The company reported $65.2m in significant items, largely due to redundancies, restructuring costs and asset write downs. PMP’s net profit before significant items decreased 61 per cent to $18.2m.
Overall sales revenue was virtually identical to last year, down 0.1 per cent at $1.35bn, indicating the company has spent the year operating on lower margins.
PMP ended the year with net bank debt of $208.4m, up from $199.6m in June 2008 after a year that included acquiring the Scribo business and large restructuring costs.
Richard Allely, CEO of PMP says, “Market conditions are expected to continue to be challenging throughout 2010. We will therefore continue to focus on re-energising PMP as a lean, efficient, customer-focused print, distribution and media services company.”
The company print division had a disappointing year, with revenues falling 3.9 per cent to $696.4m after print volumes declined significantly in the fourth quarter. This, combined with substantial pressure on pricing, led to EBIT falling 36.5 per cent to $41.6m.
Moreover, PMP’s letterbox distribution business struggled, following significant customer service issues, leading to a reduction in market share. This resulted in EBIT declining 7.9 per cent to $7.0m compared to $7.6m in the previous year.
Allely says that, while the potential for revenue growth will be limited in the year ahead, PMP will continue to optimise the business and look for efficiency opportunities to deliver earnings growth.
He says, “Phase one of our transformation program, which was completed at year end, saw significant cost cutting across the business. Phase II began in July 2009, creating a low-cost, customer-focused operating model focusing on improving earnings by making the business substantially less complex.”
Allely concludes, “Beyond fiscal 2010, the PMP has enormous potential to generate good cash flows to pay down debt and reward our shareholders.”
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