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chief takes the reins(the Age)

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    PMP chief takes the reins
    November 15 2002
    By Annie Lawson

    PMP has ended a horror week by sacking two top managers responsible for its printing division, with chief executive Bob Muscat assuming operational control of the struggling business.

    In a memo circulated to staff yesterday, the company announced that the managing director of printing operations, John Leevers, and sales and marketing director Gordon Thomas had been axed.

    The latest round of management cuts follows this week's severe earnings downgrade, in which difficult trading conditions forced PMP to issue a dramatic earnings downgrade.

    Such was its severity that investors sliced PMP's market value by more than half in two days. However, the sharp price decline seems to have ended, the shares yesterday falling just one cent to close at 42 cents.

    "Our current situation is largely the result of poor performance in the print division, whose issues I have been monitoring for some time," Mr Muscat said in the staff memo.

    "I have, therefore, decided to immediately take over the leadership of the print division at an operational level.

    "Print group managing director John Leevers and director (of) sales and marketing Gordon Thomas will leave the company."

    Mr Leevers, who was previously chief general manager of Pioneer's Australian building products division, was appointed head of PMP printing in June 2000.

    He was charged with consolidating its operations and strengthening PMP's print brand and management structure.

    Some media analysts said yesterday that removing the only people who knew how to run a printing business was an ominous sign.

    One analyst said Mr Muscat's decision to run the division was an unusual and risky move and that this suggested serious flaws in PMP's corporate culture.

    PMP revealed on Monday that worse than expected market conditions would reduce first-half earnings before interest and tax (EBIT) to between $32 million and $35 million, from $59 million last financial year, or $51 million on a like-for-like basis.

    Earnings in the second half are also expected to falter, the company cautioning that it would suffer a similar decline.

    "It is imperative that we improve the print division's performance in the short term and, to that end, I am meeting over the next two days with 25 senior managers from all areas of the business to identify strategies to improve our effectiveness going forward," Mr Muscat's memo said.

    Declining print volumes in core areas such as directories, retail, magazines and newspapers have squeezed margins.

    Intensifying competition has also caused a headache for the company, with both Melbourne and Sydney markets cluttered with rivals.

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