Australasia’s leading printer PMP has blamed the collapse of retail chain Dick Smith and customers supplying their own paper for a 58.8 per cent drop in half year profit.
PMP booked a $2.7 million impairment charge related to the money it’s owed by Dick Smith - a PMP customer for print and distribution services – into its first half accounts, pushing net profit for the six months to December 31 down to $1.78 million. A year earlier, the printing group posted a profit of $4.31 million.
PMP added that it was unlikely to recover a total of $3.9 million owed by the electronics chain, which went into receivership in January with debts of $400 million.
Total revenue dropped 8.7 per cent to $392.3 million, with most of the decline due to customers supplying their own paper, according to a company statement. Catalogue print volumes were down four per cent in Australia as the company exited low margin contracts, but distribution volumes were up six per cent. Lower publishing volumes in New Zealand were mostly offset by cost savings.
Despite operating in a falling market, PMP’s distribution arm will receive a massive $1.5 billion boost in sales over the next five years after taking over rival Bauer Media’s distribution division, Network Services Company.