PMP hands control of printing plants back to the states

The move reverses a decade of corporate concentration for the region’s largest printing company, with previous management centralising command and control structures following a takeover spree of individual companies. Evans, who has recently joined the company from his role as operations director of Fairfax after former PMP chief David Kirk snaffled the top job with the newspaper company, is known for his direct, hands-on style of management.

He labels the company’s current national management method as unwieldy, and wants to give state managers more control and input in operational decisions. Each state will be held accountable for its respective profit and loss, and the changes are pegged to drive decision making to a local level while still allowing the print division to leverage its national network.

Though it is not clear how many of the company’s 3,500 staff will be retrenched, Evans confirmed at a guidance meeting this week that it will be made up of senior and middle management and contractors.

“We have significantly reduced the costs in HR & IT while at the same time delivering more appropriately aimed support to the business,” says Evans. “We have incurred a number of redundancies in these areas and expect to continue to focus on lowering our group overhead costs in the near term.”

He confirmed PMP’s forecast for the current financial year as EBIT $80-$85 million, in line with market consensus, a figure up from last year’s $72.1 million. This requires second-half earnings to be significantly above last year’s.

“We expect the second half of fiscal 06 to be stronger than the first half largely due to the benefits associated with the recently commissioned Man Roland presses, acquisitions in New Zealand and further restructuring of the business,” said Evans.

The four presses are now fully operational, and the company reckons the full cost benefits will be in force from the end of the year. Evans insists the additional capacity made available by the new presses will be taken up by growing client demand. Industry sources are predicting an intensive price war with many magazines that are currently printed by sheetfed presses migrating to lower price web.

“In my meetings with our major clients over the past month I have been encouraged by their desire to want to give more work to PMP,” says Evans.

“With our new presses now fully operational and our delivery in full, on time improving, I’m confident of some modest revenue growth for the business. That said, it’s important to point out that our forecasts do not include any real revenue increase.”

PMP also claims the three acquisitions made in New Zealand in the last three months, including Times Color, Saxon Print and First in Print for a cost of around $20 million, will succeed in boosting the company’s standing in the country and add to its bottom line.