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Recommendation
We noted in issue 31's MarketLab that James Donnelly, an American non-executive director of PMP, had been a recent buyer of PMP shares. Priced at $3.21 at the time, they're now $2.12, a good 51% lower. The culprit is the company's Preliminary Final Statement, released on 17 August, which showed that it had been a tough year for PMP. Sales were up 5.3% to $1.19bn, while earnings before abnormal items but after tax were up a mere 3.2% at $65.1m. The printing operations did reasonably well, but it was the publishing division that let the company down - earnings there dropped around 27%, reflecting the competitive environment for magazine titles. The dividend for the year was maintained at 20.4 cents, fully franked, but a little worrying is that franking might have to be cut on future dividends, so the high dividend yield, presently 9.1%, wouldn't be so attractive. With the shares trading close to the company's asset backing of around $2.07, we're sticking with our HOLD recommendation, pending a full review in a future edition.