PMP raises $50m in corporate bond sale

PMP is reporting a healthy interest in its latest round of unsecured corporate bonds, raising $50m to partially settle its debts.

Demand for the bonds, which have a fixed coupon of 8.75 per cent per annum and a four-year term, has exceeded the $40m minimum announced on October 9.

The bonds will have denominations of $1,000 and require a minimum initial investment level of $50,000.

Investor approval comes as welcome reassurance for PMP, which ended the 2013 financial year with $89.1m net debt – a 38 per cent improvement on the previous year’s $143.3m – and is currently in the midst of a transformation strategy to get back in the black and build a more sustainable business.

Peter George, CEO of PMP, says, “We are pleased with the strong investor demand for the bond and we see this as endorsement of PMP’s strategic direction of transforming the company into a leaner, stronger and more competitive industry leader.

“The success of the offering enables us to pay down bank debt, increase the tenor of our debt and diversify our funding sources.”

Australia’s biggest printer saw its revenue for the year to June 2013 fall by almost 11 per cent to less than $1bn but profits rise by 5.1 per cent.

Its share price is currently sitting at 0.435 (October 25), up from a low of 0.14 (January 16) earlier in the year. PMP’s board says disciplined execution of its transformation strategy will deliver further long term improvements for shareholders.

The company points to several positive factors heralding a turnaround, saying its key catalogue business is showing resilience, it is gaining market share, realising cross selling opportunities as it removes restrictive internal silos, and it says the company is now well positioned for industry rationalisation and recovery in consumer demand.

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