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Blue Star battles Australian market

Friday, 02 March 2012
By Print21

Poor market conditions in Australia and New Zealand have continued to impact Blue Star’s bottom line for the six months ending December 2011, with a 4.4 per cent drop in total revenue from the previous year, it was revealed this week in the company’s half-yearly results.

The communications and print solutions group reported its sales revenue for the six months ending last year was $280.3 million, $13 million short of 2010’s result for the same period of $293.3.

According to Blue Star’s joint chairman and managing director’s report, the continued downturn in revenue was the result of poor trading condition, particularly for the company’s Australian Print division, which fell to $117.2 million from the previous year’s $133.8 million.

“The financial performance of Blue Star for the six months to 31 December was disappointing…the headwinds affecting the industry have been such that earnings fell short of expectations,” the report says.

“The period under review saw a continuation of the difficult trading conditions that have impacted the print industry over the past several years. The market continued to decline due to changing customer spending patterns and depressed economic conditions, particularly in Australia.

“This poor trading environment was most evident towards the latter part of the calendar year when adverse conditions intensified and resulted in a performance that was considerably worse than expected,” says the report.

However, despite the difficult market conditions that saw the company’s operating loss for the half-year balloon from the previous year’s $6.3 million to $15.6 million, Blue Star’s earnings before interest and taxes (EBITDA) of $20.7 million were only marginally lower than the previous year’s $24.9 million.

In a bid to stem its operational losses and buoy its overall profits, Blue Star will continue to implement a number of initiatives to improve its financial performance, including reducing inventory holdings, further restructuring, and the realignment of capital expenditure.

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