PMP CEO Richard Allely says the company and said it would begin a new round of restructuring as a result of the downgrade. PMP’s share price dropped by 10 per cent on the news to 44c. PMP will report its half-year results on February 16.

The company, which lost the printing contract for Seven West Media’s Pacific Magazines ion the December half says the print markets in Australia and New Zealand had weakened as existing customers reduced their orders, intensifying competition for new contracts, with margins being cut margins. Chairman Graham Reaney says, “Volatility continued into December with poor volumes in the core printing business in Australia.”

The company’s EBIT for the first half to December was expected to be $22.5m-$23.5m, which about $2m lower than expected at the time of the annual meeting. Allely says, “This reduction was primarily driven by lower revenues.”

The latest round of restructuring programs will cost around $5m. The company also warned that additional significant items of up to $8m were likely to be incurred in the second half, but further warned that this figure could alter if markets continue to deteriorate.

The company reiterated that its balance sheet remains strong and said net debt at year end is expected to be in line with previous guidance, ie slightly lower than fiscal 2011.

In the 2010-11 year PMP recorded an $11.3m full-year net loss after its bottom line was hit by $52m in charges. Income slipped by 1.5 per cent to $1.19bn.

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