PMP will save $900,000 a year, give twice as much back to shareholders and ready itself for acquisitions after securing a new bond at a lower interest rate.

The four-year, $40m bond at 6.43 per cent interest will be used to pay off its current higher interest debt facility and has less restrictive terms that give PMP more flexibility.

Chief executive Peter George says the bond is used to finance operations before the busy Christmas period kicks in, and could be used to fund future acquisitions.

However, as PMP does not have any foreseeable takeover targets, it will instead return all of its profit to shareholders every year, 75 per cent in dividends and the rest with share buybacks.

“We continue to believe that consolidation of the print industry should occur in the longer term, but with little prospect of this occurring in the immediate future, it is appropriate to return excess cash back to shareholders,” George says.

“As free cash flow is greater than NPAT pre significant items, the balance of cash will be retained in the business to facilitate the eventual repayment of the bond and/or industry consolidation.”

PMP will start with a $6.2m share buyback from November 23 as a retrospective payment from FY15, with future dividends to be made each half-year.

As the company is paying out more profit to shareholders, George says it will take ‘slightly longer’ to be debt free than its target of the end of FY16.

“PMP’s capital management program highlights our higher degree of confidence in the company’s outlook.”

PMP made a $12.1m profit before significant items and has already paid out about $6m in dividends. It made an $8m profit after $6m in net significant items, including $5.7 in redundancies.

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