Cimpress sales slump by two thirds
Online print giant Cimpress, which owns Vistaprint in Melbourne, saw its print orders plunge by 65 per cent at the end of March and beginning of April, recovering to 40 per cent down by the end of the month.
The hit in cashflow has caused the company to raise $460m in new capital, and to temporarily suspend some of its financial covenants.
Sales for the March quarter were down by 10 per cent to US$598m, with the Covid-19 pandemic taking 30 per cent from March sales. The market is bracing for a substantial hit to its second quarter figures. Cimpress recorded an operating loss of US$88m for the March quarter.
The company is reducing its workforce of casual staff, and cutting hours of permanent staff, but said it would ringfence key investments in “technology, data infrastructure, and customer value improvements”.
Cimpress is the holding company that owns online printers including Vistaprint, Pixartprinting, and National Pen. It moved its headquarters to Ireland last year for tax reasons. Annual sales are US$2.75bn ($4bn). The Deer Park Vistaprint plant in Melbourne serves Australia, New Zealand, and South East Asia.
Robert Keane, Cimpress founder, chairman and CEO said, “We have positioned Cimpress to stay on offense during and after this pandemic by taking actions that allow us to continue to fund key projects that we believe will benefit our customers and long-term shareholders.
“Even though deep economic recessions are painful, they also create opportunities and accelerate competitive advantages for companies with strong business models that focus on execution, invest in key projects, and improve customer value. Our recent actions ensure that Cimpress remains financially robust during these uncertain times so that we can do exactly that.”