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PMP generates cash but little profit

Thursday, 28 August 2014
By Print 21 Online Article

The directory business of the regions largest printer crashes as volumes dive by 72% while catalogues hold the line.

Despite sales revenue falling by 7.8% to $899.2 million and print volumes declining by 9.8%, PMP’s results illustrate the cash generating potential of print with free cash flow of $44 million, up from $27.5 million the year before. It posted a statutory profit of $3.4 million.

In a changing market PMP is focusing on lowering its debt, which is now at an all-time low of $51.7 million. This is due to the completion of Phase 3 of the Transformation Plan that saw the company reduce capacity and employee numbers as it rationalised production facilities. However, there was little good news in the prospects of the company’s core printed products.

Magazine volumes followed circulation with a drop of 5.3% with the company blaming weak consumer spending and industry over capacity for the impact on its heatset printing. It is trying to reduce its reliance on this traditional market segment.

In a report to the ASX it highlighted improved results from Gordon & Gotch and the book printing Griffin Press division while the distribution business went gangbusters with unaddressed marketing material volumes up 12%. Overall PMP NZ performed better than its Australian counterpart improving its results by 2.1% to $160.9 million as opposed to a drop of $53.7 million (10.9%) in sales revenue across the Tasman.

Despite the tough result management is confident the reduced cost base and lower financial risk means the company is well underway to building a more profitable and sustainable PMP. Its primary ongoing focus is to be a retail catalogue specialist with expanded digital marketing while developing ever more targeted versions.

At 46.5 cents per share the company is continuing its slow climb back in sharemarket value. It listed its assets at $502,654 million, down from $549,208 million last year. Guidance of the company’s plans and future directions will be given at the AGM in November


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