Printer Shares Its Slump In Profits
The Age
Saturday November 8, 2008
PRINTING company PMP has warned its shareholders they can expect dividends only once a year and at low levels as it braces for tougher times ahead.
The company flagged its 2008-09 pretax earnings will fall from last year's $85.1million because of problems integrating its acquisition of Times Printers in Melbourne and sluggish demand in New Zealand.Earnings are down by $6million in the first four months.How much profit will drop "will be determined by the extent of the economic slowdown", PMP chairman Graham Reaney told shareholders in Sydney yesterday.The company has brought in external consultants to target cost cuts and find ways to make up for falling volumes.PMP shares closed 5 lower at $1.02, down 43.5% this year. Mr Reaney declined to comment on the timing of $427,000 worth of share sales by his family company last month.Shareholders will receive just 2 to 3 in annual dividends for the foreseeable future. PMP paid out 4.5 last year, having only started dividends again in 2007 following a five-year suspension. Shareholders criticised the new payout policy. "Some of us have been very long-suffering shareholders, we have been going without dividends for many years," one said.PMP bought Times Printers from Singapore's Times Publishing last year. PMP chief executive Brian Evans told BusinessDay the company had struggled moving the Times equipment to its Clayton plant as order volumes came in stronger than expected during the transition.While contracts in New Zealand have suffered from that country's recession, PMP was still feeling "strong demand" in Australia leading into Christmas, he said.PMP is in talks with retailers such as Harvey Norman, which has flagged a 20% cut in its ad budget, to cut page sizes and find other ways to lower costs.Asked about the move by important client ACP Magazines to build its own printing plant, Mr Reaney said it was not a certainty that would happen.
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