Ive up and PMP down as heatset work goes around

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The 'see-saw' effect of Australia's crowded and limited heatset printing market has seen Ive Group report a 73 per cent increase in revenue, while rival PMP has delivered warned-of lower profits.

Both companies reported on their half-year results this week.

For Ive, the benefits of its acquisitions of Franklin Web and AIW, and the commissioning of a highly-automated new Franklin plant in Sydney, are plain to see. Beyond the increase in half-year revenue to $359 million, there were increases of more than 50 per cent in pro forma EBITDA (up 56.9 per cent) and pro forma NPATA (53.4 per cent), leading to a forecast that full-year EBITDA will be between $72-77 million.

Against that context, PMP had a net loss after tax and significant items of $19.5 million to report, even though earnings and revenue rose following last year's merger with IPMG.

Former IPMG boss Kevin Slaven, whose position as chief executive is confirmed after a period in an acting role following Peter George's retirement, faces a considerable challenge. EBITDA earnings before significant items were up 82.3 per cent to $20.2 million against the same period last year - and revenue increased 52 per cent to $398.5 million - Slaven says this is the result of IPMG sales being included. Lower NZ sales and a weaker second quarter in Australia pulled results down, with prices also lower than expected. For its Print Australia, revenue of $244.7 million included $134.3 million from IPMG.

The group is also suffering as magazine and newspaper publishers reduce pagination and quantities in their forward bookings.

There's little doubt that IVE - backed by some powerful investors - is the industry favourite, having brought the always highly-favoured Franklin Web business into the fold and realised ambitions with the new NSW greenfield site, which has been fully operational since November, and has a second 80-page manroland Lithoman on order. There's also been a merger between the Victorian display businesses of Franklin and BlueStar, and other developments including the acquisition of SEMA.

With that, what Ive executive chairman Geoff Selig modestly calls "an important period" for the group seems set to go on delivering, but the Australian market is only so big, and Ive's growth can only be at the expense of PMP and any remaining minor players.

Peter Coleman

Pictured: A magazine pop-up from Franklin's innovation arsenal

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