PMP soldiers on from annus horribilis

Print and distribution giant, PMP, haunted by horror year.

There is no denying the numerous blows that hit the company in the past year, many of which still reverberate today. In its annual report released this week, PMP chairman, Graham Reaney, described the period of 2008-09 as “a turbulent and very unsatisfactory year.”

From the weight of the Global Financial Crisis through to a scalding from the ACCC over its catalogue distribution practices, recession raging in New Zealand and a legal stoush with former CEO, Brian Evans, the company has faced one battle after another. It should come as no surprise to learn that earnings were down 36.3 per cent at $54.2 million for the 2008-09 period. Revenue for print fell 3.9 per cent to $696.4 million while letterbox distribution also experienced “a disappointing year.”

Following his mysterious and unexplained exit earlier this year, which prompted a legal battle, the annual report cast some light on the Evans saga, revealing that he received $825,000 as a termination payment from the company, significantly less than the amount he was hoping for.

Resurfacing from the dramas, Reaney said that PMP now aims “to become Australia and New Zealand’s lowest cost print and distribution company.”

New CEO, Richard Allely, (pictured) has wasted no time in implementing a transformation plan for the company. He believes that the changes to PMP – including a new management team – have put the company back on track. “By June 2010, PMP’s reputation will have been restored,” he said. “PMP will be seen as a professional, honest and committed employer.”

Print, like most other facets of the PMP business, was described by Peter George, executive general manager of print Australia as “disappointing.” He noted that the first half of the financial year kicked off on a high note with volumes up, but they sharply declined in the final quarter.

“The real problem was pricing,” George admitted. “As paginations dried up and retailers became more cautious with their advertising spend, the industry developed spare capacity, which affected pricing behaviour.”

Reaney, along with other members of the Board, expect market conditions to remain challenging throughout 2010. “We will therefore continue to focus on reenergising PMP as a lean, efficient, customer-focussed print and distribution company,” he said.