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Catalogues drive PMP resurgence

Tuesday, 16 June 2015
By Graham Osborne

Printer and publisher PMP says its resilient catalogue business was the key factor in a financial turnaround that has allowed the company to pay down $30 million of debt over the past year.

In its latest trading update, PMP reaffirmed full-year EBITDA guidance of $57m to $58m, with net debt down from $51.7m at June 30th 2014 to $19m:

PMP CEO Peter George

After 11 months of trading the company is pleased to reaffirm its guidance on the expected results for FY15. Subject to trading conditions in June, PMP expects to deliver: EBIT at or around the middle of the previously announced range ie: $25m¬$26m, EBITDA of $57m-$58m and another new low net debt balance of $19m**, down from $51.7m at June 30th 2014. Following three years of intensive restructuring, PMP has become a more profitable, cash generative and sustainable company. Coupled with the emergence of improved market conditions, as indicated by more stable print industry volumes and heat-set prices, PMP now has a higher degree of confidence in the outlook for the business.

 The printing and distribution of catalogues in both Australia and New Zealand accounts for the majority of PMP’s EBITDA and remains the company’s core activity, said PMP management. “Catalogues continue to be a key marketing channel and effective media for driving sales for retailers. These solid results reflect the continued disciplined execution of the company’s strategy to become the most efficient integrated printer and distributor in Australasia.”

The results reinforce the strength of the catalogue sector in Australia and New Zealand, according to the Australasian Catalogue Association (ACA). “About 19.6 million Australians read a catalogue over the past year,” said ACA Executive Director Kelli Northwood. “Roy Morgan research found that more than 12 million Australians said catalogues were the most useful media for providing information on what to buy in one or more product categories, and catalogues remain the number one go-to media source for groceries, clothes, toys, alcohol and cosmetics.”

In its statement, PMP also announced its intention to pay dividends to investors for the first time in three years.

The Board affirms its intention to commence dividends and/or a share buyback by returning to shareholders up to 50% of FY15 NPAT (pre significant items). This is anticipated to be around $5m. PMP has sufficient franking credits to fully frank the first $3m of dividends and any dividends beyond this would likely be unfranked.

** The settlement of the sale of PMP’s Christchurch property on 19/6/15 is included in the net debt forecast for FY15.

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