The country’s biggest print company PMP has secured a new low interest bond, which will save the company $900,000 a year. The $40m bond, which is for four years, at 6.43 per cent interest rate will be used to pay off its current higher interest debt facility, and has less restrictive terms that give PMP more flexibility.

Peter George, CEO of PMP

Peter George, CEO of PMP, says the bond is used to finance operations before the busy Christmas period kicks in, and could also be used to fund future acquisitions. However, as PMP does not have any foreseeable takeover targets, it will instead return all of its profit to shareholders every year, 75 per cent in dividends and the rest with share buybacks. George says, “We continue to believe that consolidation of the print industry should occur in the longer term, but with little prospect of this occurring in the immediate future, it is appropriate to return excess cash back to shareholders. “As free cash flow is greater than NPAT pre significant items, the balance of cash will be retained in the business to facilitate the eventual repayment of the bond and/or industry consolidation.” PMP will start with a $6.2m share buyback from November 23 as a retrospective payment from FY15, with future dividends to be made each half-year. George says that since the company is giving more profit to shareholders it will take longer for the company to be debt free than its target of the end of FY16. “PMP’s capital management program highlights our higher degree of confidence in the company’s outlook,” he says. PMP made a $12.1m profit before significant items and has already paid out about $6m in dividends. It made an $8m profit after $6m in net significant items, including $5.7 in redundancies.

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