The profits of catalogue printing group PMP have been hit by a $2.7 million bad debt load from electronics retailer Dick Smith going into voluntary administration.
Net profit for the half year fell 58.8% to $1.77 million on an 8.6% drop in sales revenue to $390.5 million.
A short time ago, PMP shares were down more than 1% to $0.465.
The actual bad debt exposure is $3.9 million but $2.7 million after tax.
CEO Peter George says there’s strong price competition, resulting in churn of sales contracts along with the anticipated closure of two customers’ businesses which will be largely offset by further cost savings.
“Trading conditions remain challenging with mixed signals in the Australian retail sector,” he says. “Industry demand for catalogues remains stable. PMP New Zealand is experiencing tougher than expected trading conditions.”
However, he says the company is on track to deliver net profit of $11 million to $13 million, before significant items.
An unfranked interim dividend of 1.2 cents a share was declared.