Trans Tasman printing group PMP has survived three years of plunging sales, disappearing profits and big write downs and forecasts of the ‘end of’ its key product, company brochures and magazines printing, and says will resume paying dividends to shareholders and could launch a share buyback .
The company told the ASX yesterday that it had enjoyed solid earnings growth in the financial year finishing on June 30.
PMP said it expects underlying full year earnings will be in the middle of its previously forecast range of $25 million-$26 million, with its debt falling to just $19 million. The company reported a $4.3 million net profit for the December half of the 2014-15 financial year.
As a result, the board intends to commence paying dividends and/or launch a share buyback by returning to shareholders up to half of this year’s net profit.
PMP last declared a dividend for shareholders when it announced a $4.6 million first half net profit for the 20110-12 financial year.
“In line with the board’s strategy and following three years of intensive restructuring, PMP has become a more profitable, cash generative and sustainable company,” PMP said in yesterday’s statement.
“Coupled with the emergence of improved market conditions, as indicated by more stable print industry volumes and heat-set prices, PMP now has a higher degree of confidence in the outlook for the business."
PMP 1Y – PMP shares up on turnaround story
Demand for the company’s core products of retailer brochures, company annual reports and magazines weakened, while some customers took their business offshore to benefit from the stronger dollar (a lot of printing went to New Zealand or Singapore). On top of that the internet and the rise of home shopping and the changes in print media profitability also damaged the company’s core operations.
PMP was forced to cut costs, reduce staff numbers and sell assets, particularly in its printing business in Australia. That saw the company report losses for the 2011, 2012 and 2013 financial years. The company returned to a small annual net profit in the 2014 financial year but did not pay any dividends. Now it plans to return to rewarding shareholders.
PMP shares jumped 18% to 55 cents yesterday in the best market conditions for over a week – a perfect day to release an upbeat update.
