Opus has made a 75 per cent smaller loss under its first six months of foreign ownership than the same time in 2013, with major staff cuts and improved wide format sales.
The company lost $8.8m for last July-December compared to $35.3m for the same period of 2013 and says with its debts paid off it can fully focus on serving clients and business growth.
Another goodwill and equipment impairment charge, this time of $29.1m, and $3.2m in restructuring costs were also major contributors to the loss, and EBIDTA fell 23 per cent to $5.4m.
Opus is 61 per cent owned by Hong Kong printer 1010 Printing after it last year bought Opus’ $51m debt to the Commonwealth Bank for $20m and forgave it in exchange for shares.
The move prompted huge immediate cost cuts where about 70 employees lost their jobs in a $3.5m downsize.
[Related: The ups and downs of Opus]
Revenue fell seven per cent to $58m, largely from the loss of book publishing client Penguin after its merger with Random House resulted in the whole contract going to PMP last February.
As a result, sales at its publishing arm fell nine per cent to $46.4m, well offsetting gains for its wide format company Cactus Imaging, which rose five per cent to $11.6m.
Chief executive Cliff Brigstocke says its remaining book printing is benefiting from the book market’s comeback and with new digital printers is well-positioned to capitalise on increasingly on-demand, last minute ordering.
“The trend of shorter runs, printed more frequently and ordered later continues to develop rapidly. We are well placed for ‘print on demand’ or ‘just in time’, which is clearly the future for our industry,” he says.
He says now that now Opus has a network of sites in China and Singapore, as well as Australia and New Zealand, it can win back work from overseas competitors.
Brigstocke says Cactus is benefiting from growth in outdoor media and gaining market share to become a major player in the industry.
He says recent investment in the latest Fuji Uvi star billboard printer “has significantly increased our efficiency, capacity and range of products we can produce – from highest quality backlit displays through to point-of sale-advertising”.
“We also invested in latex print technology which has expanded our capabilities, especially in the fast-growing transit signage sector,” he says.
[Related: More credit and debt news]
Brigstocke says the plan for growth is to offer bundled services to bring more value to customers around the region. It is also diversifying into non-print services like warehousing, e-books, websites, database mailing, and marketing.
He says access to 1010’s customers, suppliers, international experience, and buying power is already delivering results, along with economies of scale.
Opus is now debt-free other than a $2.1m finance lease and a $1.9m promissory note to CBA, the latter of which Opus paid on January 30, and is in net surplus by $3101.
Brigstocke says without the debt ‘shackles’ the company has been working under for the past two years, it is now fully focused on meeting customer requirements.
Opus has switched to a calendar-year reporting schedule for consistency with 1010 and will release its next annual report this time next year.
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