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PMP plans sale, leaseback of properties to generate at least A$75M

Monday 27th August 2012

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PMP, the printing and magazine distribution company, plans to sell and lease back properties in Australia and New Zealand to generate at least A$75 million of cash after posting a wider full-year loss.

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

Sydney-based PMP posted a net loss of A$24.5 million in the 12 months ended June 30, up from a loss of A$11.3 million a year earlier. Sales declined 8.4 percent 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 A$33.3 million, mainly reflecting a A$19.3 million impairment of its Sensis business, down from A$40 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 percent 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 percent from 39.7 percent a year earlier.

PMP New Zealand posted a 9.4 percent drop is operating revenue to A$171.4 million, while earnings before interest and tax tumbled 67 percent to A$1.6 million.

It said New Zealand print volumes were 7 percent down on the year due to ongoing pressure on publishing and retail, while paper prices rose in the first half because of production disruption in Japan post the tsunami.

Its Gordon & Gotch distribution unit recorded a 13 percent decline in sales to A$358.5 million and a 72 percent slump in ebit to A$1 million. Sales at its biggest unit, print Australia, fell 4.9 percent to A$449.3 million while ebit fell 29 percent to A$39.4 million.

Chief executive Richard Allely said for the year ahead, retail volumes weren't expected to show any improvement and magazine and directory volumes would 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.

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