Masters print work up in the air

Printers could lose work worth millions of dollars as owners consider pulling the plug on loss-making hardware chain Masters.

A $3.3bn joint venture between Woolworths and US hardware giant Lowes, Masters has lost $600m in six years, and is bleeding $50m a quarter with profitability not expected for another four years.

Masters print work is worth about $7m a year for the wide format component alone, plus a 28-page catalogue printed by PMP with a print run of 3.3 million just in NSW.

The wide format contract was previously held by Sumo Visual and provided 30 per cent of its turnover until it collapsed late last year.

[Related: More print buying news]

According to the Sydney Morning Herald, Lowes has an out option from yesterday onwards that would force Woolworths to either buy out its one third stake for more than $800m or wind up the business.

Analysts quoted in the article believe Woolworths is highly unlikely to continue running Masters by itself, given it would need $200m in cash injections a year to stay afloat and losses blew out from $176m to $245m in 2015.

Even if Woolworths did elect to keep the company going, it would likely close some stores to help pay for the buyout, cutting the amount of print Masters would need.

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