PMP plans further cost cutting as sales, earnings slide   16 Feb 2012

Hannah Lynch

PMP, the ASX-listed magazine printing and distribution company, is embarking on another round of cost cuts after operating earnings tumbled by almost a third in the first half.

Earnings before interest and tax, excluding significant items, dropped 28 percent to A$23.1 million. Sales fell 7.1 percent A$577.5 million. The company turned to a net profit of A$4.6 million from a loss of A$14.8 million in the previous year, when it took an A$19.2 million charge to write down book distributer Scribo.

“As a consequence of the poor trading environment in the first half of the year and our expectation that this weakness will continue in the second half of the year, a further round of cost reductions as planned,” said Richard Alley, chief executive. “We expect full year EBIT (before significant items) to be in the range of A$43 million to A$47 million.”

Earlier this month the printing company wrote down its New Zealand printing business, Gordon and Gotch, by A$2.2 million, citing weak market conditions. New Zealand sales fell 7.1 percent for the six months ended Dec.31, while EBIT before significant items dropped A$1.4 million from A$2.1 million.

In Australia, revenue was down 2.9 percent, driven by lower volumes in heatset printing operations and directory printing. ETIB also fell 23 percent to A$23.1 million, when compared with the same period a year earlier.

The directors declared a first-half dividend of 1 cent a share.

Its shares are currently trading on the ASX for 42.5 Australian cents.

(BusinessDesk)

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