The publicly listed group reported a profit after significant items of $20.6m, a huge rise from 2008/09 when the costs of its “transformation plan” helped drive it to a $26.6m loss after significant items.
PMP’s Print division posted earnings before interest, tax and significant items (EBIT) of $47.7m, a 39.3% increase despite a fall in revenue of 13.4%.
This drop in revenue was in line with a volume reduction of 13.7% year-on-year.
Chief executive Richard Allely told ProPrint: “I’m really delighted at our EBIT percentage in Print.
“We have made conscious decision to walk away from work that doesn’t deliver the right profitability,” he added.
PMP also wiped $40.2m off its net debt, down from $208.3m to $168.1m.
Operating revenue was down 9.9% year-on-year from $1.35bn to $1.21bn. Allely said losses in its Distribution division were largely to blame for the revenue drop.
“This is what happens when you disappoint customers,” he said.
In 2009, PMP Distribution lost contracts, including major client Coles, following an ACCC investigation that found “irregularities” in the division over 2007-08.
However, Allely said Distribution was now back on track, pointing to the recent win of Target’s distribution contract from rival Salmat.
“We are satisfying one of the toughest taskmasters, which is Target. They measure everything. They set benchmarks for everything and we are exceeding all of them,” he said.
Today’s announcement is a significant shift compared with the 2009 results, when chairman Graham Reaney admitted “the results reflect a turbulent and unsatisfactory year for PMP”.
Allely said the uplift was due to PMP’s “transformation plan” rather than any improvement in the market.
“I haven’t seen a market recovery really. [There has been] a little advertising market recovery but that has helped publishers rather than printers.”
The transformation plan included a complete overhaul of the PMP executive team, and contributed to restructuring costs, redundancies and asset write-downs totalling $65.2m in the 2009 fiscal year.
“Our transformation plan was, quite frankly, run by people who knew what they were doing. Every start and finish date was managed to precision.”
Allely added that the strategy had shown results because every step was “hard-wired by taking a certain action, we absolutely knew the impact on the bottom line”.
He confirmed that the Australian restructure was a case of cut deep but cut once, with no more major changes planned for the foreseeable future.
However, Allely said: “I did flag the opportunity for a strategic review in New Zealand for further opportunities to improve or reduce the cost base of that operation.”
“It’s early days, but the timing is right to stand back and have a very good strategic look at whether we have the right model,” he said, adding that this would not be on the scale seen across the Australian operations.
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