Printer PMP has launched a transformation plan, which it says will address the group's earnings decline and return the company to best practice.
PMP said the savings generated in phase one of the plan would enable the company to deliver about $54 million in earnings before interest and tax for fiscal 2009, before significant items and a year end net debt position of about $220 million.
PMP said phase one had delivered annualised savings of $26 million so far, largely due to redundancies.
"This will significantly reduce the breakeven point of the business, in line with declining print volumes," PMP said in a statement today.
PMP said phase two, which will be implemented in the first half of fiscal 2010, will create a low-cost, customer-centric operating model to re-energise the business and position it strongly when market conditions improve.
Chief executive Richard Allely said the transformation plan would give PMP a sound operating model and return the company to best practice.
"We now have a very clear outlook and confidence in our ability to grow earnings beyond the 2009 level, once the economy recovers," Mr Allely said.
He said the plan was a swift and decisive response to the changing shape of the market, which has seen a significant reduction in volumes and price levels, particularly in the final quarter of the current financial year.
He said the restructuring involved overhauling PMP's planning, scheduling, supervision, logistics and administration processes.
Mr Allely said the transformation plan had the full support of the company's banks and that no debt facilities would require refinancing until 2012.
PMP reported EBIT, excluding significant items, of $33.5 million for the half year to December 31, 2008.
It reported a first half loss for the period of $11 million.
In December, the company admitted to poor reporting practices involving its GPS satellite tracking system for delivering brochures.
PMP retrenched 67 full-time positions at its printing plant in Victoria in April and 76 positions at its operations in Queensland and South Australia in February.
PMP shares were down 1.5 cents, or 3.66 per cent, to 39.5 cents at 9.15am.
AAP
