Salmat stung by swing to online

Print’s battle against online takes another battering as marketing services provider, Salmat, reports lower mail volumes and a decline in revenue for its Business Process Outsourcing division.

In its results for the half-year ending 31 December 2010, Salmat’s Business Process Outsourcing division reported an 8.7 per cent drop in revenue at $162.9 million, down from $178.5 million. BPO earnings were also down from $22.4 million to $21.9 million. All up, Salmat reported sales revenue of $447.6 million, which was down 0.5 per cent against the prior corresponding period.

According to CEO, Grant Harrod (pictured), the decrease mainly resulted from lower mail volumes that flowed through from the second-half of 2010. “Mail volumes were impacted by the subtle shift to electronic presentment, but also slower performance in the key financial markets sector, due to an absence of major shareholder communication activities, such as IPOs in the period,” he said.

A spokesman from Salmat told Print21 that the company expects there will continue to be a "subtle decline" in mail volumes. "However, this decline may slow as organisations realise the power of statements as a communications and marketing tool," he said.

Harrod, however, believes that the BPO division is “definitely making progress”, listing the HPA acquisition from 2007 as key. “We are still uncovering synergy benefits [from it],” he said.

Last year, Salmat integrated its Victorian operations into a single new facility, along with the installation of two new presses from Oce – one of which is installed in Victoria and the other in New South Wales. “A refresh of BPO’s colour business to install market-leading print technologies will be finalised in the second-half and should contribute approximately $2.8 million in annualised gross savings from FY 2012.”

Demonstrating a major commitment to print, Salmat last year announced the launch of an online portal that allows small-to-medium enterprises (SME) to design, print and distribute marketing collateral. The site went live in January this year and is, according to Harrod, experiencing a good take up.

“Already, we are seeing strong volume gains amongst LDN clients,” Harrod said. “Additional services will be added to the portal by mid-2011 and we have built a dedicated SME sales team to target this market.”

Catalogues keep on growing

One printed product that is still holding its own for Salmat is catalogues, which grew a further 2.4 per cent to 2.6 billion. This growth comes on the back of last year’s results where Salmat experienced an 11 per cent increase in catalogues.

“On the back of the GFC, retailers turned to a medium they trust and that they know gets the results. Catalogue continues to reward the retailers investment and so retailers will continue to invest more,” said a Salmat spokesman.

CEO of the Australian Catalogue Association, Ken Bishop, (pictured) believes that this growth is consistent with the industry overall. “We’re in quite a healthy space at present,” he said.

Bishop believes the main reason for this is simply because catalogues are effective. “Consumers love them,” he said. “People are still looking for bargains and they’re an effective medium which store and brand owners find are a great way to communicate with their customers.”