Ann: Investor Presentation - PMP/IPMG Merger-PMP.AX, page-16

I understand where you are coming from but catalogues are still one of the most effective means of marketing even in the digital age. They have a tendency to hang around people's homes for a number of days as a constant advertising reminder versus email (which is often read and deleted in less than a minute). Also, a lot of the costs for the catalogues for Coles, Woolworths etc. are passed on to suppliers who pay up to be in the catalogue (just like they also pay up for preferential shelf-space in the store etc.) so a lot of that cost doesn't actually come out of Woolworths and Coles pockets.

If we run off a 12% EBITDA margin for PMP/IMPG printing (which I personally think undercooks the synergies) you get ~$85m p.a.. Add in the rest of the businesses and you get to ~$100m EBITDA.

Depreciation of say $35m (I don't see much coming through IMPG once integrated), $10m for financing costs gets you to ~$38.5m after tax (though PMP has a lot of unutilised tax losses still to be brought to account). That implies an earnings yield of 8.7% (or P/E of 11.4x) based on the current SP.

If you look at it from a free cash flow to equity yield it is even better. $100m EBITDA less ~$10m maintenance capex, less $10m financing costs and ~$16.5m tax gives free cash flow available for shareholders (to pay dividends and undertake share buybacks) of ~$63.5m p.a. at present. This is why no cash will be paid out in 2017 - it will be used to repay the temporary ANZ facility to pay for the integration costs (and existing debt on issue is already cash backed by PMP).

A free cash flow to equity yield (based on current SP) of 14% is pretty good in these times of low returns in the market generally.

The printing presses being used at present have useful lives of more than 15 years. Personally I think there is still value in remaining invested today to take advantage of the FCF while it is available before thoughts need to turn to fleet renewal in a decade's time (by which time I plan to be out and leave it to be another person's problem...).