THE struggling printer, publisher and direct marketer PMP Ltd has delivered more bad news for shareholders, issuing its second downgrade to annual earnings in six months.
Shares in PMP fell in the wake of the latest downgrade, and were 5?, or 16.67 per cent, lower at 25? yesterday. PMP shares were at 66.5? one year ago.
PMP slashed its full-year earnings forecasts for the 2011-12 financial year and ramped up cost-cutting amid challenging trading conditions.
PMP now expects its full-year earnings before interest, tax (EBIT) and significant items to be between $30 million and $33 million.
PMP's net debt was likely to come in at $150 million to $155 million.
On February 2, PMP said it expected earnings before significant items for this year would be in the range of $43 million to $47 million at a time of weaker and volatile market conditions.
This represented a 20 per cent decrease on the earnings guidance provided at the company's annual meeting in November, when full-year earnings for 2012 were forecast to approximate 2011's earnings of $56.7 million.
In November and on February 2 PMP said net debt was expected to be slightly lower than 2011's figure of $141 million.
PMP said yesterday that since the company's last market guidance in February, market conditions had continued to deteriorate.
"Trading results for March were circa 20 per cent below forecast, and at the same time the fourth-quarter forecast now indicates lower-than-expected volumes due to further deterioration in demand from the retail and publishing markets," PMP said in a statement.
"It is evident this is a combination of structural issues, economic drivers and deferral of advertising spend into the first quarter of fiscal 2013."
PMP said it had also expanded the scope of its cost-cutting program, especially in its Australian print business, in a bid to get the group back on track.
PMP expects the changes to generate more than $40 million in annualised savings.
A non-executive director, Peter George, has resigned from PMP's board and been appointed chief operating officer to help transform the Australian print business.