset operational efficiencies and EBITDA (before significant items). The company said, “When including the IPMG print business on a comparable basis 1HY17 tonnes were 158k and for 1HY18 actual tonnes are 135.5k, which is a 14 per cent reduction year on year. On a statutory basis however, heatset print volumes were up 105 per cent or 69.3k tonnes pcp.”
As a whole, PMP recorded A$398.5m in sales revenue across the group, a 52 per cent increase from its prior corresponding period result of A$262.2m. PMP had a net loss of $19.5m, having recorded a $5m lower loss in the prior corresponding period of $14.5m. Before significant items the company was profitable, recording $1.1m, having been $2.9m in the black in the prior corresponding period. Net debt has increased by A$22.9m from the pcp, now at $32.8m from $9.8m.
Earnings before interest, tax, depreciation, and amortisation, excluding significant items, is A$20.2m, an 82 per cent increase from the pcp result of A$11.1m, but A$4m lower than the revised guidance given in November.
Kevin Slaven says, “Whilst sales are significantly higher pcp, this is because of the inclusion of the IPMG Print and Marketing Services revenue, partially offset by lower sales at PMPNZ & Distribution. H1FY18 EBITDA (before significant items) of A$20.2m is A$4m lower than guidance given in November 2017. This was primarily due to a weaker than expected second quarter in Print Australia, with all other businesses performing to H1 expectations.
“Whilst the overall heatset print volumes in Australia were slightly ahead of guidance given in November, this was offset by lower than expected average prices due to a change in work mix mainly in the publishing/newspaper sector and some minor cost-out timing variances.
“Whilst the average sell prices at Print Australia are lower than expected, this does not represent a further reduction in prices to heatset customers but rather since November 2017 magazine and newspaper publishers have reduced paginations and quantities in their forward bookings. For the tier one retail catalogue customers, encouragingly we are seeing stability in pricing and increased volumes for a number of customers. This has helped to mitigate the impact of the reduced volumes from publishers. It should also be noted that we have been successful in securing some small format work at higher prices.
“The board and management are not satisfied with this result and are working hard to ensure we improve the underlying Print Australia results.
“Since my appointment as interim chief executive officer in December, I have undertaken an extensive review of each of the operations which has given me the opportunity to obtain a deeper appreciation of what is required to move the business forward and ultimately achieve a better outcome for all stakeholders.
“In light of our recent guidance to the market, we remain focused on the print business’ cost base and will continue to adjust this to reflect market changes in mix and volumes. With the restructuring that has been undertaken over the last year, I am confident that we are in a strong position to continue to demonstrate our market leadership.
“The combined offer we have through our print, digital, distribution and marketing services businesses opens up new opportunities to deliver effective and efficient integrated marketing campaigns for our customers.”
Matthew Bickford Smith, chairman of PMP, says, “The company has been able to retain the extensive skills and experience that Slaven brings to the role. The board has confidence in his understanding of the opportunities and challenges that exist for our company and industry, and his commitment to improve the company’s profitability.”