Poor print performance sees PMP profits plummet

Price pressure and restructuring costs takes its toll on PMP.

The print, distribution and media services group that has been unable to shake off its negative image after admitting faults in its distribution business along with the mysterious exit of former CEO, Brian Evans, took a further beating today with the release of its 2009 full-year results.

Earnings before significant items came in at $54.2 million, down 36.3 per cent on the previous year. Net debt was $208.4 million, below guidance of $220 million. According to PMP’s chairman. Graham Reaney, the results reflect “a turbulent and unsatisfactory year” for the company.

New CEO, and former chief financial officer, Richard Allely, (pictured) described the print market as “disappointing” with revenues falling 3.9 per cent to $696.4 million and a significant decline of print volumes in the fourth quarter.

“This, combined with substantial pressure pricing, led to EBIT falling 36.5 per cent to $41.6 million,” he said.

PMP’s letterbox distribution business also struggled, with earning declining 7.9 per cent to $7 million, compared to $7.6 million in the previous year.

Since his appointment as CEO in April this year, Allely has wasted no time in implementing a transformation plan for the company that saw the creation of a new management team, including the poaching of David Chesser from rival, Salmat, to take up the role of general manager for PMP distribution.

Allely is confident that these staff, and the transformation plan that has taken costs of $26 million out of the business, will steer PMP back in the right direction. “The business now has a strong leadership team,” he said. “This new structure will allow the business to both operate profitably in the current economic conditions and to prosper when the market improves.”

The potential for revenue growth in the coming year will be “limited”, Allely said. “Market conditions are expected to continue to be challenging throughout 2010,” said Allely. “We will continue to focus on reenergising PMP as a lean, efficient, customer-focused print, distribution and media services company.”