Wednesday, 18 Sep 2013 14:18 GMT

Interview: Price takes top seat at Paperlinx

Andrew Price has been appointed as the new managing director and chief executive officer of Paperlinx, replacing Dave Allen who took the reins last August

Price’s rise to the position has seemed inevitable since coming onto the scene at the struggling merchant group as an ‘activist shareholder’ in summer 2012. He was appointed an executive director in November 2012 and has increasingly been the public face of the company since that time.

Now unified under the Paperlinx banner, the company was formerly split into a number of separate divisions, with Robert Horne heading up the supply of the sign and wide-format print industries.

Speaking to SignLink the new managing director, who will be based in the UK, confirmed that this was a turnaround job but would not be drawn on whether he could stay longer than the length of his contract.

“I’ve signed through to April 2015 as a minimum—at the end of that the board and I will sit down and discuss whether we want to extend or not,” he says, adding: “It’s a minimum of 18 months in Europe but its all about turning the business around.”

Price confirmed he owns just one percent of the company, which cut its losses by two thirds to £52.1m for the 12 months to June 30th. However, stock options that are expected to be approved at the next AGM will give him rights over a further 5 percent.

His salary will remain around the same level as the outgoing Dave Allen at A$751,000 (£440,000). But there is the potential to double his remuneration package with a cash and share bonus scheme that is totally performance related.

Management lost touch with customers

Price praised the job Allen has done since taking up the managing director and chief executive officer roles permanently in December, following four months on an interim basis

He says: “Since I joined the board last year most of the old management have changed. Dave was actually one of the good guys who had a lot to offer, but now he’s at the point of saying we’re ready for the next step. This is a mutual thing, he’ll be with us for the next three months doing a proper handover.”

Following years of turbulence, sources close to the company confirmed to SignLink that Price will enjoy more support amongst key shareholders than previous management and there is hope that he will have a galvanising effect.

According to Price the previous management spent too much time on infighting and lost touch with its customers, a problem he says he has already set about rectifying.

If the new managing director’s previous track record is anything to go by then Paperlinx now has someone at the top of the company who understands the print and paper business, something that will be important if it is to achieve its profitability target in the current financial year.

Price states: “The thing about Paperlinx, and print and paper industry generally, is there are a lot of money men who think they understand the industry.

“There are some people in private equity, unfortunately, I’m not smart enough to be one of them. I’m a simple print and paper man, I’ve spent all my life in the industry, that's what I know and that’s what I do.

“I understand the complexities of the business, the pressures our customers are under, and having been a print manager, what our customer’s customers want as well.”

Paperlinx will stick with its core business

While the return to profitability is a simplistic target, when pushed as to what will be a reasonable return-on-investment for the business, Price claims the target has to be the five percent EBIT on the paper sales it is achieving in some non-European territories.

He also says Paperlinx’ core will remain print and paper and that he is sceptical about any merchant’s prospects of becoming a communications companies.

“I scratch my head about that and think I don’t know how you get there,” he says, adding: “What I see is that we have three businesses; we have a paper business, a  visual technology solutions business, and a packaging business.

“All three have different challenges: our paper business’—which is still our biggest—challenge is an overall declining market. What I am happy about is that, particularly in the UK, we are actually seeing our volumes increase.

“We’re adding value with our customers through webshops, and a host of other initiatives that will be unveiled in the coming months so that we become more than just a paper supplier.

“But to people saying we’re going to become a communications company, that’s not the role of the paper merchant. That’s the printers job, it is ours to enable that and give them the tools that they need to grow.”

Allen will be paid a year’s salary as part of his severance package, he will remain at the business until the end of the year in a consultancy role.
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