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PMP looks ahead after successful IPMG merger

Wednesday, 30 August 2017
By Print 21 Online Article

PMP posted a net loss of $126 million in FY17, dragged down by $105 million in costs related to its merger with IPMG, but CEO Peter George says Australia’s largest printer is now well positioned for the next two years.

Sales revenue jumped 28.9 percent from 2016 to $1.05 billion, mostly due to higher sales at distribution unit Gordon & Gotch and the Print Australia business.

EBITDA was down 37 percent to $32.2 million, with a net loss for the year of $1.9 million – before ‘significant items.’ However, after adding a total of $142.6 million in significant items – including $105 million related to the IPMG merger – the net loss for the year was a whopping $126.4 million. The company posted a slender profit of $200,000 in FY16.

“Fiscal 2017 was both challenging and rewarding, marked by print industry consolidation and the completion of the merger with IPMG,” said George. “I am pleased to report that our transformation program has run smoothly and on schedule.

“We end the year with the press fleet rationalization complete, a new optimized national manufacturing footprint and $40m of annualized cost savings actioned within four months of the merger. Further reductions in indirect costs, including procurement are already well underway to deliver net $55m of synergies by fiscal 2019.”

George said PMP was now on track to deliver earnings before tax of $70m-$75m in FY18 and $90m-$100m in FY19, with the company also set to be debt free in fiscal 2019.

In its ASX announcement, PMP said: The Australian web heat-set printing industry has consolidated from five to two players – a more efficient industry structure. With the merger, PMP has enhanced its scale and capability, enabling better capacity management and improved fleet utilization.

 PMP expects challenging print industry market conditions to continue into FY18, with major print contracts still subject to strong price competition and some volatility while the market adjusts to the new industry structure. Tough retail conditions are expected to continue.

 George remains optimistic: “It is very pleasing to see the successful transition to the new national print manufacturing footprint while at the same time achieving the expected annualised savings quickly and efficiently.

“Following the merger with IPMG, PMP has the strongest tier 1 customer base in the industry. The merger has enabled us to upgrade our press fleet without capital expenditure. PMP now has the widest range of web presses in the industry which gives our customers greater flexibility for scheduling.

“We expect to continue to strengthen our position in the key print and distribution markets and the company’s disciplined focus on generating free cashflow will remain front and centre for the foreseeable future.”


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