# OVT - Ovato Limited



## greggles (14 February 2018)

Couldn't find a thread on PMP Limited, so I thought I'd get one going just in case anyone wants to chat about the company, which operates a commercial printing, letterbox delivery, digital pre-media and magazine distribution services business.

Between January 2013 and November 2017 PMP Limited had a good run, increasing in price from around 20c to 80c. However, on 20 November 2017 the company downgraded its EBITDA forecast for FY 2018 from between $70 million to $75 million to between $50 million and $55 million, a decline of about 28%. They also lost their CEO, Peter George, who decided to retire at the end of November 2017 following a "tragic family bereavement". Mr. George was one of the company's best assets, having turned the company from loss-making company with significant debt into a profitable one.

This news sent the share price spiraling down, almost halving in price to 46c by mid-December.

Today PMP revised its guidance for the first half of fiscal 2018, reporting that it was expected to be $20.2M, $3M-$4M below PMP's expectations. This again sent the share price into free fall and it finished the day at 35.5c, down 25% from yesterday's close of 47.5c.

So things are looking grim for PMP at the moment. The company seems at a crossroads. Its share price is now back to where it was in September 2013, having wiped out more than four years of solid gains. Where it goes from here is anyone's guess.


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## sptrawler (14 February 2018)

Are they still printing stuff? a mate of mine bought a load of them a million years ago for about $2.


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## Faramir (14 February 2018)

Print advertising. I use to believe in it. Last time I used PMP was over 13 years ago. Less and less businesses are advertising via Letterbox distribution. It's too expensive and unreliable. Many walkers just don't deliver the full amount. They give up. PMP and others claim to have a sound audit process but I don't believe it. A stack of my leaflets were dumped on the side of the road.

Maybe printing advertising in small scale runs is feasible but I think the days of bulk advertising are fading. Pity, digital advertising is not effective.

I know little about PMP other than being a customer over 13 years ago and I didn't like them. Not sure how they should morph into a different type of company. At least PMP was better than Salmat (from a customer point of view.)


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## OxMelbs (21 February 2018)

I have close to 40,000 PMP shares that were bought about 10 years ago. They were well over $2 at the time. Was thinking of selling when they hit $0.50. Now at $0.34. Pretty disheartening.

Not really sure what to do right now. I'm not very liquid so was hoping to cash out shortly but doesn't really seem worthwhile right at the moment.


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## OxMelbs (26 February 2018)

Any thoughts on this stock anyone?


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## greggles (26 February 2018)

OxMelbs said:


> Any thoughts on this stock anyone?



PMP doesn't seem to be going anywhere in a hurry. After falling to the mid-30s a couple of weeks ago it appears to be consolidating there. Better opportunities elsewhere I would think.


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## OxMelbs (27 February 2018)

Thought as much. So would you think it more advisable to sell these and invest in others?


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## Country Lad (27 February 2018)

OxMelbs said:


> Thought as much. So would you think it more advisable to sell these and invest in others?




Sorry but that will be your decision, we are unable to offer advice here.


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## greggles (27 February 2018)

OxMelbs said:


> Thought as much. So would you think it more advisable to sell these and invest in others?



I can't advise you whether to sell or not, but I don't have a lot of confidence in PMP at the moment. Just my opinion.


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## greggles (12 September 2018)

greggles said:


> I can't advise you whether to sell or not, but I don't have a lot of confidence in PMP at the moment. Just my opinion.




Has PMP Limited finally bottomed? After collapsing from 80c this time last year to a low of 15.5c last week, I think the worst may now be over. Their FY18 financial results were an improvement on FY17 apart from their debt position and net cash flow.

I still have concerns about growth but with a market cap of under $100 million, PMP may represent fair value at current prices. They appear to be doing their best to cut costs and optimise their business operations following the merger of PMP and IPMG. While print is "old media" I don't think retail catalogues are going anywhere in a hurry and they will continue to generate a lot of cash. Whether they can sustain a profitable business over time remains to be seen.

PMP was up 14.29% to 20c today.


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## System (12 February 2019)

On February 12th, 2019, PMP Limited (PMP) changed its name and ASX code to Ovato Limited (OVT).


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