PMP made about $200,000 in net profit last year, compared to $8 million in financial year 2015, but CEO Peter George says the company is now debt-free - "a clear sign of our cash generating capability."
Australia's biggest printer blamed the fall in its profit for financial year 2016 on a range of factors including: bad debt from the collapse of Dick Smith; fees arising from a new corporate bond; higher than normal levels of customer disruption in its heatset print business, with heatset print revenues down 4.8% or $9 million; an 11 per cent fall in catalogue volumes and a 10 per cent fall in magazine volumes; and higher operational costs for its Griffin Press division.
PMP's sales were up by $4.3 million (0.5 per cent) to $816 million. Gordon & Gotch sales were up $77.3 million and Distribution Australia sales rose 3.3 per cent on higher volumes, but this was mostly offset by lower print sales at PMP Australia of $57.8 million.
CEO Peter George said it was important to note that the company was now debt free after posting a net debt of $143 million just four years ago.
"The company has delivered another strong cashflow result and it is encouraging that we have delivered on guidance for free cashflow and net debt...earnings before tax were slightly under full year guidance, due to lower than expected volumes from key heat set print customers and higher than anticipated operational costs at Griffin Press due to continued increase in demand for short-run on-demand printing.
"It was pleasing to see the successful integration at Gordon & Gotch Australia of the new magazine distribution contracts with Bauer, with sales up $77.3m pcp," George said in a statement to the ASX. "Higher volumes at both Distribution Australia and NZ were also welcome. The company has also invested in new digital equipment at Griffin Press to enable it to transition to a world class digital print platform.
"Our balance sheet continues to improve and the company is now net debt free. The net cash position of $0.7m is a first for the company and contrasts favourably to the position four years ago when the company had $143m net debt. This achievement is a clear sign of our cash generating capability and the continued tight control undertaken over working capital and capital expenditure."