The major sheetfed and web operation told the New Zealand Exchange (NZX) that the three months ending 31 March had seen “lower than expected earnings”, although this had been “partially offset by lower than projected levels of senor debt”.
During last year’s high stakes financial restructure, Blue Star had forecast EBITDA (earnings before interest, tax, depreciation and amortisation) of NZ$53.6 million for the full year to 30 June 2012 – a year-on-year growth of 26.5%.
The company has already revealed it expects to miss this target, but explained that there is a 15% buffer between its forecast and the figure it needs to hit to remain within covenant compliance with its lenders.
Phillip Bower, who replaced previous chief executive Chris Mitchell in November 2011, told ProPrint he had not been surprised by the market conditions during his first six months in the top job.
“The business and the market are as I expected, they are challenging but it is a great business.”
Bower said the industry faced both short-term and long-term challenges. “Clearly there are structural and cyclical issues. The economy is doing it tough no matter what industry you are involved with.
“The structural issues of the industry will bottom out – they may be bottomed already – and we are in situation that the [wider] economic issues are causing the challenges.”
The NZX announcement said Blue Star will “focus closely on cost reductions and revenue initiatives”.
On cost-cutting, Bower said: “A businesses is always ensuring its costs are inline with its revenue so that is what we will continue to do.”
He pointed out that Blue Star had some good news to tell, including customer wins for its ‘Velocity’ platform, which is based around the country’s first full-colour HP T300 inkjet web press.
“We’ve supplied some major campaigns for major customers producing products on that machine – and done exceedingly well.”
He also nodded to Webstar’s contract to produce magazines for ACP in New Zealand as a bright spot.
Meanwhile, former Blue Star head Chris Mitchell is now a partner at consulting giant PwC, according to his LinkedIn profile.
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