Promentum pulls out of independent print management

This year has already seen a hefty amount of restructuring at Promentum with changes to its Queensland operations in particular delivering a sharp hit to its financial year profits. Now Ian Parker, chief executive officer of Promentum, has confirmed it will be closing the door on its RT Kelly venture and cutting short the three-year contract with its primary customer.

“After taking a close look at the RT Kelly business and defining exactly what it is that we offer as a group, it was a decision of the Promentum board to withdraw from the independent print management sector because it is not core to what we do,” says Parker.

According to Parker, the closure of the RT Kelly business is not an indication that Promentum is withdrawing from print management once and for all, as it will continue to offer such services internally through Penfold Buscombe.

“What we do still have is an excellent internal print management service that we provide as part of Penfold Buscombe. We are print managers, and that is part of our offering,” says Parker. “We want to stay focussed on what we do, which is quality end-to-end printing, and internal print management will continue to be a part of that.”

“We have transferred a lot of our learnings from the RT Kelly experience into our internal service and our customers will certainly benefit from that.”

While Promentum has declined to offer any direct opinions on the future of independent print management within the Australian industry, Parker says the board has “expressed a view in the decision we have taken.”

“I think there is room in the marketplace for independent print management providers, but I also think printers can do a much better job through direct relationships with their customers. It is more efficient and there is no middleman making margins at the expense of clients and printers.”

“Independent print management can be a profitable exercise, but the companies need to offer a number of other services beyond traditional print procurement in order to make their money. Otherwise it can be a very difficult environment to be working in.”

The news follows what has been a turbulent year for Promentum, characterised by heavy restructuring around the country, acquisitions and management shake-ups. Former CEO Alistair Hill left in July after 18 years of service, with management adviser Ian Parker appointed as interim chief executive as the search for a replacement gets underway.

The struggles of its Queensland operations were addressed through the closure of its manufacturing facility in Cairns and the shedding of 46 of its Queensland workers. These actions shaved $1.6 million from Promentum's bottom line along with other intangibles to the value of $2 million for the 2005/06 financial year, causing a plunge in profits to $6 million.

However, this restructuring was accompanied by the purchase of the Scanlon and Octane Printing companies in Brisbane for $12.1 million in cash and $2 million in shares, putting the company back in the top spot as the leading sheetfed provider in the state.