The fall comes despite an increase in PMP print volumes, highlighting the
ultra competitive nature of the commercial heatset market. Brian Evans, CEO of
PMP put the slip in profit down to higher operating costs, which he says will
come through, "Adding volume on the core printing business coupled with
integration of the Times Printing acquisition."

Evans also expects full year earnings to be below those achieved last year,
although he gave no forecast of what this may be. Evans says that benefits from
the Times Printing integration will be felt from July this year. The company
says costs of relocation from Times will be around $6m.

PMP and the other commercial heatset printers are all currently living with
a degree of anxiety, as the nation's biggest magazine publisher ACP decides
whether or not to go ahead with building its own print plant. Fairfax
too is thought to be considering its heatset print options. An ACP print site
would hit the volumes of country's three biggest printers; PMP, IPMG and Blue
Star. Starting a new print site from scratch would be an ambitious project, but
industry insiders tell Australian Printer if ACP paid enough they would have no
trouble luring managers.

ACP prints a combined 114 million copies of its 85
titles a year at a cost of about $100m, with PMP the biggest supplier.

Ian Law, CEO at ACP parent PBL recently told the Australian Financial Review that the company was currently engaged
in a review of the economic benefits of establishing its plant and would reach
a conclusion on it 'shortly'. Until PBL makes its decision the commercial
heatset industry remains in a state of limbo.

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