PMP share price slashed as presses run full

The suits’ attack on PMP came when the company announced it as revising downward its profit forecast for the year by $12m. PMP chief executive David Kirk said that the reason was that the company had miscalculated its printing capacity, with the restructuring that the company is currently going through “reducing capacity more than previously expected”. This has meant that virtually all existing press capacity is currently taken with its contract and retail printing, which are low margin jobs, leaving no room for the high margin spot work. Kirk says, “We are simply not able to process the volume of work in the six month period that we had previously forecast.”

In its latest restructuring PMP recently closed its Koo Wee Rup site in Victoria, with South Australia thought to be next in line for closure.

PMP is though currently implementing a $124m investment programme, the bulk of which is $100m worth of MAN Roland web presses. This includes two 64pp MAN Lithomans capable of pumping out two million A4 pages an hour each, they should be operating by the end of the year.

Heatset web offset printers are currently enjoying their best times in years, and the knowledge that PMP’s presses are currently full will give further cause for joy to rivals IPMG, Franklin, Cadillac, AIW, Argyle Times Graphic and Webstar, with print prices certain to command further premiums. Print buyers are already struggling to find time on any web offset press before July.

The share price drop is the first real reversal for PMP since Kirk took over three years ago. At that point share price was just 40c, but since then the price has been on a consistent rise.

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