PaperlinX Australian paper sales crash by 15% - NZ is steady
Sudden and severe declines in paper consumption across Europe contribute to a $60.9 million loss in half-year results.
Global paper volumes for the troubled paper merchant fell by seven per cent to 1.26m tonnes. It is seeking to offload assets and raise cash in order to restructure its loss making European operations.
European volumes exacerbated by falling prices fell by eight percent resulting in seven per cent decline in revenue. Australian and NZ revenue fell by 10 per cent, largely due to the 15% reduction in Australian volumes.
The reduced paper volumes for the local market from the leading supplier are indicative of depressed printing activity in the past half year. The run up to Christmas is traditionally regarded as the strongest period of activity.
PaperlinX results are described as disappointing by Toby Marchant, London-based CEO, as he seeks to refocus the company as a general graphic arts supplier across signage and display, packaging and digital printing. “These results are very disappointing reflecting our exposure to the European crisis. We have made progress in reducing our cost base…but this is insufficient to offset volume and price pressures in the half.
“The Board approval of a further major restructuring program in Continental Europe is therefore vital. To execute this we need additional liquidity which we will address through asset sales and other potential sources,” he said in a statement to the ASX.
PaperlinX is looking to its diversified activities to turn around the company. It is already a major supplier of wide format equipment and substrates in Australia under the iMedia brand. With its industry-wide footprint it is ideally placed to capitalise on its logistics infrastructure. It reported strong growth from its diversified businesses in every region and expects it to produce 30% of its business by 2014, up from 23.9%.
The Interim Results come as Andrew Price continues to ramp up his campaign to displace Harry Boon as chairman of the company. He is canvassing support from shareholders, including Garry Crole of Interprac Financial Planning, who controls 12 million PaperlinX shares. A statement criticising the holding of the General Meeting that Price demanded to be held said;
“Given the significant support I am receiving for the resolutions to replace Mr
Boon, I am disappointed to see him wasting more shareholders money on a
General Meeting where the outcome appears to be certain."
PaperlinX results are described as disappointing by Toby Marchant, London-based CEO, as he seeks to refocus the company as a general graphic arts supplier across signage and display, packaging and digital printing. “These results are very disappointing reflecting our exposure to the European crisis. We have made progress in reducing our cost base…but this is insufficient to offset volume and price pressures in the half.