Once one of the most heavily indebted printing companies in the industry, PMP has halved the amount it owes over the past year to a new all-time low.
With sales revenue of $427.3 million and $40 million debt to this half year, the company, notable the largest printing enterprise in the region, is on its way to being able to pay its long-suffering shareholders a dividend. With $20 million of new print and distribution contracts, especially from SA book printer Griffin Press, PMP believes the selling price of print has stabilised after many years of price cutting.
PMP NZ did particularly well with earnings up 17%, mainly due to cost controls and a surprising 6% increase in sheetfed printing revenues.
According to Peter George, CEO, (pictured) the ability for the company to reduce debt to such a degree is a clear indication of its cash generating ability.
“Over the past few years PMP has gone through a period of major transformation as we have largely completed the first two of our three strategic priorities: cost- base reduction and financial risk minimisation. Debt has also been substantially reduced with net debt at June 2015 expected to be $17M - $22M providing the platform for the company to be net debt free by June 2016 in accordance with our three year goal.
"We are continuing to focus on the third strategic priority, which is to build a more profitable and sustainable PMP by focusing on the company’s core expertise in print and distribution.
“In Australia we have recently won a number of print and distribution contracts with annualised revenues of circa $20M. The benefits of these will commence in the fourth quarter of the current financial year.
“We are improving our relevance to retailers who recognise the value of catalogues as an effective selling tool, either as a mass marketing medium or as part of a targeted campaign. The relevance is evidenced by the relative market stability of catalogues delivered over recent years. Industry statistics reflect that catalogue volumes have remained stable when compared to 2009 levels at 7.9 billion items. Our capability to assist retailers to target versions of their catalogues to specific geographic and demographic audiences continues to develop.
“The current subdued retail environment has encouraged retailers to experiment with how often they issue their catalogues and how many pages they contain as they identify the most appropriate mix for their business. Nevertheless, while this has impacted catalogue distribution in the first half of fiscal 2015, catalogues continue to be a critical element of retail marketing and we expect this core part of our business to strengthen in line with the retail sector as it has done through previous economic cycles.
“The company continues to position itself to take advantage of any opportunities that may arise from any structural realignment of the print industry.”