PMP print volumes plummet

Decline in print volumes forces PMP to adopt transformation plan.

According to new CEO, Richard Allely, the drop required action and, after introducing Phase 1 of his two-pronged plan, PMP achieved savings of $26 million on an annual-run rate basis, mainly due to a spate of redundancies across the company.

Allely, (pictured), refused to disclose how far volumes had dropped, saying only that the largest decline has been in PMP’s print and letterbox distribution businesses.

“We have suffered in the letterbox distribution area, mostly through our loss of marketshare,” Allely said. “In our print business, magazines have been the most affected: publishers have reduced their pagination due to the advertising market being in decline, along with reducing circulation because the current economic situation has affected people’s buying habits.”

News of Australia Post increasing prices from 6 July has not deterred Allely’s hopes of magazines from recovering. “I hope [the effects of the price rise] is minimal,” he said, “but whenever a logistics provider increases fees and charges there will always be a small number of people who decide to suspend delivery.”

Next up for Allely is implementing Phase 2 of his transformation plan, which includes overhauling PMP’s planning, scheduling, supervision, logistics and administration processes. He hopes that specialist print production facilities will be better aligned to customer product markets, along with a customer-focused culture.

“These changes … will deliver significant financial and operational benefits,” he said. Allely expects PMP to deliver a $54 million EBIT result for fiscal 2009.

To date, 362 redundancies have taken place at PMP this year. Allely added that this was not the end: “There will be further redundancies in 2010,” he warned.