The company says this is a 14.6 per cent increase in ebitdar from the 12 months to 30 June 2009. However, sales revenues for the year were $569.2 million, a decline of 1.5 per cent over the prior year.
Chris Mitchell, managing director Blue Star Group, says the company improved its financial performance in spite of the challenging conditions the print industry continued to face, particularly in the sheetfed divisions in New Zealand and Australia. He says, “The result is encouraging and a clear demonstration of the viability of the strategies implemented by management to create a robust platform in the current business environment.”
The company continued its strength in the web, label and print management businesses. Mitchell says, “These divisions have responded well to investment in recent years as well as management initiatives and are all positioned very strongly in their respective markets. Management sees further opportunities to develop and grow in these parts of the business over the coming year.
“One specific example of the positive performance of the web division was the winning of the ACP Media New Zealand printing contract covering all ACP’s consumer magazines, trade press and the coveted New Zealand Property Press. Consumer magazine titles include Metro, Next, North & South, Woman’s Day, and The Australian Women’s Weekly. While this contract will have little impact on financial performance in 2011, it will strengthen the overall business going forward.”
Blue Star says the global financial crisis has most impacted the sheetfed printing operations, which make up approximately 44 per cent of group revenues and operate throughout New Zealand and Australia, resulting in reduced print volumes, market over-capacity and resultant margin compression. It notes a number of business failures in this sector, particularly in Australia. Mitchell says, “Blue Star Group has responded, as indicated in the 2009 Annual Report, by actioning significant cost reduction programmes and implementing major operational enhancements to adapt to the changing environment.”
Blue Star Group Holdings, the parent of Blue Star and its subsidiaries, reported a senior debt net of cash balances reducing by $12.9 million during the period. The company says that overall net debt levels, inclusive of accrued interest on the subordinated capital bonds, are in line with the previous year. Despite this progress, interest payments to bondholders remains in suspension. Interest will continue to accrue to investors at the step-up interest rate of 13.1 per cent per annum compounded quarterly.
Mitchell concludes, “Significant steps have been made to improve Blue Star Group and reposition the business so as to meet the challenges facing the print industry. Whilst there is reason to be optimistic there is no quick fix. Blue Star’s strong market position, its solid cashflow conversion, modern asset base, loyal customers and the commitment of its staff alongside the ongoing support of Blue Star’s shareholders and lenders, have all combined to provide Blue Star with an environment which is conducive to ongoing transformation.”
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