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Tuesday, 23 February 2010 12:00

CPI’s profits take a hit in tough market

CPI's net profit dropped 4.2 per cent to $2.04m for the first half of 2009-10 while earnings before interest and tax (EBIT) fell 27.6 per cent to $4.2m. The Australian paper giant says trading conditions remain difficult with volumes still below the levels two years ago.

In a telling insight into the current state of the domestic printing industry the company also reports its revenues from ordinary activities are down 24.6 per cent to $209m, from the $277m it recorded in the latter half of 2008.

CPI told shareholders today that in view of the still difficult conditions in the industry it has determined not to declare a dividend for the time being. CPI's share price plummeted 22 per cent following the release of its figures.

Bernard Cassell, managing director of CPI says, "During the six months to December 31, conditions remained difficult due to the depressed levels of activity in the economy generally, and the printing industry particularly. Volumes were significantly affected with anecdote evidence suggesting the industry volumes were down by 20 per cent."

Cassell also says that in line with the difficult conditions the Group has focused strongly on cost and balance sheet control. He says, "Cost control initiatives which had begun in the previous financial year, were continued and consolidated. Overheads for the first six months were 17 per cent below the prior year, exceeding the targets that had been set."

Commenting on the decision to sell its Graphics Division, with Komori presses, to Ferrostaal Cassell says, "The opportunity was taken to further rationalise product ranges and clear out discontinued lines. This process is now well advanced."

Published in Financial News