TIDMPDC
RNS Number : 6941E
Printing.com plc
06 June 2012
For Release
7.00am
6 June 2012
PRINTING.COM PLC
("Printing.com" or "the Group")
Preliminary Results for year ended 31 March 2012
Printing.com, operating in the UK, Ireland, France, Holland,
Belgium, and under licence in New Zealand and the US, today
announces its preliminary results for the year ended 31 March
2012.
Financial highlights
2012 2011 Change
Turnover GBP21.77m GBP17.02m 27.9%
EBITDA GBP3.43m GBP2.86m 19.9%
Profit Before Tax GBP1.26m GBP1.31m * 3.8%
EPS - Basic 2.33p 2.04p 14.2%
EPS - Fully Diluted 2.32p 2.02p 14.9%
Dividend 2.55p 3.15p * 19.0%
Capital expenditure GBP1.38m GBP1.55m
Net Cash GBP1.87m GBP2.00m
Net Funds* GBP1.77m GBP1.22m
*Net funds is the net of cash and cash equivalents less other
interest bearing loans and borrowings
Operational highlights
-- Strategic initiatives delivering anticipated benefits
-- Robust performance in the Netherlands online channels
-- Belgium - online revenues growing
-- BrandDemand UK - revenues growing
-- Flyerzone UK - revenues growing
-- Template Technology materially adding to revenues
-- Strategy in place to augment Franchise network
Commenting on the results, Tony Rafferty, Chief Executive of
Printing.com, said: "The Group has delivered strong growth in
revenues and EBITDA reflecting the benefit of the MFG acquisition
and the generation of revenues from the new Template Technology,
despite the ongoing economic malaise, and has remained profitable
and cash generative throughout the period. The robust debut of the
new Online Initiatives bodes well for the Group's prospects moving
forward."
For further information:
Printing.com plc
Tony Rafferty (Chief Executive) 07966 517 336
Alan Roberts (Finance Director) 0161 848 5713
Cubitt Consulting
Gareth David 0207 367 5100
N+1 Brewin
Robert Beenstock 020 3201 3710
Richard Lindley 0113 241 0126
Chairman's Statement
The Board believes that the financial year ending 31(st) March
2012 has been one of the most important in Printing.com's
evolution, as the first successful steps have been taken in the
commercial exploitation of the Group's online Template
Technology.
Trading conditions across the Group's online channels in Belgium
and the Netherlands proved robust but trading via its established
Franchise channels (UK, Ireland and France) remained challenging,
reflecting not only the economic situation but also increased
online competition.
Turnover increased by 27.9% to GBP21.77m (2011: GBP17.02m). This
reflects revenue growth from Belgium, the various new online
initiatives and the full year contribution of Media Facility Group
BV (MFG) Netherlands (acquired November 2010).
The increased revenues, coupled with strong cost control and
improved operating margins in the Netherlands resulted in EBITDA
increasing by 19.9% to GBP3.43m from GBP2.86m last year. We
anticipate that the material progression of EBITDA marks an
important turning point for the business as we move to
commercialise our platform.
Pre-tax profit decreased marginally to GBP1.26m (2011:
GBP1.31m). This decline reflected the increased depreciation and
amortisation arising from software development, the acquisition of
MFG together with the buying back of certain rights from Territory
Franchisees.
Cash
The Group finished the financial year with cash of GBP1.88m
(2011: GBP2.00m).
During the year, debt was reduced by GBP0.69m. This reflects the
final instalments on finance relating to the 2006 expansion of the
Group's Manchester production Hub and the repayment of GBP0.49m of
debt relating to the acquisition of MFG (and MFG itself). At the
period end total Group borrowings were GBP0.10m.
The Group's net funds increased to GBP1.77m (2011: GBP1.21m)
which is the highest level of net funds post the payment of the
special dividend in 2009.
During the year capital investment totalled GBP1.38m (2011:
GBP1.55m), funded through operational cash flows. This principally
reflects the ongoing investment in the Group's proprietary
software.
It is pleasing to report that during the period EBITDA has
progressed and debt has almost been eliminated.
Final Dividend and Proposed Capital Reorganisation
When the Interim Results were released I expressed the Board's
view that the continuance of the Company's dividend policy was
dependent upon earnings progression and this has not been the case.
However, the Board is encouraged by the Group's cash generation,
cash position and the progress made in new online initiatives and
is therefore proposing a final dividend of 1.50p to be paid on 27
July 2012 to Shareholders on the register at the close of business
on 15 June 2012. This would make a total dividend for the year of
2.55p which is higher than market forecasts (2011: 3.15p).
Although the Group's Balance Sheet and cash flow from operations
were strong and would have supported a maintained dividend the
distributable reserves would not do so for this or appropriate
future dividends and it is the Board's intention to take the
necessary steps to undergo a capital reorganisation to address this
issue. It is our intention to send a circular to shareholders to
seek approval for the aforementioned capital reorganisation in due
course.
Retirement as Chairman and People at Printing.com
Having been Chairman of Printing.com plc prior to its IPO in
2000 and debut as a public company on London's then 'Ofex market'
it is now time for me to retire from the Board. During that period
the Company evolved from a fledgling business with a good idea to a
Group whose revenues have grown tenfold, operating in seven
countries and has delivered eight consecutive years of profitable
trading.
At this point I am very mindful that the progress of the Group
to date has been based upon the endeavours of a very committed and
talented team which includes direct employees, our Franchisees,
their employees and the teams within our international licence
partners. I would also like to pay particular tribute to the team
behind the Group's various new initiatives which I believe show
excellence in innovation from both a technology and commercial
stance.
Outlook
It is a little over 18 months since the Group reported a step
change in its strategy via the announcement of its Template
Technology along with the acquisition of MFG. The purpose of the
acquisition was to enhance the Group's online expertise and
establish a greater foothold in Continental Europe. At the same
time it was envisaged that the Group's Template Technology would
extend the capabilities of these online channels and augment and
refresh the Printing.com Franchise formula. I believe that these
initiatives have now exhibited material commercial potential.
The Group is in a solid financial position; it continues to
deliver excellent cash generation and, having virtually eliminated
all of its debt has a sound foundation for its future
endeavours.
With the UK in recession and continued economic uncertainty in
the Eurozone, it is appropriate that we remain cautious in the
short term. However, in what is to be my last report as Chairman, I
believe that the various online initiatives coupled with the
acquisition of MFG mark a paradigm in the prospects of the
Group.
George Hardie
Chairman
6 June 2012
Chief Executive's Statement
Review of Trading
UK network
Revenues from the UK Network of Printing.com Franchises and
Company owned stores, taking into account both the sale of products
and services and license fees declined by 3.0% to GBP13.0m (2011:
GBP13.4m). Underlying operating margins remained under pressure due
to the continual promotional support required. The UK Network
contracted slightly to 267 outlets (2011: 288) of which six are
directly owned (2011: seven).
Now more than ever we are aware of certain material changes in
the marketplace, principally reflecting online competition. This is
particularly evident in the 'Small Office Home Office' ("SOHO")
market segment. To this end, the Group has devised certain
strategies that augment the established model thereby providing
Printing.com Franchisees with a hybrid online/offline formula.
Accordingly, during January 2012 my senior team and I presented
this vision to the Company's Franchisees via a series of regional
road shows along with a "white label" alternative formula.
We believe that the outcome of these road shows was encouraging
and that these various initiatives will maximise opportunities, not
only for the Group but also for our Franchisees.
BrandDemand UK
It has been a little over 18 months since the Group announced
the launch of BrandDemand (branddemand.com), a service targeting
larger businesses, particularly those with multi-sites, via
Templates. Centred on the Company's Template Technology,
BrandDemand utilises a library of Templates adapted for a client's
specific use.
During the course of the year, the initiative went from proof of
concept to revenue generation, finishing the year with an
impressive portfolio of over 60 multi-site clients. Many
BrandDemand clients are other franchise networks whose specific
needs have been closely aligned with the system.
BrandDemand revenue for the year was GBP0.28m (2011: GBP0.01m)
and, moving forward during the current year we anticipate this
figure to show significant progression.
Flyerzone UK
Flyerzone features generic Templates for SOHO clients covering a
multiplicity of business sectors. This enables the SOHO business
owner to browse suitable artwork 'ideas' and then edit the template
with their specific details.
Flyerzone.co.uk was 'soft' launched in September 2011, with the
site's promotion in earnest commencing early January 2012.
Revenues for the year to 31 March were GBP0.09m (2011: nil).
Revenues in March 2012 accounted for GBP0.04m, some 45% of the full
year, indicating the significant acceleration in revenue run rates
that this channel has seen.
We continue to be optimistic that Flyerzone.co.uk will progress,
albeit the cost of online client acquisition remains high (in
proportion to revenues) as the brand is established.
TemplateCloud
Templatecloud.com is a conduit that enables graphic designers to
make their designs available for use by SOHO clients as part of an
editable template format. This is achieved via the Company's
software technology that automatically converts a generic graphic
design format into a Template that in turn can be edited by any
client.
The independent freelance graphic designer is incentivised to
submit work to TemplateCloud in return for a share of the artwork
revenue paid by the client.
In essence, TemplateCloud is 'crowd sourcing' original creative
content in much the same way as online photo libraries. We believe
that at this juncture TemplateCloud is unique in this approach and
the scope exists to leverage the TemplateCloud content in the
Group's various channels and to licence content in other ways.
Netherlands
In the Netherlands the Group operates three online web stores,
Flyerzone.nl, Drukland.nl and Printrepublic.nl.
Revenues from the various Dutch initiatives accounted for
GBP6.46m (2011: GBP2.54m from 5 months trading). However, the
strengthening of sterling vs the Euro masks the underlying growth
of sales in the Netherlands, which was 13.0% on a constant exchange
rate basis.
At the outset of the year under review, all products from the
various Dutch channels were subcontracted. However, during the
course of the year, certain lines were switched to the Company's
Manchester Hub. The emphasis for this initiative was on higher
value products that justify the increased cost of carriage.
Presently in the order of 1,100 jobs per month are supplied from
the Manchester Hub, and this, together with a focus on operational
margins at large, has added to Group EBITDA.
The Group's Template Technology is expected to be added to the
Flyerzone.nl platform during the Company's third quarter which we
believe will augment the individual characteristics of the Dutch
channels and generate additional revenue streams.
Belgium
The Group operates in Belgium via the 'Drukland.be' channel and
targets the Flemish speaking region of the country. During the
year, Drukland.be exhibited strong growth and achieved sales of
GBP0.80m (2011:GBP0.10m from 5 months trading).
France
During the year under review, total French revenue (from the
Group's Franchise network, BrandDemand France and Flyerzone.fr)
grew to GBP0.54m, representing an increase of 17.8% (2011:
GBP0.46m).
Turnover was flat across the Printing.com network albeit the
number of outlets increased to 28 (2011: 22). A single Company
owned outlet continues to operate in Montpellier. During the year,
BrandDemand France (smart-template.fr) and Flyerzone.fr were
launched and accounted for revenue of GBP0.06m (2011: nil).
Looking ahead, we expect that the Group's templates will be
added to the Flyerzone.fr format during the Company's third quarter
and that BrandDemand France will gain traction.
Ireland
Encouragingly, trading across Ireland exhibited growth of 14.3%
to GBP0.39m (2011: GBP0.34m). The Printing.com network across
Ireland remained unchanged with ten outlets, including one Company
owned store in Dublin. BrandDemand Ireland presently remains at an
early stage of development.
Printing.com International Licences
New Zealand
We are mindful of the extremely challenging situation facing our
New Zealand partners following the impact of the Christchurch
earthquakes; notwithstanding this and reflecting their endeavour
and resilience, trading volumes remain consistent with previous
years. We recently met our New Zealand partners and agreed the
roadmap for introduction of our Template Technology.
US
During the course of the year our US partners increased their
network in Florida and South Georgia to 42 outlets (2011: 32
outlets). However, our geographic coverage in the US remains
limited. We are now in purposeful discussions with our US partners
and we believe we have established a way forward to introduce the
Group's Template Technology into the US in a more expeditious
manner.
Infrastructure & Software
The Group's Template Technology comprises significant
proprietary components and licenced elements together with
extensive Template libraries.
We have a clear vision of how the Group's Template Technology
can be utilised both directly and under licence. Within the
printing sector the Template Technology is marketed under the 'W3P'
identity which derives from the generic industry reference 'W2P'
(Web-to-Print). We believe that the Group's systems reflect the
next generation for this technology.
The W3P technology in essence underpins BrandDemand,
Flyerzone.co.uk together with the myriad of licensing opportunities
that we are presently exploring. To this end, the Group exhibited
the 'W3P' technology at DRUPA (Dusseldorf, Germany) - the world's
largest printing exhibition. We believe that the 'W3P' initiative
was well received and meetings with partners are progressing.
To this end, we anticipate continued investment in the overall
'W3P' platform to unlock its potential. This not only relates to
the direct channels that the Company owns and operates but other
opportunities via licence.
There are no immediate requirements to make any material capital
investment in the Group's Manchester Hub. Unutilised capacity still
exists which we hope will be taken up during the current year as
the new initiatives progress.
Board Changes
George Hardie has announced his intention to retire from the
Board at the Group's AGM on 20 July 2012. On behalf of all of the
Board I would like to express our thanks to George for all his hard
work and the significant contribution he has made to the growth of
the Group.
Les Wheatley will assume the role of Chairman on George's
retirement and the Board anticipates the imminent announcement of
the appointment of an additional non-executive director.
Current Trading
Post the year end trading has continued at a similar robust
level across the Group's online channels across the Netherlands and
Belgium but more challenging across the UK's Franchise network.
BrandDemand continues to gain momentum across the UK
month-on-month. Flyerzone.co.uk is also exhibiting month-on-month
growth. We attribute this resilience to the Group's Template
Technology which will be extended to a variety of other Group
channels and will, we believe, add to revenues and operating
margin.
Tony Rafferty
Chief Executive
6 June 2012
Financial Review
Revenue
Group revenues increased by 27.9% to GBP21.77m (2011:
GBP17.02m), as MFG, acquired November 2010, contributed for the
full year. Revenue from the Eurozone was 37.6% of the total (2011:
20.2%).
EBITDA for the Group, advanced strongly with the increase in
Revenue providing the robust operating cashflow necessary to fund
the ongoing investment in the Group's operating systems and an
appropriate return to shareholders.
Pre Tax Profit before non-recurring charges decreased marginally
to GBP1.39m (2011: GBP1.47m). Non-recurring costs incurred in the
year related to the final integration and reporting alignment of
MFG totalled GBP0.13m (2011: GBP0.16m) reducing Pre Tax Profit to
GBP1.26m (2011: GBP1.31m).
Gross Profit
The Group's simple definition of Gross Profit has been revenue
less direct materials (including the cost of distribution when made
direct to customers). MFG cost of sales include the manufacturing
conversion cost, as they are supplied by third party commercial
printers, therefore Gross Profit has reduced as a percentage of
revenue.
Gross Profit increased by 17.0% to GBP11.63m from GBP9.94m. In
percentage terms it reduced to 53.4% (2011: 58.4%) of revenue due
to the inclusion of a full year of MFG's cost of sales. The
respective margins of Printing.com and MFG remained similar to the
prior year due to the continued support of the Franchise network in
the UK and Ireland through monthly sales offers.
EBITDA
The Group define EBITDA as operating profit plus depreciation
and amortisation. The year showed a marked improvement to GBP3.43m
from GBP2.86m (19.9%).
Pre-Tax Profit
The Group recorded a pre-tax profit of GBP1.26m (2011:
GBP1.31m), being 5.8% (2011: 7.7%) of Group revenue.
Staff costs increased in the year to GBP4.47m (2011: GBP3.95m),
but fell as a percentage of revenue from 23.2% to 20.5%. The
depreciation and amortisation charge for the year rose sharply to
GBP2.13m (2011: GBP1.56m) as a result of charges for the
amortisation of Software Development and the assets recognised on
the acquisition of MFG.
Interest Received and Charged
Interest received of GBP0.01m (2011: GBP0.04m) reflects interest
on the cash balances held and interest charged to Franchisees on
loans to them from Printing.com. Interest paid of GBP0.02m (2011:
GBP0.05m), relates primarily to lease finance repayments.
Taxation
In the year the standard rate for tax was 24% (2011: 26%). The
charge for the current year is GBP0.16m or 12.7% of PBT (2011:
GBP0.39m or 29.8%). The effective tax rate was reduced through the
inclusion of enhanced tax relief on research and development
expenditure.
Acquisition
During the year the final elements of consideration were paid on
the acquisition of Rotterdam based MFG. These represented
GBP355,000 in repayment of Loan Notes and the issue of 615,908
ordinary shares in the Company.
Earnings Per Share (EPS)
Basic EPS achieved was 2.33p (2011: 2.04p), the weighted average
number of shares used was 47,302,191. Diluted EPS achieved was
2.32p (2011:2.02p), the weighted average number of shares used was
47,506,092. The year closed with 47,557,835 ordinary shares in
issue.
Cash Flow
At the year end the Group had cash balances of GBP1.87m (2011:
GBP2.00m). After debt of GBP0.10m in MFG legacy bank loans Net
Funds were GBP1.77m (2011: GBP1.22m). Operational cash inflow
remained strong at GBP3.54m (2011: GBP4.16m). The most significant
cash outflow being dividends paid of GBP1.49m (2011: GBP1.43m).
Capital Expenditure
The total expenditure for the year was GBP1.38m (2011:
GBP1.55m). The major item being Software development charges for
the online initiatives and computing infrastructure GBP0.86m (2011:
GBP0.87m) Franchises reverting to Company ownership resulted in
Customer Lists valued at GBP0.33m (2011 :GBP0.52m) being
acquired.
Manufacturing capacity at the Manchester Hub provides scope for
significant growth without additional capital expenditure. Capital
expenditure will therefore continue to be mainly incurred on
software development and enhancement.
Share Capital and Share Options
No employee options were exercised or granted during the
year.
During the year the Company did not purchase any of its own
shares.
Treasury Policies and Financial Risk
Surplus funds are intended to support the Group's short term
working capital requirements. These funds are invested through the
use of short term deposits and the policy is to maximise returns as
well as provide the flexibility required to fund on-going
operations. It is not the Group's policy to enter into financial
derivatives for speculative or trading purposes.
Interest rate risk, liquidity risk and currency risk
Interest rate risks are minimal, having cleared all finance
lease agreements. The Group uses leasing or hire purchase at
periods of up to 5 years to finance purchases of major items of
plant where it is considered to be a more effective use of
funds.
The Group operates in Ireland, Holland, France, Belgium and
Switzerland and therefore has overseas assets and liabilities which
are income generating and thus any currency movements are
considered to be a low risk.
Alan Q. Roberts
Finance Director
6 June 2012
Performance graph
The Group's share price performance for the period under review
charted with the AIM all share is shown below. The market price of
shares as at 31 March 2012 was 28.00 pence (2011: 36.50 pence). The
range during 2012 was 26.75 pence to 40.50pence.
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2012
Note 2012 2011
GBP000 GBP000
Revenue 3 21,768 17,016
Raw materials and consumables used (10,134) (7,074)
Gross profit 11,634 9,942
Staff costs (4,473) (3,952)
Other operating charges (3,727) (2,968)
Depreciation and amortisation (2,134) (1,560)
Total expenses (10,334) (8,480)
Operating profit before acquisition
related costs 1,300 1,462
Acquisition related costs - (161)
Operating profit 1,300 1,301
Financial income 14 56
Financial expenses (56) (46)
Net financing (expense)/income (42) 10
Profit before tax 1,258 1,311
Taxation 4 (158) (385)
Profit for the year 1,100 926
Other comprehensive income for the - -
year
Total comprehensive income for the
year 1,100 926
Basic earnings per share 5 2.33p 2.04p
Diluted earnings per share 5 2.32p 2.02p
Consolidated Statement of Changes in Equity
Group - year ended 31 March 2011
Share Share Merger Retained
Capital premium reserve Earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 31 March 2010 450 3,881 211 1,525 6,067
Profit and total comprehensive
income for the year - - - 926 926
Dividends paid - - - (1,425) (1,425)
Shares issued and released
from Treasury 19 - 627 - 646
Proceeds from disposal of
treasury shares - - - 285 285
Total movement in equity 19 - 627 (214) 432
Balance at 31 March 2011 469 3,881 838 1,311 6,499
Group - year ended 31 March
2012
Balance at 31 March 2011 469 3,881 838 1,311 6,499
Profit and total comprehensive
income for the year - - - 1,100 1,100
Dividends paid - - - (1,492) (1,492)
Shares issued 6 198 - - 204
Total movement in equity 6 198 - (392) (188)
Balance at 31 March 2012 475 4,079 838 919 6,311
Consolidated Statement of Financial Position
At 31 March 2012
Note Group Group
2012 2011
GBP000 GBP000
Non-current assets
Property, plant and equipment 2,173 2,951
Intangible assets 4,615 4,619
Deferred tax assets 2 2
Other receivables - 20
Total non-current assets 6,790 7,592
Current assets
Inventories 147 190
Trade and other receivables 2,898 3,490
Cash and cash equivalents 1,874 2,002
Total current assets 4,919 5,682
Total assets 11,709 13,274
Current liabilities
Other interest-bearing loans and
borrowings (80) (676)
Trade and other payables (2,889) (3,340)
Current tax payable (372) (423)
Accruals and deferred income (1,315) (1,392)
Other liabilities (243) (231)
Total current liabilities (4,899) (6,062)
Non-current liabilities
Other interest-bearing loans and
borrowings (23) (109)
Deferred tax liabilities (476) (604)
Total non-current liabilities (499) (713)
Total liabilities (5,398) (6,775)
Net assets 6,311 6,499
Equity attributable to equity holders
of the parent
Share capital 475 469
Share premium 4,079 3,881
Merger reserve 838 838
Retained earnings 919 1,311
Total equity 6,311 6,499
Consolidated Statement of Cash Flows
for year ended 31 March 2012
Note Group Group
2012 2011
GBP000 GBP000
Cash flows from operating activities
Profit for the year 1,100 926
Adjustments for:
Depreciation, amortisation and impairment 2,134 1,560
Net finance expense / (income) 10 (10)
Foreign exchange (loss)/gains (32) 18
Tax expense / (income) 158 385
Operating cash flow before changes
in working capital and provisions 3,434 2,879
Change in trade and other receivables 609 609
Change in inventories 43 (49)
Change in trade and other payables (544) 719
Cash generated from / (used in) Operations 3,542 4,158
Interest paid (24) (46)
Income tax paid (337) (230)
Net cash inflow/(outflow) from operating
activities 3,181 3,882
Cash flows from investing activities
Proceeds from sale of plant and equipment 4 -
Interest received 14 42
Acquisition of plant and equipment (183) (145)
Capitalised development expenditure (322) (246)
Acquisition of other intangible assets (872) (1,156)
Acquisition of Subsidiary net of cash
acquired - (329)
Net cash (used in) / generated by
investing activities (1,359) (1,834)
Cash flows from financing activities
Proceeds from the issue of share capital 204 -
Payment of finance lease liabilities (200) (653)
Repayment of Bank Loans (127) (52)
Repayment of Loan Notes (355) (54)
Dividends paid (1,492) (1,425)
Net cash used in financing activities (1,970) (2,184)
Net (decrease)/increase in cash and
cash equivalents (148) (136)
Exchange losses on cash and cash equivalents 20 -
Cash and cash equivalents at start
of year 2,002 2,138
Cash and cash equivalents at 31 March 1,874 2,002
Notes
(forming part of the financial statements)
1 Basis of preparation
Printing.com plc (the "Company") is a company incorporated and
domiciled in the UK.
The Group financial statements consolidate those of the Company
and its subsidiaries (together referred to as the "Group").
The Group financial statements are authorised for issue by the
Board of Directors on 6 June 2012.
The financial information does not constitute the Company's
statutory accounts for the years ended 31 March 2012 or 31 March
2011 (but is derived from those accounts). Statutory accounts for
2011 have been delivered to the registrar of companies, and those
for 2012 will be delivered in due course. The auditors have
reported on those accounts; their reports were (i) unqualified,
(ii) did not include references to any matters to which the
auditors drew attention by way of emphasis without qualifying their
reports and (iii) did not contain a statement under section 498 (2)
or (3) of the Companies Act 2006. The statutory accounts for the
financial year ended 31 March 2012 will be delivered to the
Registrar of Companies following the Company's Annual General
Meeting.
Cautionary note regarding forward looking statements
This announcement includes statements that are forward looking
in nature. Forward looking statements may involve known and unknown
risks, assumptions, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company to
be materially different from any future results, performance or
achievements expressed or implied by such forward looking
statements. Except as required by listing rules, disclosure and
transparency rules and applicable law, the Company undertakes no
obligations to update, revise or change any forward looking
statements to reflect events or developments occurring on or after
the date such statements are published.
2 Going concern
The Group has considerable financial resources and the
opportunities open to the Group continue to grow. As a consequence,
the Directors believe that the Group is well placed to manage its
business risks successfully despite the current uncertain economic
outlook. After making enquiries, the Directors have a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Cash flow forecasts indicate continuing cash inflows to ensure that
sufficient cash is available for future trading and dividends. The
Group's external funding is made up of bank loans which total
GBP0.10m against cash balances of GBP1.87m at the year end.
Accordingly they continue to adopt the going concern basis in
preparing the annual report and financial statements.
3 Segmental information
As in the prior year the Group's primary operating segments are
geographic being UK& Ireland, Europe and others. The segmental
analysis by nature of service is also consistent with the prior
year being conventional printing services, online printing services
and licence income.
This disclosure correlates with the information which is
presented to the Chief Operating Decision Maker, the Chief
Executive (CEO), who reviews revenue (which is considered to be the
primary growth indicator) by segment. The Group's costs, finance
income, tax charges, non-current liabilities, net assets and
capital expenditure are only reviewed by the CEO at a consolidated
level and therefore have not been allocated between segments in the
analysis below.
Of the Group revenue of GBP21,768,000, GBP13,433,000 was
generated in the UK (2011: GBP13,395,000). Revenue generated
outside the UK is primarily attributable to the Holland &
Belgium GBP7,258,000 (2011: GBP2,640,000), France GBP536,000(2011:
GBP455,000) and Republic of Ireland GBP392,000 (2011: GBP343,000).
No single customer provided the Group with over 10% of its
revenue.
Of the Group's non-current assets (excluding deferred tax) of
GBP6,788,000, GBP6,101,000 is located in the UK. Non-current assets
located outside the UK are in Holland (GBP663,000, 2011:
GBP938,000), France (GBP91,000, 2011: GBP48,000) and the Republic
of Ireland (GBP1,000, 2011: GBPnil).
Analysis by location of sales
UK & Ireland Europe Other Total
GBP000 GBP000 GBP000 GBP000
Period ended 31 March 2012
Segment revenues 13,781 7,794 193 21,768
Operating Expenses 20,468
Results from operating activities 1,300
Net finance income (42)
Profit before tax 1,258
Tax (158)
Profit for the period 1,100
Assets
Unallocated net assets 6,311
UK & Ireland Europe Other Total
GBP000 GBP000 GBP000 GBP000
Period ended 31 March 2011
Segment revenues 13,738 3,095 183 17,016
Operating Expenses 15,715
Results from operating activities 1,301
Net finance income 10
Profit before tax 1,311
Tax (385)
Profit for the period 926
Assets
Unallocated net assets 6,499
Analysis by type
Printing Printing Licence Total
services services Income
- online
sales
GBP000 GBP000 GBP000 GBP000
Period ended 31 March 2012
Segment revenues 7,399 13,324 1,045 21,768
Operating Expenses 20,468
Results from operating activities 1,300
Net finance income (42)
Profit before tax 1,258
Tax (158)
Profit for the period 1,100
Assets
Unallocated net assets 6,311
Analysis by type
Printing Printing Licence Total
services services Income
- online
sales
GBP000 GBP000 GBP000 GBP000
Period ended 31 March 2011
Segment revenues 2,640 13,323 1,053 17,016
Operating Expenses 15,715
Results from operating activities 1,301
Net finance income 10
Profit before tax 1,311
Tax (385)
Profit for the period 926
Assets
Unallocated assets 6,499
4 Taxation
Recognised in profit and loss
2012 2011
GBP000 GBP000
Current tax expense
Current year 459 588
Foreign tax 152 23
Adjustments for prior years (325) (179)
286 432
Deferred tax expense
Origination and reversal of temporary differences (252) (120)
Movement due to change in rate of tax (62) (45)
Adjustment in respect of prior year for intangibles 186 118
Total tax in profit and loss 158 385
The adjustment in the tax expense for prior years is primarily
due to R&D tax reclaims. These amounts are only recognised by
the Group when the claims have been completed and cash received.
The amounts reclaimed differ from the development costs capitalised
under IAS and therefore the difference is not recognised as part of
the tax base of these assets.
Reconciliation of effective tax rate
2012 2011
GBP000 GBP000
Profit for the period 1,258 1,311
Total tax expense (158) (385)
Profit after taxation 1,100 926
Tax using the UK corporation tax rate of 26
% (2011:28%) 327 367
Permanent differences 28 116
Overseas tax losses not recognised 12 33
Difference in overseas tax rate (22) (36)
Consolidation adjustments - 1
Adjustments in respect of prior periods -
current tax (325) (179)
Adjustments in respect of prior periods -
deferred tax 186 118
Movement due to change in tax rate (48) (35)
Total tax expense 158 385
The Group Tax Creditor amounts to GBP372,000
(2011:GBP423,000)
The deferred tax assets and liabilities as at 31 March 2012 have
been calculated using the tax rate of 24% which was substantively
enacted at the balance sheet date.
Further reductions to the UK corporation tax rate have been
announced in the March 2012 Budget which have not been
substantively enacted at the balance sheet date but are expected to
impact on future tax charges. It is proposed to reduce the rate by
another 1% to 23% by 1 April 2014. These changes are expected to be
enacted separately each year and have not been recognized in these
financial statements.
5 Earnings per share
The calculations of earnings per share are based on the
following profits and numbers of shares.
2012 2011
GBP000 GBP000
Profit after taxation for the financial year 1,100 926
Weighted average number of shares.
2012 2011
Number of Number of
Shares shares
For basic earnings per ordinary share 47,302,191 45,407,444
Exercise of share options 203,901 500,175
For diluted earnings per ordinary share 47,506,092 45,907,619
6 Dividends
2012 2011
GBP000 GBP000
Final dividends paid in respect of prior year
but not recognised as liabilities in that year 993 932
Interim dividends paid in respect of the current
year 499 493
Total dividend paid in the year 1,492 1,425
After the balance sheet date dividends of GBP713,000/1.50p per
qualifying ordinary share (2011: GBP993,000/2.10p per qualifying
ordinary share) were proposed by the Directors. The dividends have
not been provided for.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EASKFEADAEFF
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