Profit before tax and interest was at $52.6m, slightly above PMP’s forecast of $48m-$52m. Its debt was reduced by a fifth, down to $194.8m from $247.1m. During the year PMP reduced its gearing significantly, to 179 per cent down from 351 per cent. No dividend was paid to shareholders.
The Group reported that print volumes were down by two per cent, and stated there had been poor management of pricing and production scheduling in the period prior to new CEO David Kirk’s arrival in March. Directories and books also suffered. The Show Ads business delivered ’disappointing’ EBIT, however the company believes the new restructure of Show Ads, now renamed PMP Digital (see page 21 this issue) and the new growth plan focused on digital workflow management services will enable PMP Digital to come good.
The results were broadly in line with analysts forecasts, resulting in a largely unchanged stock price of 95c, although that has doubled since Kirk replaced former CEO Bob Muscat just five months ago. Kirk admitted that restoring credibility to the market for the battered group was key, a process which he believed had begun with the announcement that the actual figures had met forecasts.
Focus for the year to come for PMP will be on cutting costs, with industry pundits speculating this may involve some rationalisation at some of the company’s web offset plants. Kirk said the company is not expecting any significant upswing in revenues, with the current climate stable and steady, but still featuring excess capacity. This has not been helped by PMP’s newest rivals; AIW, Argylle Times Graphic and Webstar, all of whom have put in new web presses in the past 12 months. New presses are also believed to have gone in at some of the more established competition as well.
CEO David Kirk says, “PMP’s cost and capital improvement projects are coming in on time and wihtin budget. Since joining PMP in March I have shifted the priority of PMP’s management from improving the balance sheet to improving the operating performance of the business.” Kirk said the 2002/3 figures were largely unaffected by the new approach. He also said that while the figures were in line with forecasts they are ’not an acceptable annual result.’ Forecast for next year is for a 30 per cent increase in EBIT to $65million.
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