The company says the drop in print revenue was driven by lower volumes in its heatset printing operation (down 2.7 per cent) and in its directory printing business (down 42.6 per cent).
Overall group operating revenue fell 7 per cent to $577.5m, down from $621.9 the year before. Net debt increased to $153m due largely to lower economic activity, payments associated with the NZ transformation programme and the deposit paid for the new WA press.
A statement from PMP outlines that trading activity in November and December 2011 deteriorated and was lower than management’s expectations. This lower performance resulted in a revised full year EBIT forecast of $43m to $47m before significant items. PMP management says it has responded to the weaker conditions with further cost reduction initiatives.
According to PMP, the New Zealand transformation programme, which targeted annual savings of NZ$18m, is now largely complete and the full impact of the savings will flow through in the 4th quarter of this financial year.
As part of the capital management programme, PMP continued its on-market share buyback and, in the period under review, purchased 3.22 million shares at an average price of $0.49 per share.
A statement from company directors says, “As a consequence of the poor trading environment in the first half of the year and our expectation that this weakness will continue in the second half of the year, a further round of cost reductions is planned.”
PMP incurred $5.1m of significant items in the first half, $2.8m which was predominantly around redundancies and $2.3m goodwill write off associated with the G&G NZ business.
Directors are expecting an additional $8m of restructuring costs in the second half of the year, primarily relating to redundancies.
Looking ahead, Richard Allely ,CEO of PMP says, “given our expectation of tough market conditions in the second half of the year we expect full year EBIT (before significant items) to be in the range of $43m-$47m, and net debt of approximately $140m as at June 2012.”
Despite the drop in revenue, PMP Directors have still declared an interim dividend of $0.01 per share fully franked.
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