
The print giant has now started what it calls the second and final phase of an Australian transformation plan that is forecast to generate more than $40 million in annual savings.
PMP said its press fleet would be reduced from 21 to 15 presses and a yet-to-be-determined number of jobs would be cut.
That would be on top of the 311 jobs PMP said it had already cut – 114 in Australia and 197 in New Zealand.
The transformation plan will also demand $6 million worth of building modifications and another $29 million of one-off costs, mostly for redundancies, said PMP.
The latest plans follow assurances from chief executive Richard Allely a year ago that “in fiscal 2012, we are not doing any more restructuring. We have done our restructuring.”
PMP also announced yesterday it expected to pocket at least $75 million by selling its sites in Australia and New Zealand, which will then be leased back.
Most of the proceeds will go to paying off its debt, with the balance to help fund the transformation.
PMP said it had negotiated an increase in its debt facility to $190 million to help with the restructuring.
The restructure will produce “significantly reduced” costs, increased press utilisation and greater speed to market, according to PMP.
PMP has met once with the Australian Manufacturing Workers Union to discuss the job losses and will hold another meeting in a fortnight, said the union’s national print division secretary, Lorraine Cassin.
“Our members have over the last 10 years been through many restructures with PMP,” she told ProPrint.
“At this stage all I can say is PMP are consulting with the AMWU as per our agreements. It is our intention to ensure that we try to mitigate as many job losses as possible.”
PMP posted a net loss of $24.5 million for the 12 months to 30 June 2012, slumping 117% year on year.
One-off items related to restructuring pulled it into a full-year loss; it booked $41.1 million of one-off costs, including $9.1 million in redundancy payments and $29.5 million in write-downs.
However, the group pointed out it would have made an $8.8 million net profit if not for the exceptional charges.
Revenue fell 8.7% to $1.1 billion, net debt worsened 1.6% to $143 million and the return on funds employed fell 4.1 points to 6.8%.
PMP attributed its red ink to the loss of the Pacific Magazines contract, tough retail conditions and reduced volumes.
Volumes fell for magazines (14.7%), print (9.5%) and letterboxes (4%).
One positive was a 3% rise in Australian book volumes thanks in part to the massive success of Fifty Shades of Grey.
In other news, chairman Ian Fraser will step down after November’s annual general meeting, four months shy of his 10-year term limit.
Click here to read about the ups and downs of PMP.
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