PMP strong as ACP D-Day looms

Earnings and debt levels fall for region's biggest printer with ACP decision just weeks away. Brian Evans speaks with Print 21 about what the future holds for PMP.

PMP Limited, the region's largest printing company, saw earnings from its print division fall by nearly 20 percent over the year to June 2008 despite a 7.4 percent increase in revenue to $729.4 million. The fall in EBIT to $65.5 million, compared with $81.1 million for 2007, was blamed on the competitive environment for commercial heatset print as well as costs associated with the integration of Times Printers in Australia, a process now nearing completion.

Despite the softer earnings figures from printing, PMP CEO, Brian Evans, (pictured) said the full year results left the company in a strong capital position with overall debt falling to its lowest level for several years. Overall debt is now $199 million, below the predicted $220 million, and Evans reaffirmed his belief that PMP will be substantially debt-free within the next couple of years.

The star performance of the year came in the distribution and fulfillment sector which saw earnings grow by 48.9 percent to $20.1 million on the back of a small 3.6 percent rise in revenues. In contrast, revenues for the digital premedia division fell by 21.7 percent to $38.6 million although Evans said he was comfortable with the result which saw earnings dip only slightly.

"The market for traditional premedia services has changed," he commented. "Our top-end photography is going fantastic and the management is in top shape."

Evans said he also expected a decision on the proposed ACP greenfield site within "weeks, not months". With current contracts due to expire in December, Evans said PMP was happy to continue printing for ACP "but only at the right price."

"We will continue to negotiate as we normally would and look after the interests of our shareholders," he said.

Despite the prospect of losing a major client such as ACP, Evans said there was still "plenty of work" to had in the market with print volumes up 15.4 percent for the year to 354,000 tonnes of paper, an additional 100,000 tonnes per annum compared to just four years ago.

With the company's financial position stabilised, Evans said PMP was now actively looking to acquire complementary businesses with the prospect of good opportunities to do so over the coming months, primarily in the fulfillment, publishing and knowledge sectors.

Overall, PMP's net profits rose 70.2 percent to $78.9 million thanks to a one-off windfall from the tax office; the underlying figure saw an increase in net profit of 7.6 percent to $52.3 million on the back of a 4.6 percent increase in revenue to $1.34 billion.