PMP has come out on top with net profit of $4.3m for the first half of FY15 compared to $800,000 in the same period last year, with EBIT down, debt down, and low margin work chopped. The market is reacting well to PMP’s performance as its share price has risen steeply by 17.5 per cent in the last four weeks to $0.49c, back to where it was before its precipitous fall in November. In the first half of FY sales fell by 7.7 per cent to $427.3m from $463m, however PMP says part of this was due to its decision not to re-sign low or negative margin catalogue work. PMP says its prices have stabilised, indicating an end to its price war.
Peter George, CEO of PMP
EBIT before significant items was down 4.8 per cent to $15.7m, although normalised EBUT before significant items was up $100,000 to $17m. PMP slashed its debt by 51 per cent down to $40m. Griffin Press delivered a big win with revenue up by 26 per cent on the back of significant contract wins. New Zealand also shone with EBIT up 17 per cent and sheetfed sales up by six per cent. PMP’s catalogue business volumes were down six per cent compared to the previous corresponding period, due to its decision not to re-sign negative and low margin contracts, which accounted for five per cent of the decline. Peter George PMP CEO says the company has delivered another solid result, in line with market expectations and he was ‘pleased to see the company return another bottom-line profit, with EBIT and EBITDA consistent with guidance’. George says, “The company is making steady and relentless progress towards it ultimate goal of delivering acceptable returns to its shareholders on a sustainable basis. Over the past few years PMP has gone through a period of major transformation as we have largely completed the first two of our three strategic priorities.” He says cost base reduction and financial risk minimisation resulted in a substantial reduction of costs and going forward the company is focusing on a process of continuous improvement. “Debt has been substantially reduced with net debt at June 2015 expected to be $17m-$22m providing the platform for the company to be net debt free by June 2016 in accordance with our three year goal.” PMP recently won a number of print and distribution contracts with annualised revenue of some $20m. George says, “We are improving our relevance to retailers who recognise the value of catalogues as an effective selling tool, either as a mass marketing medium or as part of a targeted campaign. Industry statistics reflect that catalogue volumes have remained stable when compared to 2009 levels at 7.9billion items a year.” He says the current subdued retail environment has encouraged retailers to experiment with how often they issue their catalogues and how many pages they contain as they identify the most appropriate mix for their business. “Nevertheless, while this has impacted catalogue distribution in the first half of fiscal 2015, catalogues continue to be a critical element of retail marketing and we expect this core part of our business to strengthen in line with the retail sector as it has done throughout previous economic cycles.”
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