However, the country’s second largest print group expects a turnaround once its new 12.8-hectare Warwick Farm site is up and running in early 2013.
IPMG saw revenues fall 7.9% to $450.4 million for the 12 months ending 30 June 2012. Profits fell $21.5 million from a net profit of $4.2 million last year to a full-year loss of $17.3 million.
It blamed almost half the fall in revenues on its decision to shut down two operations, Craft, which had been part of Craft Inprint, and Sync Communications, its print management arm that had once held the Qantas account.
IPMG chief executive Stephen Anstice said in a statement: “The closure of Craft and relocation of Hannanprint have negatively impacted on FY12 profitability as significant redundancy, relocation, double occupancy and make-good costs have been incurred.”
Tough trading conditions and falling print volumes have also hit hard.
[Related: Hannanprint to get country’s first 96pp Manroland]
Anstice said: “The reduction in print revenue has had a direct impact on profitability in FY12. We have managed to reduce some costs to deal with this reduced revenue but many of the costs in the print business are fixed and we have been unable to increase our pricing.”
However, the group is banking on short-term pain for long-term gain, as it becomes an even greater force in the market when it completes its $90 million move to the purpose-built Warwick Farm plant.
Warwick farm will house four web presses, including the flagship machine, a newly commissioned 96pp twin-web Manroland Lithoman.
The highly efficient and automated machinery should boost margins despite the price pressure, but whether this would mean IPMG taking lower prices out to market or beefing up its margins is yet to be seen.
“We knew when we made the decision to close Craft and relocate Hannanprint to Warwick Farm [that] we would face two expensive and challenging years to profitably meet the needs of our clients with a well-quipped, efficient and versatile print facility,” according to Anstice’s statement.
[Related: Ups and downs of IPMG]
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