PMP has revised its profits guidance downwards for the HY18, and FY18, citing market factors relating to the mix of work.
The new guidance advises EBITDA, unaudited, and pre-significant items, is $20.2m for the first half of 2018, $4m below PMP’s expectations.
The share market has responded unfavourably following the announcement, with PMP’s share price dropping from 47c to 35c, its biggest fall since it first revised its FY18 guidance from $100m to $75m in November last year when the share value plummeted by almost a third.
The original revised guidance announcement, which coincided with former CEO Peter George stepping down early due to a family bereavement, saw the stock price tumble from 76c to 50c.
Australian Printer contacted PMP to ask when a new CEO is expected to be elected, and was told the process is still underway, with no definitive date given.
PMP says, “Based on the three months trading since the previous guidance, and its latest forecast for the second half of FY 2018, the revised guidance for the FY18 is now $40m-$45m EBITDA, before significant items.
“Whilst overall Australian print volumes are in line with what has previously underpinned guidance, and noting that all cost initiatives are largely being met, the revised guidance is driven by a reduction in expected volumes of higher margin magazines and newspapers, offset by higher than expected volumes of lower margin catalogues.
“All other business units within PMP are performing largely in line with previous guidance.
“Whilst PMP remains confident that the changes to industry structure and its continued focus on costs will provide the opportunity to improve profitability over the medium term, it recognises the ongoing challenging conditions in the retail, publishing and newspaper industries. As such, guidance for FY19 will be provided at the appropriate time. Notwithstanding this, previously reported cost out initiatives are expected to provide circa $20m-$25m in annualised savings in FY19.”
The company says net debt at June 2018 is now expected to be $35m-$40m, up from its November guidance of $30m-$35m, and that the $10m reduction in EBITDA has been partially offset by $5m favourable outcomes in working capital, capital expenditure and significant items.
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