HPA key to Salmat growth

Salmat's acquisition of HPA begins to pay off for the company, increasing its revenue by 35 per cent.

The purchase, which took place in November 2007 was widely hailed by Salmat's executives during last week's annual general meeting.

"HPA resulted in Salmat recording its highest ever turnover with revenue increasing 35 per cent to $812 million," said Richard Lee, chairman.

While Salmat's earnings for the year were originally up 22.6 per cent to $57.6 million, the impact of significant items, namely costs related to the launch of Lasoo and HPA, brought the final result back to $44.1 million.

Joint managing director, Peter Mattick, said that HPA helped boost BusinessForce's revenue along with the growth of laser print volumes. Changes to the BusinessForce division also meant that some PrintZoo sites and Perth and Canberra branches were quickly merged, with more to follow in Brisbane and Adelaide.

"This [HPA] integration involved brining together around 2000 staff across more than 15 sites to form one cohesive group," Mattick said.

"We are almost half way through the integration program and remain on track to meet our internal deadline of completion by the end of calendar 2009."

HPA will be the main focus for Salmat in the coming year, where its real benefits are expected to come into fruition. "We are excited about the opportunities for additional revenue and synergy cost savings from what is now Salmat's largest division," Lee said.

Beyond Australia, Salmat also entered into a new venture with New Zealand Post, covering the distribution of unaddressed mail in New Zealand. The business is still finding its feet, according to Mattick, and he expects "significant improvement" over the next two years.

It is also the end of an era for the company as join managing directors Philip Salter and Mattick phase out of the daily runnings, handing over the reins to new-comer, Grant Harrod.

"We believe that this arrangement will enable Salmat to enjoy continued access to the valuable corporate knowledge of Salmat's founders while at the same time benefiting from the fresh new leadership of Harrod," chairman Lee said.

Looking to the future, the company expects increased market stability with pricing returning to "more realistic levels" in the coming months. For now, Salmat will focus on the completion of its BusinessForce integration program, promoting its service offering across the group-wide client base, reducing debt and pursuing organic business growth.

Unperturbed by economic uncertainty, Mattick also added that Salmat expects "a good half-year result and remain comfortable with a forecast of $75-80 million for the full year."