Friday 16 December 2016 by William Arnold Company updates

PMP weaker than expected 1H17 should be offset by cost savings over the full year

PMP held its AGM and an extraordinary general meeting on 16 December in relation to the proposed merger of PMP with IPMG 

The merger was approved by shareholders with a 99.62% vote in favour. Details of this transaction were covered in the WIRE in November.External link - opens in a new window 

No FY17 guidance was given due to the potential merger. However PMP advised that volumes had been soft in the early part of FY17 and that market conditions were challenging. PMP also failed to secure a number of new Tier 1 contracts. Management stated that PMP's 1H17 EBITDA is expected to be significantly lower than last year.

However, the company did say that additional cost savings measures had been identified which it expects to keep EBITDA in line with their expectations for the full year (PMP standalone). FIIG’s conservative debt base case FY17e forecasts for PMP on a standalone basis is EBITDA of $47.6m (FY16 was $53.6m).

On a merged group basis, including expected standalone cost savings and the cost synergies to be delivered in line with what the company announced to ASX on 28th October 2016, PMP expects full year EBITDA (pre significant items) to be around equity broker expectations. Taylor Collison/Bell Potter average EBITDA (pre significant items) is $58m on a merged basis.

PMP’s first half results are due in February.

Please refer to PMP investor relations siteExternal link - opens in a new window for the full ASX announcements.

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