Paperlinx will change its name to Spicers and focus on higher margin paper and wide format sales, with acquisition targets already lined up.
Shareholders overwhelmingly voted to change the merchant’s name to Spicers and to retain Robert Kaye as chairman at Friday’s annual general meeting.
Kaye explained the company’s disastrous European collapse and says it is now focused exclusively on the ‘viable, well-managed businesses in ANZA’.
“While the company now has a smaller geographic footprint, more importantly it has a profitable platform from which to implement its strategy to become a broader wholesale and distribution business,” he says.
“Continued diversification is essential for future sustainability.”
[Related: The ups and downs of Paperlinx]
Chief executive Andy Preece says the plan is to ‘rightsize’ the commercial paper business and increase efforts to diversify into areas that 'provide higher margins and greater returns on investment’.
These include speciality paper for the wide format, packaging, labels, and inkjet markets and ‘rapid’ expansion of its wide format hardware reselling operations.
Preece says the merchant will expand in these areas through both organic growth and acquisition and has already identified multiple targets in Australia and NZ.
He says Paperlinx cannot provide full-year financial guidance to shareholders as paper market conditions continue to be ‘very challenging’.
While no numbers were disclosed, Preece says Australian performance in Q1 2016 was impacted by currency but margin benefits from the paper price hike earlier this month are beginning to show.
Paperlinx now has 460 staff working at 23 sites in 7 countries including Australia, NZ, Singapore, Malaysia, Vietnam, Hong Kong and Shanghai.
Kaye also addressed the ongoing issue with the hybrid shareholders, saying Paperlinx hopes to reach an agreement ‘with goodwill on behalf of all parties’.
“We look forward to having constructive dialogue with various stakeholders to see if there is a joint mandate of support for a way forward over the next 12 months,” he says.
Kaye again rejected allegations by hedge fund Blue Pacific that the merchant had breached its agreement with hybrid shareholders, and says it will fight any attempts to force conversion of the shares.
Paperlinx shares fell five per cent on Friday following the AGM, but are up almost 17 per cent to 4.2c so far today – its highest price since last November.
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