CPI battered by failed print companies

Mass print business closures makes a dent in CPI.

The paper supplier expressed concern over the unrelenting carnage that has claimed some of Australia's well-known businesses. Managing director, Bernard Cassell, (pictured), said that these closures could impact upon the company.

“During the second half or the year, the industry experienced an unprecedented level of failures amongst its customer base,” he said.

The estimated result for the group for the 2010 financial year includes earnings of $5 million, up from $2.9 million in June 2009.

Of these closures, Paul Canty’s Quality Print Groupin Sydney (not in any way associated with Quality Press in Western Australia - ed) was “the most significant of the uninsured failures” where it is expected that the exposure will be in the region of $3 million. CPI holds a second mortgage over the principal’s residence and the mortgagor has advised that the amount owing on the first mortgage is $2.4 million.

“Whilst CPI intends to take appropriate steps to seek recovery of amounts owing to it under the second mortgage, it is also seeking clarification of the first mortgage position in order to determine the recovery that might be expected,” Cassell added.

Though he describes the market as “difficult” with “very patchy trading”, Cassell remains confident that CPI can recover the position lost over the last two years after completing its restructuring and rationalisation program and the appointment of a new senior management team.

“Close control will continue to be exercised over working capital and cash flow and the group will continue to pursue its remaining warehouse rationalisation strategy over the next 18 months to realise further cost savings,” Cassell said.