PaperlinX has announced a statutory loss after tax of A$(57.3) million for the six months to 31 December 2012; a six per cent improvement on the A$(60.9) million loss posted in the previous corresponding period.
This includes a non cash impairment charge of A$24.7m against computer software and proprietary paper brands, and restructuring charges of A$6.4 million, relating to programmes in the UK and some smaller European businesses such as Denmark and Spain. After adjusting for these significant items, the underlying loss after tax is A$(24.3) million dollars.
Net debt has been reduced by the proceeds received from divestments in this period, (PaperlinX completed the sale of its business in South Africa in September 2012 and its five businesses in South Eastern Europe in November 2012) and the Group has funding in place to support growth, having extended its ING facility until September 2014.
Phil Carr, Managing Director UK & Ireland said that the results reflect the impact of legacy operating structures in Europe that were not aligned with changing market conditions. “We are making accelerated efforts to turnaround the business in Europe and have implemented a number of initiatives to improve the operational structure, deliver cost benefits and provide the platform for a return to growth,” he said.
The UK and Ireland business restructuring as announced at the AGM in November, is progressing as planned and the UK is expected to turn a profit in the second half of this financial year. “We are currently consolidating our commercial print sales force in the UK, a key part of our journey to consolidate operations and eliminate significant cost and inventory duplication. Commercial Print is our core business and whilst realigning our cost base, we will continue to develop our product offering to increase our market share in this sector,” adds Carr.
PaperlinX is channelling its focus and capital into growth areas, evolving its operating model by developing strategy through product-based business units rather than being limited by country-based structures.
This new product and market-based strategy which will be implemented across Commercial Print, Packaging and Sign & Display; combined with working capital initiatives, will drive investment in growth areas and support the longer-term future of PaperlinX; providing a strong base from which the Group can further transform its business into a competitive market leading materials merchant.