PMP to sell, leaseback properties to generate at least $A75m

BUSINESSDESK: Printing and magazine distribution company PMP plans to sell and lease back properties in Australia and New Zealand to generate at least $A75 million of cash after posting a wider full-year loss.

The deals are to be completed in the second half of 2013 and the majority of funds used to repay debt, the ASX-listed company says. It has gained sign off from its banks for the plans.

Sydney-based PMP posted a net loss of $A24.5 million in the 12 months ended June 30, up from a loss of $A11.3 million a year earlier. Sales declined 8.4% to A$1.09 billion.

The drop in earnings mainly reflected lower volumes, the loss of a key contract and "tough retail conditions", it said. One-time items after tax were $A33.3 million, mainly reflecting a $A19.3 million impairment of its Sensis business, down from $A40 million a year earlier.

The company will pay a final dividend of 1 Australian cent a share, unchanged from 2011.

Shares of PMP fell 1.7% to 29 Australian cents. They have about halved from their recent peak of 65 cents on April 27, after the company disclosed a highly conditional offer from Sydney-based ticketing, parking equipment and packaging services firm TMA Group of between 68 Australian cents and 78 cents – more than three times PMP's market value at the time.

The company's debt-to-equity ratio rose to 44.7% from 39.7% a year earlier.

PMP New Zealand posted a 9.4% drop is operating revenue to $A171.4 million, while earnings before interest and tax tumbled 67% to $A1.6 million.

It saysNew Zealand print volumes were 7% down on the year after ongoing pressure on publishing and retail, while paper prices rose in the first half because of production disruption in Japan after the tsunami.

Its Gordon & Gotch distribution unit had a 13% decline in sales to $A358.5 million and a 72% slump in ebit to $A1 million. Sales at its biggest unit, Print Australia, fell 4.9% to $A449.3 million, while ebit was down 29% to $A39.4 million.

Chief executive Richard Allely says retail volumes for the year ahead are not expected to show any improvement and magazine and directory volumes will decline.

In response, the company is seeking significant cost cuts and debt repayment.

It will provide a market update at its annual meeting in November.