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Letters, feedback, get it off your chest: 16 December 2009

Tuesday, 15 December 2009
By Print21

IPMG talks back to last week’s story, while the Heidleberg/Kodak deal gets one reader thinking about the future.

Re: IPMG gravure plant firm favourite for Warwick Farm

The article in Print21 today was published without any reference to anyone at IPMG and seemed to rely solely on an article in The Australian earlier this week.

This article was a result of IPMG recently lodging its Statutory Accounts for the 2009 financial year with ASIC.

The accounts relate to the printing, digital media, distribution, merchandising and publishing businesses, and include the results of the BlueFreeway Group of Companies from the date that IPMG took effective control in November 2008. The results of the Properties business are not included in IPMG.

Whilst the headline “loss” number in the accounts is significant it is important to note the following:

* Although significantly affected by the economic slow-down associated with the Global Financial Crisis, IPMG has traded to expectation during the year.
* There was positive net cash generated from operating activities during the year.
* IPMG has an exceptionally strong balance sheet with a large net asset position and extremely low gearing.
* The trading performance November year-to-date FY10 is in line with budgets.
* Senior management is confident that IPMG is in a strong position to take full advantage of the changing media and advertising landscape, and the improvement in the economy.

The net accounting loss reported in the accounts includes a number of non-recurring and predominantly non-cash accounting adjustments. The major adjustments to the positive trading result include the write-down of goodwill, impairment of land and building values, recognition of potential interest relating to deferred settlement obligations at BlueFreeway and various other non-trading, non-recurring items.

Whilst the reported results for the 2009 financial year were a disappointment, the Shareholders are comfortable with the underlying strength of the IPMG businesses, and are confident that the Group is well-placed to take advantage of the opportunities that will present themselves over the foreseeable future.

Stephen Anstice
IPMG

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Re: Kodak master deal to transform Heidelberg

What a strange deal this is and to whose benefit? For Kodak, they will have a short-term gain by capturing some excess plate business and cutting staff at some point (why would you need the same number of sales people etc?) Long term it is a potential disaster for Kodak, if Heidelberg have dropped Agfa in the Saphira box then what’s to stop the same happening 18 months from now to Kodak to a cheaper or better product? Suddenly Kodak would have lost its user base and connection to the end user and Heidelberg can substitute whatever is in the box (that’s why they insist on their own brand). As for equipment, how on earth can Heidelberg approach a customer and not try and sell them Print Ready over Prinergy, let alone how to decide on which CTP? Heidelberg now control the sales cycle and can act without a competitor from Kodak. Let’s be realistic, would Heidelberg really want to sell Prinergy over Print Ready – it just wouldn’t make sense.

It appears that this partnership is born out of desperation and short-term thinking on both sides – kit will be interesting to fast forward 12 months and see Kodak’s reduced equipment sales and slight increased yet highly vulnerable plate business. It also appears strange that this would only happen in one country and not in other areas; it looks like a sunset effort rather than a company strategy.

Freddy Unsworth

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