The country’s biggest printer PMP had its new $77m distribution contract with Bauer Media to thank for keeping its sales figure at the same level as last year.
However the print giant saw its 2015/16 profit all but wiped out by the Dick Smith collapse and the termination of an old bond, Dick Smith cost the company around $6m, the end of the bond $2m, eliminating its $8m profit from last year, and giving the business a razor thin margin of $185,000 profit for the year.
The company described FY16 as ‘another year of patchy markets’ and said there had been a ‘higher than normal level of customer disruption / churn of contracts’.
Sales revenue was up by half a per cent to $816m with total revenue up by a third of a per cent to $820m. EBIT excluding significant items was down by 11 per cent of $3.1m to $23.2m while EBIT including significant items was down by 46 per cent to $11m.
EBITDA at $51.2m was down by $6.9m with the decline coming from PMP Australia and PMP New Zealand, although it was partially offset by lower corporate costs.
PMP Australia sales were down by $57.6m to $334.6m from $393m, although some $25m of that was due to a major customer buying its own paper. It also included a major contract loss at $13m, the final end of the Directories business at $8m, the $6m Dick Smith bad debt. Australian EBIT was down $1.6m. Griffin Press was hit with lower heatset sales and higher costs although it says these were mainly offset by tighter cost controls. Griffin will be an entirely digital business from 2017 on the back of its $3.2m a year lease deal for HP web and sheetfed printers.
Distribution business Gordon & Gotch saw sales rise strongly to $345.8m, up by a quarter with the revenues from Bauer offsetting lower sales from existing customers as magazines circulations continue to fall. EBIT was down by 22 per cent falling by $700,000 to $2.3m on the impact of those lower sales.
The company delivered some 7.4 billion catalogues during the year, down by 2.3 per cent on the previous year
The New Zealand business weighed on the figures with profits down by $2.6m following the loss of a major publishing contract, while sheetfed sales were down by 12 per cent, with sheetfed sell prices declining.
PMP CEO Peter George says, “The net cash position of $0.7m is a first for the company and contrasts favourably to the position four years ago when the company had $143m net debt.
“This achievement is a clear sign of our cash generating capability and the continued tight control undertaken over working capital and capital expenditure. In addition a new $40m corporate bond was issued which allowed us to repay the previous $50m bond, extend tenor and secure lower funding costs.”
PMP shares were down five per cent on the results.
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