Trans-Tasman print giant PMP saw a drop in profits this year with its New Zealand business by $2.6m following the loss of a major publishing contract.
In New Zealand, sheetfed sales also felt the overall trend of declining sales in the sector, not helped by sell prices declining as well.
Across the Tasman PMP could thank a new A$77m($80m) distribution contract with Bauer Media for keeping its sales figure at the same level as last year. But the company felt the full effect of the Dick Smith collapse which cost around $6m, giving the business a razor thin margin of $185,000 profit for the year.
The company described the financial year as ‘another year of patchy markets’ and said there had been a higher than normal level of customer disruption and churn of contracts. Sales revenue rose by half a per cent and EBIT excluding significant items was down by 11 per cent, while EBIT including significant items was down by 46 per cent.
EBITDA at $51.2m was down by $6.9m with the decline coming from PMP Australia and PMP New Zealand, although it was partially offset by lower corporate costs.
Distribution business Gordon & Gotch saw sales rise strongly to A$345.8m, up by a quarter with the revenues from Bauer offsetting lower sales from existing customers as magazines circulations continue to fall. EBIT was down by 22 per cent falling by A$700,000 to A$2.3m on the impact of those lower sales. The company delivered some 7.4 billion catalogues during the year, down by 2.3 per cent on the previous year
Peter George, chief executive at PMP, says, “The net cash position of $0.7m is a first for the company and contrasts favourably to the position four years ago when the company had $143m net debt.
“This achievement is a clear sign of our cash generating capability and the continued tight control undertaken over working capital and capital expenditure. In addition a new $40m corporate bond was issued which allowed us to repay the previous $50m bond, extend tenor and secure lower funding costs.”
Profit drops at PMP
