The company told the ASX yesterday that it was predicting a net profit before tax of $1 million in its full-year figures, up from a $2.1 million loss for the full year to June 2009.
This profit is expected to come on the back of earnings before interest, taxes, depreciation and amortisation (EBITDA) of $7.6 million, up 4% year-on-year from $7.3 million.
In the statement, managing director Bernard Cassell (pictured) said: "Trading conditions throughout the year have remained difficult and very patchy. In response, the group has continued to maintain a very strong focus on cost control. Recurring costs for the year will be 14% below the 2009 financial year."
The group said it had achieved "a number of significant milestones" over the period, including the sale of its conventional printing business to Ferrostaal, consolidating its South Australia business units into one site, "establishing a benchmark lower cost base" for the future and renewal of its finance facilities with GE for a further three years,
The facility limit is $60 million, down from $99 million in the year before. "This level is more than sufficient given the restructuring that has been completed."
The company also reported that it had halved its net debt, down to $35 million from the $70 million it reported to June 2009.
But the trading update also warns that the estimated EBITDA result "could materially alter depending on the final outcome of the Quality Group exposure".
"During the second half of the year, the industry experienced an unprecedented level of failures among its customer base. As a major supplier to the industry, the group was affected by these failures. The majority of the exposures were covered by debtors insurance or security. Those that were insured can be substantially recovered through the policy," according to the statement.
"The most significant of the uninsured failures was a private company, Quality Group, where it is expected that the exposure will be in the region of $3 million. CPI holds a second mortgage over the principal's residence," it continued.
"The mortgagor has advised CPI that the amount owing on the first mortgage is approximately $2.4 million. CPI understands that the house recently sold for $4.8 million but that the sale has not settled. Provisions have been allocated for the amount of $1 million.
"While CPI intends to take appropriate steps to seek recovery of amounts owing to it under the second mortgage, it is also seeking clarification of the first mortgage position in order to determine the recovery that might be expected. If the amount of the first mortgage debt exceeds the amount advised by the mortgagor, additional provisioning will be required to that extent," continued the statement.
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