This is on top of the litigation with its former CEO Brian Evans and a seemingly rapidly diminishing catalogue distribution client list.

S&P has held to its BB-plus rating for PMP’s long term debt rating, but says the ratings outlook has gone down due to the ‘challenging market conditions’ in the printing and catalogue distribution markets.

S&P said in a statement on Tuesday that, “The outlook revision reflects our view of the increasingly challenging market conditions for the company and the Australian printing sector.” According to S&P the first half result at PMP reflected intense competition in the print market, and PMP’s vulnerability to adverse economic conditions. It warned its rating may be at risk. PMP’s first half figures showed a loss of $11.09m compared with a $68m profit in the same period in 2007.

S&P says, “Ongoing moderation in earnings, together with a bleak outlook for the print sector and potential weakening in PMP’s market position, could challenge PMP’s ability to maintain a financial profile supportive of the ‘BB-plus’ rating.”

PMP is already reeling from the sudden departure of its CEO Brian Evans last month, who is now suing the company for $1.56m. However of bigger concern to the company is growing customer unrest over its catalogue distribution activities, with a host of long time clients moving their business to arch rival Salmat over the past year, due to falling confidence in PMP’s distribution integrity. Woolworths and Coles have both made the move, while Myers has reportedly put PMP on notice.

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