Paper merchant Paperlinx will no longer exist by that name and will be called Spicers, as it moves back to Australia, New Zealand and Asian operations only. The move comes as the merchant reveals it lost a whopping $300m in European operations in the 2015 financial year leading to the unravelling of its once mighty European business. It has now virtually completed its exit from Europe with only its German merchant left to sell off.
Andy Preece, chief executive of Paperlinx
The company will vote on October 23, to change its name to Spicers, its ANZA business, which also saw profits slump by 59 per cent in 2015. Total losses for Paperlinx in the 2015 financial year was $392.3m, including $300.3m from losses and writeoffs in Europe and a $64.6m hit on the sale of Spicers Canada. Total revenue for Paperlinx fell by 29 per cent to just over $2bn, but only $556m of from continuing operations, which themselves are down 15 per cent. Paperlinx now has $128.7m in net assets, down 59 per cent, following its exit from Europe. The market reacted strongly to the somewhat expected announcement, sending Paperlinx shares soaring by 11 per cent, up to 2.6c. The company is now focused on its profitable Spicers business, although that profit is down by more than half to $5.4m in 2015 compared with the previous year. The Asia Pacific operation had sales of $404m, down five per cent, with EBIT down four per cent to $14.7m, with weaker than expected demand in commercial print paper. However, the sales from its diversified business – including wide format equipment, consumables, packaging materials, software, and accessories – is up 33 per cent to $60.9m with a 36 per cent better margin. Andy Preece, chief executive of Paperlinx, says Spicers, which he headed before his promotion to Paperlinx CEO, is solid and sustainable with potential for growth. Preece says, “Our ANZA businesses have been adapting to changing circumstances for a number of years, making the necessary, hard decisions along the way to right-size costs and invest in new areas like sign and display. “These businesses are now in good shape and provide a solid foundation for the group to recover its momentum and pursue prudent opportunities to further diversify and grow.”
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