Paper merchant Spicers is cutting several back-office jobs as part of the restructuring of its Australian business following the settlement of a long-running dispute with former PaperlinX hybrid shareholders.
Spicers told the ASX that the estimated cost-savings of these ‘headcount reductions’ will be $1.3 million in financial year 2018, progressing to an annualised benefit of $1.7 million.
Several roles in predominantly back-office functional areas will be made redundant as a result of this specific and targeted restructuring, with minimal impact on customer-facing roles. The cost of these redundancies will be $0.9 million, which will be recorded as a significant item in Spicers’ financial report for the year ending 30 June 2017.
Spicers CEO David Martin says “less than 15” mainly non-operational, back-office jobs will go. “There will be no change to customer-facing roles in our production print operation. It’s not a wonderful day for the people made redundant but they’re being looked after through the business. We’re strong on our values and we’re making sure that we’re supporting these people.
“While our Australian business has taken several steps to optimise operational performance and reduce costs throughout the year, including portfolio profitability reviews, optimising our working capital and reducing premises lease costs, further changes were necessary to improve our profitability in a challenging market environment,” says Martin.
“The resolution of a number of legacy corporate issues, culminating in the imminent simplification of Spicers’ capital structure, will lead to reduced corporate administrative activities going forward. It is important to note that the redundancies we have announced today are directly related to the need to restructure our operations and cost base, enabling investment in our business growth.
“We thank the affected team members for their contributions to the business and will support them through this difficult period.”
Meanwhile, Spicers confirmed its acquisition of SPS Trust, the responsible entity for its former PaperlinX hybrid shares, and SPS Trust was removed from trading on the ASX at the close of business, 27 June.
Spicers also announced its NZ business has acquired Sign Technology, a leading supplier of LED and neon sign components.
“Sign Technology has been identified as a good ‘bolt-on’ acquisition for Spicers NZ, which will provide us with excellent access to strong global LED and neon component brands in a market sector where our Sign & Display operation currently has a relatively small presence,” says John Greenacre, GM Spicers NZ.