Salmat's full-year revenue and profits down

Salmat's full-year revenue and profits down
Salmat has blamed soft market conditions and restructuring costs as its profits fell by more than 25% for the full year.

The print and communications giant's underlying earnings were down 2.8% to $88.6m as revenues fell 1.8% to $863m for the year to 30 June. However, one-off costs dragged profits down by 26.8% to $36m 

Salmat's Business Processing Outsourcing (BPO) unit, which includes its major transactional print and mail work for large corporate clients, such as Origin Energy and Telstra, also took a hit.

The BPO arm suffered a 6.3% drop in revenue to $318.5m and an 8.6% slide in pre-tax earnings to $41.8m.  

The ASX-listed company said: "Business Process Outsourcing revenue was down 6.3% on the prior year to $318.5m, largely due to lower mail volumes predominately due to softer trading conditions in certain key markets with the shift to electronic presentment holding at around 3%".

"New business wins will restore these volumes in financial year 2012. Revenue from e-solutions and scanning was up on the prior year," said its annual report.

The company added that the drop in BPO profits was due to one-off investment costs including site relocations and the high-speed Océ inkjet investments made last September.

"A focus on cost containment, improved efficiency and the implementation of new business wins should have a positive impact in the current year."

"Now that the site integrations and colour print technology installation is complete, savings and volume growth from these initiatives will start to flow through in FY12 onwards."

The company noted that the loss of its Telstra call centre contract had also affected the results.

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