Profit hike for Promentum as PMP integration gets underway

Increased competitive pressure in Queensland cut into Promentum's market share, the results reinforcing industry reports of a massive price war being fought in the northern markets.

Promentum claims in the report that its recent acquisition of PMP's sheetfed business will place it in the position to win a greater share of the Queensland business. This also relies on the commissioning of a greenfield printing site at Ormeau south of Brisbane, which will allow the PMP and Penfold Buscombe printing business to be consolidated. If this goes ahead, Promentum claims it will be the largest printer in the Brisbane market. It cautions that the benefits of integrating PMP sheetfed operations will take some time to come to fruition.

The company reports strong growth in the Victorian print market, while its NSW share stayed steady. The half-year report also incorporated the first full period of sales revenue from the Pongrass acquisition.

Capital expenditure during the period focused on the installation of a new 10-colour Heidelberg press in Victoria worth $4.4 million.

In a move away from the practice of disappearing the names of companies it acquires under the Penfold Buscombe brand, previous incarnation, RT Kelly, is now re-established as a provider of complete outsourcing solutions. A print management contract for the new entity with Suncorp Metway began in January.

The company points out that the Australian sheet-fed market is still highly fragmented, citing the PMP and Pongrass acquisitions as indicative of the opportunities for strategic acquisitions. Promentum claims it is in a strong financial position to pursue further opportunities, not necessarily in printing. We will also consider businesses which are aligned to print that will expand our service offering and increase our scale.