PMP profits surge 87%, though ‘loss of trust’ hits distribution arm

The publicly listed company’s net profits before significant items were $15.7m, an 87% year-on-year gain compared to an $8.4m net profit in the six months to December 2008.

After-tax profits were $13.7m, a marked improvement on 2008’s $11.2m loss, which had been dragged down by a $28.1m significant item charge as the company restructured.

The company’s earnings before significant items (EBIT) declined 12.6% year-on-year to $29.1m for first half of the current financial year.

PMP Print revenues fell 13.2% to $269.5m. Chief executive Richard Allely (pictured) put this down to a 14.7% decline in print volumes over the half-year.

The Distribution division was the hardest hit, recording an EBIT decline of 65.7% to $1.5m.

“The operating result for the six months to December 2009 reflects the legacy the business has endured in losing touch with its customers, forfeiting their trust and consequently losing market share,” the company said in a statement.

Last year, the company was forced to own up to “irregularities” in its Distribution business, admitting it had supplied customers with incorrect delivery statistics, following an inquiry by the ACCC.

Gordon & Gotch, the company’s magazine distribution division, recorded an EBIT of $4.4m, down 45.7% on the previous year. PMP attributed this to “a drop in book distribution and unfavourable foreign exchange impact”.

PMP Limited managed to reduce its debt by $24.6m, down to $183.8m by the end of 2009 after reporting a $208.4m net debt in June 2009.

Allely said he expected the company to deliver EBIT $52m-$55m for the 09/10 financial year.

“With a continued focus on supply chain management, sales force alignment and manufacturing excellence, PMP is rapidly improving its competitive position,” he said.

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