While the Group posted a 22 per cent drop in sales revenue from $478m to $373m, it reported earnings of $7.8m, a 6.2 per cent increase on 2009 figures. The company has also reduced its net debt to $35.8m, compared with $69.8m the previous year.

A directors’ statement from CPI outlined that notwithstanding the difficult trading conditions, the Group achieved a number of significant milestones, including:

• Completion of the sale of assets related to the conventional printing equipment business.

• Renewal of the Group’s finance facilities with GE for a further three years.

• Consolidation of all business units in South Australia into a single site, including warehousing.

• Establishing a lower cost base for the business going forward.

• Gaining preferred supplier status with key major customers.

The directors’ report continues, “Our suppliers implemented price increases during the first nine months of the year, which up to the last quarter were largely offset by the strengthening Australian dollar.

“In repose to the difficult trading conditions the Group continued to maintain a very strong focus on cost control. Recurring costs for the year were 14 per cent below the 2009 financial year.”

The company also outlined that during the second half of the year, the printing industry experienced an unprecedented level of failures, which had an impact on the Group’s bottom line.

The directors report states, “As a major supplier to the industry CPI was affected by these failures. The majority of exposures were covered by debter’s insurance or security. Those that were insured can be substantially recovered through the policy.”

CPI outlined that the most significant of the uninsured failures is that of collapsed printer Quality Group, where the potential exposure is $3.1m.

Directors concluded, “CPI continues to examine its activities and opportunities to improve its financial stability so as to deliver value to its shareholders. The paper industry remains extremely competitive in particular in Australia, with robust competition and low selling prices.”

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