By Miriam Steffens
Printing company PMP has continued its string of bad news, warning shareholders that its second-half operating earnings would fall more than expected and cutting more jobs as the slowdown in the economy hurts printing demand.
The company will slash 67 permanent positions at its printing centre in the Melbourne suburb of Clayton, just two months after it closed two presses in Adelaide and Brisbane to eliminate 76 jobs and removed some of its middle management.
The latest job losses will lead to $4.5 million in additional redundancy costs, taking the expected charges for job cuts and equipment writedowns in the half to $19.5 million.
But the company also warned its operating earnings would come in worse than previously forecast and fall below the $33.5 million reached in the first half, which means it is heading for a full-year slump in operating earnings of more than 21%.
It reported a $11.1 million net loss in the December half because of problems at its printing business, including disruptions at Clayton, where it had troubles integrating the Times Printers operations it had acquired.
The profit warning comes after PMP lost some major contracts and was rocked by irregularities at its junk mail distribution, having allegedly billed key clients including Coles for the printing and distribution of catalogues, some of which it failed to deliver.
Its former chief executive, Brian Evans, who was ousted in late January, last month launched a case against the company in the NSW Supreme Court seeking a termination payment.
His successor, Richard Allely, was only last week appointed to the top job formally. He said today the deteriorating market didn't leave PMP with any other choice than to cut more jobs. He said the company would work with the union to primarily reach voluntary redundancies.
''While PMP has sought to avoid redundancies through other initiatives, it was left with no alternative at this time,'' Mr Allely said.
PMP shares traded unchanged at 58 cents in recent trading.