KEY POINTS:
Payments technology company ProvencoCadmus expects to exceed estimated cost savings from its merger by nearly three times, but is still likely to post a full-year operating loss of around $10 million.
In a market update, the company said the restructuring which arose from the merger of Provenco and Cadmus nearly two months ago was likely to be completed by October, with an estimated $20 million shaved off annual operating costs - well above the $7.6 million identified pre-merger.
This was mainly to come from the shedding of around 100 jobs - or a quarter of total staff.
Chief executive Jim Doyle said final redundancy numbers would be known next week, but the increased cost saving has come from a large reduction in middle management numbers.
That has, however, also meant extra one-off restructuring costs that will impact on the company's current financial year, which ends on Monday.
"Because we're moving on some very senior people, some people have got three months' [redundancy pay]," said Doyle.
This and the difficult trading conditions across the company's divisions meant it expected an ebitda (earnings before interest, tax, depreciation and amortisation) loss of around $10 million, excluding any adjustments arising from a review of intellectual property and goodwill assets.
The 2009 financial year budget, however, was likely to show a return to profitable trading. Doyle said this was from the savings made from the restructure, and growth opportunities locally and internationally.
The merger had meant the company had buildings that were surplus to requirements - with the potential to exit building leases as and when these leases expire, although the company was likely to remain based in Provenco's offices in College Hill.
Doyle said a planned capital raising could take place later this year, although other funding options, including the sale of some non-core assets as a result of a strategic review arising from the merger, were also being contemplated.
