Final Results

RNS Number : 0838T
Printing.com plc
01 June 2009
 



FOR RELEASE  

7.00AM

1 June 2009

PRINTING.COM PLC

('Printing.com' or 'the Group')

Specialist retail chain with 283 Outlets opened and pending across the UK and Ireland


Preliminary Results for year ended 31 March 2009




2009

2008

Change





Total Retail Sales

£26.29m

£24.58m

+7.0%





Turnover

£14.47m

£13.48m

+7.3%

EBITDA

£3.27m

£3.67m

-10.9%

Operating Profit

£1.93m

£2.29m

-15.7%

Profit Before Tax

£2.06m

£2.42m

-14.9%





Earnings Per Share - Basic

3.28p

3.64p

-9.9%

EPS - Fully Diluted

3.27p

3.51p

-6.8%

Dividend 

3.15p

3.00p

+5.0%

Special Dividend

2.00p

-  






Capital expenditure

£0.59m

£1.26m

 

Net Cash

£3.39m

£3.50m

   

Net Funds

£1.81m

£1.08m






Number of Outlets

283

249



  • Outlets increased by 34 

  • Master Licence Agreement granted in the US

  • Profit in line with market expectations

  • Remaining profitable and cash generative in difficult market conditions

  • Ordinary dividend increased

  • Special dividend granted


For further information:


Printing.com plc

Tony Rafferty (Chief Executive)

Alan Roberts (Finance Director)



07966 517 336

0161 848 5713

Cubitt Consulting

Brian Coleman-Smith / Nicola Krafft / James Verstringhe


020 7367 100

Brewin Dolphin Ltd (Nominated Adviser)


Mark Brady

0845 213 4730

  Background note:


Printing.com


In the UK & Ireland Printing.com offers a broad product range including leaflets, booklets, postcards, promotional cards, invitations, letterheads and business cards to consumers and small and medium sized companies. Unlike its competitors, Printing.com's Stores and Franchises do not depend on any printing equipment on location. The Group's printing and ancillary equipment is based at the centralised Production Hub with the head office in Manchester. All work is produced in full four colour rather than two colour. The printing sector has traditionally been served by smaller printing companies or other On Demand Printers and is estimated to be worth some £1- £2 billion.


Printing.com has three routes to market: Franchise Stores, Bolt-on Franchises and Company owned Stores.


A complete list of Printing.com's active Outlets in the UK & Ireland is included at the end of the release.

 

 PRINTING.COM PLC

('Printing.com' or 'the Group')

Specialist retail chain with 283 Outlets opened and pending across the UK and Ireland


Preliminary Results for year ended 31 March 2009


CHAIRMAN'S STATEMENT



Trading Results


Total Retail Sales ('TRS'), the Company's estimate of the value of sales to the end user (via both its Franchise and directly owned outlets), increased 7.0% to £26.29m (2008:£24.58m). Turnover increased 7.3% to £14.47m  (2008: £13.48m) whilst Profit before Tax ('PBT') decreased by 14.9% to £2.06m (2008:£2.42m).


Previously, we would have anticipated EBITDA to advance as volumes increased. This has not been the case in the year under review, reflecting some erosion of operating margin. This has been due to an increase in the provision for bad debts, marketing subsidies designed to support sales through our outlets, and a greater proportion of discounted orders.


The Board is mindful that the year under review marks the first year, since the Company's move to AIM, that earnings have not progressed. Ordinarily, we would be duly disappointed with such a result but, given the extremely challenging economic situation, we believe this represents an acceptable outcome. 


Cash


Your Company closed the year with cash of £3.39m (2008:£3.50m). Investment in capital equipment, including the on-going development of the Company's Flyerlink software, totalled only £0.59m (2008:£1.26m). None of the capital expenditure was financed (2008:£0.50m).


Return of Shareholder funds  


The Board has been keen to advance the return of funds to Shareholders by its progressive dividend policy and, more recently, via the buying back of Company shares. Whilst the dividend has indeed progressed, the buying back of a material volume of shares has proved impractical due to the lack of market liquidity. 


After careful consideration of the Company's reserves, cash position and prospects moving forward, the Directors believe that, notwithstanding the need to be prudent in these present difficult economic circumstances, the Company remains in a position to return additional funds to Shareholders. Accordingly, it is the Directors' intention to do this via the declaration of a Special Dividend. 


Share Buy Backs 


During the year under review, 768,702 shares were bought back into Treasury for a total consideration of £263,000. 


Final Dividend 


Your Board is proposing a final dividend of 2.10p for the year, to be paid on 23 July 2009 to Shareholders on the register at the close of business on 26 June 2009. This makes a total dividend for the year of 3.15p per ordinary share (2008:3.00p). 


Special Dividend


The Directors are declaring a Special dividend of 2.00p per qualifying ordinary share, amounting to £887,000, payable on 26 June 2009 to shareholders on the register as at 12 June 2009

 People at Printing.com


In these difficult times, I am mindful of the additional effort of all of our people within the Printing.com network but would particularly like to extend my sincere thanks to our Franchise Partners for their efforts.


Outlook


Since the year end, trading across the UK and Ireland has continued at a similar underlying level. Whilst at this juncture we are not seeing growth in TRS, we are attracting a record level of new clients and remain of the belief that the Printing.com model is proving significantly more resilient than many others in the sector.  


Whilst we realise we are not immune to the possibility that some Franchisees may not continue, or that certain Bolt-on Franchisees may follow alternative strategies, we believe that the scope for network growth during the current year remains a realistic ambition. Indeed, recent marketing initiatives to promote a Bolt-on Franchise opportunity have once again produced a strong pipeline of prospective partners. 


Outside of the UK and Ireland, our New Zealand partners continue to make solid progress and reflect the Board's belief in the scope for exporting the model. Printing.com France is making progress and is on the cusp of making a positive contribution. The grant of a Master Licence for the US is clearly a significant opportunity, albeit operations are still at a very early stage. Whilst these initiatives collectively contribute very little at present in fiscal terms, we believe they continue to represent an important opportunity.


Whilst we remain cautious about the prospects for progress, we believe that, as and when the economic situation across the UK and Ireland improves, Printing.com will be well-placed to capitalize on its position.



George Hardie

Chairman

1 June 2009

 

 

 CHIEF EXECUTIVE'S STATEMENT


 


31 March 2009

31 March 2008

Company Owned Stores

7

4

Territory Franchise Stores

35

40

Bolt-on and Boutique Franchises

241

205




Total

283

249



 

Estate Development


This year, in common with recent years, we have continued to record a steady increase in the total number of Printing.com outlets across the UK and Ireland, with the estate, as of the year end, standing at 283 outlets, an increase of 34 during the year. The Bolt-on format continues to be the driver for this expansion.  


During the year under review, again in common with recent years, the number of new franchise licences granted, 62, is far greater than growth in the number of outletsThis is because we are not immune to some instances of termination and also reflects the complementary nature of the Bolt-on franchise format.


Prior to adding the Printing.com element, Bolt-on Franchises ordinarily start out pursuing an independently formulated business model centred on the printing, graphic arts or web design sectors. 

Accordingly, the plural nature of their offering increases the likelihood that, from time-to-time, the owners of these businesses may seek to pursue a strategy less conducive to Printing.com. In these instances, our primary objective is the continuance of the service to the Printing.com client base, and the preservation of employment opportunities for Printing.com operators. These situations are often resolved by one of the business partners, employees or competitors 'buying out' the Printing.com element, or the sale to a neighbouring franchisee. This may involve the termination of one franchise agreement but also the contemporaneous grant of a new licence. 


Such occurrences could be dismissed as 'undesirable churn' we still believe that they simply reflect a characteristic of the independent entrepreneurs who we partner with. Over the course of the current year, we anticipate an increase in these instances due to the general economic situation. However, we continue to believe that, notwithstanding this, we will again achieve real growth in the size of the network and the estate will exceed 300 outlets by the end of the year.


 Production Hub and Infrastructure


The Production Hub infrastructure is well bedded-in, and we continue the ongoing refinement of operational processes whilst always seeking greater efficiency. We remain of the view that we have TRS capacity in excess of £40million within the Manchester facility. Accordingly, very little additional investment in the plant is planned at this juncture. 


This has, however, been an important year in the on-going development of Flyerlink, the Company's proprietary software. Much of this development relates to the addition of certain 'foundations' that allow us to deal with Master Licence complexities beyond simply multi-language capabilities.


Whilst Flyerlink has always provided the link between the Franchisee and the production centre, 'my.printing.com' provides a suite of online tools that enhance the interaction between the Printing.com Franchisee and the end user. During the course of the year, the Company significantly enhanced the 'my.printing.com' portal, notably adding Kodak's 'Smart Review' software to facilitate online proofing. 


The complex, design-orientated and consultative led-nature of the typical Printing.com order means that these tools are not intended to replace the franchisee but simply to provide a more efficient ordering, proofing, artwork approval and billing experience for all concerned. 


In the course of the current year, we plan to include template systems to facilitate business card name changes and the like. We believe that this functionality will further augment the Printing.com Bolt-on Franchise by providing not only low-cost print and marketing assistance, but also a complete e-commerce solution 'in a box'. 


New Zealand and Iceland Master Licences


The Company's Master Licence programme enables companies in other geographic territories, wishing to emulate the success of Printing.com across the UK and Ireland, to license the Printing.com systems. This generates revenue channels for your Company in terms of an initial licence fee, circa 3% of TRS for the given partner, and 20% of licence fees charged in respect of the grant of local outlets. For the partner, we believe this offers good value, in that they are able to utilize all the collateral and know-how acquired by Printing.com together with, and very importantly, the Company's Flyerlink software. 


The Company's established Master Licence partner in New Zealand, PrintStop, continues to enjoy success with the expansion of their network of outlets, embracing the 'powered by Printing.com' insignia. The network presently stands at 46 outlets. Operations in Iceland remain at an early stage. 


Grant of US Master Licence 


During the year we are very pleased to have granted an additional master licence, covering the US. This licence has been granted to Raintree Graphics, a commercial printer in JacksonvilleFlorida. Following training in the UK and the US, they have commenced operations with Printing.com Stores in both Jacksonville and Gainesville and 5 Bolt-on Franchisees have also been granted. Whilst it is little more than two months since the first orders were taken, we remain optimistic about the potential for the development of Printing.com initially in the South East of the country and, in the fullness of time, across the US.


France and Australia


We have previously set out our intention to establish Printing.com operations in both France and Australiawith the former reliant on the Manchester Hub and the latter embracing third party production. 


Following several interesting avenues of exploration, during which, and on commercial terms, an Option was taken out over Australia, our initiatives in this respect have not progressed. We have elected not to proceed and establish operations ourselves until the economic cycle improves. 


The French operations are at a more advanced stage, with 10 franchises now generating regular transactions. Indeed several French franchisees are producing operational metrics that would be consistent with any accomplished franchise in the UK. It is also still our intention to open two stores in France as and when suitable opportunities arise.


We believe that the components are now in place for Printing.com to take meaningful steps forward during the present financial year and it remains our objective of progressing a management buy-out/management buy-in at a suitable juncture of the French business.


Websites by Printing.com


Over the year we have continued to invest in our 'websites solution' and believe that the offering has evolved, in terms of the functionality offered to the client and the ease of use for the Franchisee. Whilst to date this has not translated into a material revenue stream, we remain convinced of its strategic importance in terms of vending new media solutions in parallel with printed material. 

 

Network Partners


The aim of the network partner programme was to open up the Printing.com network to reputable vendors of alternative printed items, such as pens, work apparel, office products and the like.  During the year, the initial pilot group was extended and now includes more than a third of the network. It is anticipated that the offering will be made available to all Franchisees during the course of the current year. Promotional items of this ilk are often an accessory to the nucleus of an advertising campaign. Thus, the timing of the launch proved unfortunate.  


Whilst revenues from this initiative remain modest, we remain committed to exploring what we believe to be the inherent logic of making available more services to our franchisees, and being a 'one-stop-shop' for our clients' promotional needs. 


Environment


In all aspects of Printing.com operations we seek to reduce the environmental impact of the business. This is reflected by the reaffirming of our ISO 14001 status, embracing our initiatives to increase the proportion of FSC certified papers, reduce packaging and minimise waste.


In addition, we are pleased to continue our support for the 'Tree Appeal with David Bellamy', whereby clients' orders equate to trees planted. Currently we stand on the cusp of achieving our goal of planting 50,000 trees and have recently pledged to raise this target to 100,000 trees over the coming years. 


Current Trading 


Following on from a drop in trading levels in November 2008, trading remained 'steady' at the lower level, during the remainder of the year under review and, indeed, the subsequent two months. If trading remains at this level for the course of the current year, then TRS will be slightly below the previous year. 


Compared to historic levels, a greater proportion of transactions are carried out at discounted levels, pursuant to various monthly and seasonal offers. We remain realistic and believe that these discounts are necessary for the foreseeable future to assist our Franchisees. 


The Company continues to attract a record level of new clients, attributable to the increased level of centralised marketing, the potency of the various promotional offers and the closure of many small local printers who were previously in competition. However, the overall yield per client has reduced and certain market segments that were previously productive, such as estate agents and recruitment companies, have declined significantly.  


Printing.com has always attracted corporate clients and public sector professionals in addition to its core marketplace of small and medium sized enterprises ('SME'). These larger clients generally turn to Printing.com for low value orders. It is our belief that they are attracted to Printing.com as it is easier to transact these small orders with the Company, than via internal procurement routes. 


Initiatives have been developed and launched to better position your Company within this corporate and public sector marketplace. Centered on the premise of not seeking to replace the existing printer, but being useful for urgent, awkward, low order values and low volumes. To this end, over one hundred training days for Franchisees have been delivered at sessions around the UK, with the objective of the entire estate being exposed to this initiative over the coming months. We are aware that this 'pitch' has been well received by managers within the marketing departments of various high profile brands and remain optimistic that it will add material revenues during the course of the year.  




Tony Rafferty

Chief Executive 

1 June 2009

  

 

 

FINANCIAL REVIEW


Total Retail Sales (TRS) 

The Group's key metric of Network growth, across the UK and Ireland, is TRS, being the estimated retail price paid by the client for product sourced from the Group's Production Hub. The ongoing development of Printing.com is clearly illustrated with estimated TRS increasing by 7.0% to £26.29 m (2008:£24.58m).

Like For Like TRS

This metric reports on the like for like progress of our Territory Franchisees (or equivalent Group owned operations) that have operated for a minimum of three years. Therefore, the earliest figures that could be reported for a Territory Franchise are its third versus second year. In presenting these figures we believe that it is essential to consider both the performance of the Store within the Territory Franchise and the growth in revenues from its associated Bolt-On Franchises. On this basis like for like growth during the year under review was 10.73% (2008:16.44%) with 38 (2008:29) Territory Franchises (or Group owned equivalents) contributing to this metric.  

Revenue

Overall revenue increased by 7.3% from £13.48m to £14.47m. Network growth continues to be driven by the increase in the number of Bolt-on Franchises.  

Gross Profit

The Group's simple definition of Gross Profit is revenue less direct materials (including the cost of distribution, when made direct to customers).

Gross Profit increased by 8.1% from £9.01m to £9.74m. In percentage terms it remained relatively constant at 67.3% (2008:66.9%) of revenue.

EBITDA

At £3.27m (2008:£3.67m) EBITDA decreased by 10.9%. Although TRS improved by 7%, the Group's initiative to support network marketing activity and provisions for doubtful debts led to EBITDA decreasing by £0.40m. 

Pre-Tax Profit

The Group recorded a pre tax profit of £2.06m (2008:£2.42m) being 14.2% (2008:18.0%) of Group revenue and 7.8% (2008:9.8%) of TRS.

Staff costs increased in the year to £3.60m (2008:£3.22m) and rose as a percentage of revenue from 23.9% to 24.9%. The increase in the number of Group Stores raised head count, staff costs and operational overhead. The depreciation and amortisation charge for the year was £1.33m (2008:£1.38m) falling slightly from last year's peak.

Interest Received and Charged

Interest received of £0.18m (2008:£0.24m) reflects interest on the cash balances held and interest charged to Franchisees on loans to them from Printing.com. Interest paid of £0.11m (2008:£0.19m) primarily on lease finance repayments.

Taxation

In the year the standard rate for tax was 28% (2008:30%). The charge for the current year is £0.60m or 29.2% of PBT (2008:£0.79m or 32.6%). 

The effective tax rate was closer to the standard rate in the period due to disallowed expenses being offset by timing differences.

Earnings Per Share (EPS)

Basic EPS achieved was 3.28p (2008:3.64p), the weighted average number of shares used was 44,485,293. Diluted EPS achieved was 3.27p (2008:3.51p), the weighted average number of shares used was 44,702,853. The year closed with 44,993,465 ordinary shares in issue, with 643,702 of these held in Treasury by the Group. 

Cash Flow

At the year end the Group had cash balances of £3.39m (2008:£3.50m) and Net Funds (comprising cash less finance lease creditors) of £1.81m (2008:£1.08m). Operational cash inflow remained strong at £3.52m (2008: £4.06m). The most significant cash outflow being dividends paid of £1.36m (2008: £1.30m).  

Capital Expenditure

The total expenditure for the year was £0.59m (2008:£1.26m). The major item was Software development and computing infrastructure £0.52m. 

Share Capital and Share Options

Third party options over 325,000 shares (0.7% of the total called up share capital) were exercised during the year and were satisfied from treasury. There were no options granted.

During the year the Company purchased 768,702 (1.7% of the total called up share capital) shares to be held in treasury for a consideration of £263,000. The maximum number of shares held by the Company during the year was 643,702 (1.4% of the total called up share capital). The shares are to be held in treasury by the Company with the intention of satisfying future exercise of share options.

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. During the year the Board reviewed its treasury policies and took the decision to split the Group's deposit reserves between a number of mainstream banks. 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 limited to the fixed element of finance lease or hire purchase agreements. The Group uses leasing or hire purchase at periods of up to 5 years to finance purchases of some of its assets where it is considered to be a more effective use of funds.

The Group has no material overseas assets or liabilities and thus any currency movements have no material impact.


Alan Q. Roberts 

Finance Director

1 June 2009

 

  Group Consolidated Income Statement

for the year ended 31 March 2009



Note



2009

2008






£000

£000









Revenue

3



14,468

13,479









Changes in inventory of finished goods and work in progress




1

5


Raw materials and consumables used




(4,727)

(4,473)







 

Gross profit




9,742

9,011









Staff costs




(3,598)

(3,218)


Other operating charges




(2,877)

(2,123)


Depreciation and amortisation




(1,334)

(1,378)







Total expenses




(7,809)

(6,719)







Operating profit




1,933

2,292









Financial income




238

316


Financial expenses




(108)

(187)







Net financing income




130

129














Profit before taxation




2,063

2,421









Taxation

4



(603)

(789)







Profit for the year attributable to equity holders of the Parent





1,460


1,632







Basic earnings per share

5



3.28p

3.64p


Diluted earnings per share

5



3.27p

3.51p





The operating profit for the year arises from the Group's continuing operations.


  Statement of Changes in Equity

Group - year ended 31 March 2009


Share

capital

Share

premium

Merger

reserve

Retained

earnings


Total


£000

£000

£000

£000

£000







Profit for the year

-

-

-

1,460

1,460


Total recognised income and (expense)

-

-

-

1,460

1,460







Equity settled share based payments

-

-

-

-

-

Tax on equity settled share based payments

-

-

-

-

-

Own shares acquired

-

-

-

(263)

(263)

Shares issued

-

10

-

65

75

Dividends paid

-

-

-

(1,364)

(1,364)


Total movement in shareholders' funds 

-

10

-

(102)

(92)







Opening shareholders' funds at 1 April 2008


450


3,871


211


2,626


7,158


Closing shareholders' funds at 31 March 2009


450


3,881


211


2,524


7,066


Group - year ended 31 March 2008


Share

capital

Share

premium

Merger

reserve

Retained

earnings


Total


£000

£000

£000

£000

£000







Profit for the year

-

-

-

1,632

1,632


Total recognised income and (expense)

-

-

-

1,632

1,632







Dividends

-

-

-

(1,300)

(1,300)

Issue of new shares

3

38

-

-

-

Own shares acquired

-

-

-

(82)

(82)

Equity settled share based payments

-

-

-

71

71

Tax on equity share based payments

-

-

-

(11)

(11)


Total movement in shareholders' funds 

3

38

-

310

351







Opening shareholders' funds at 3 April 2007


447


3,833


211


2,316


6,807


Closing shareholders' funds at 31 March 2008


450


3,871


211


2,626


7,158



  

Group Balance Sheet

At 31 March 2009



Group



2009  

2008  



£000

£000

Non-current assets




Property, plant and equipment


4,328

5,217

Investments in subsidiaries


-

-

Intangible assets


1,283

1,139

Deferred tax assets


2

25

Other receivables


253

470



Total non-current assets


5,866

6,851

 

Current assets

 




Inventories


110

109

Trade and other receivables


3,313

3,210

Cash and cash equivalents


3,391

3,502

 

Total current assets


 

6,814

 

6,821

 

 

Total assets


 

 

12,680

 

 

13,672

 

Current liabilities

 

 




Other interest-bearing loans and borrowings


(689)

(804)

Trade and other payables


(1,887)

(1,759)

Current tax payable


(370)

(377)

Accruals and deferred income


(1,057)

(1,094)

Other liabilities


(165)

(182)

 

Total current liabilities


 

(4,168)

 

(4,216)

 

Non-current liabilities

 

 




Other interest-bearing loans and borrowings


(889)

(1,613)

Deferred tax liabilities


(557)

(685)

 

Total non-current liabilities


 

(1,446)

 

(2,298)

 

Total liabilities


 

(5,614)

 

(6,514)

 

Net assets


 

7,066

 

7,158

 

Equity attributable to equity holders of the parent




Share capital


450

450

Share premium


3,881

3,871

Merger reserve


211

211

Retained earnings


2,524

2,626

 

Total equity 


 

7,066

 

7,158



  


Group Cash Flow Statements

for year ended 31 March 2009


Group


2009  

2008  


£000

£000

Cash flows from operating activities



Profit for the year

1,460

1,632

Adjustments for:



Depreciation, amortisation and impairment

1,334

1,378

Financial income

(238)

(316)

Financial expense

108

187

Gain on sale of property, plant and equipment

2

-

Equity settled share-based payment expenses

-

71

Foreign exchange gains

61

75

Taxation

603

789

 

Operating cash flow before changes in working capital and provisions


3,330


3,816

Decrease in trade and other receivables

114

269

Increase in inventories

(1)

(5)

Increase/(decrease) in trade and other payables

76

(17)

 

Cash generated from Operations

 

3,519

 

4,063

Tax paid

(715)

(344)


Net cash inflow/(outflow) from operating activities

2,804

3,719


Cash flows from investing activities



Proceeds from sale of plant and equipment

9

150

Interest received

177

241

Acquisition of plant and equipment

(70)

(235)

Capitalised development expenditure 

(522)

(530)

Dividends received

-

-

 

Net cash (outflow)/inflow from investing activities

 

(406)

 

(374)

 

Cash flows from financing activities



Proceeds from the issue of share capital

65

41

Repurchase of own shares

(263)

(82)

Interest paid

(108)

(187)

Payment of finance lease liabilities

(839)

(1,165)

Inter company transfers

-

-

Dividends paid 

(1,364)

(1,300)

 

Net cash (outflow)/inflow from financing activities

 

(2,509)

 

(2,693)

 

Net increase/(decrease) in cash and cash equivalents

 

(111)

 

652

Exchange losses on cash and cash equivalents

-

(5)

Cash and cash equivalents at start of year

3,502

2,855

 

Cash and cash equivalents at 31 March 

  

3,391

 

3,502


  

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 1 June 2009.  

The Group financial statements have been prepared by the Directors in accordance with International Financial Reporting Standards as adopted by the EU ('Adopted IFRSs') 

The financial information does not constitute the Company's statutory accounts for the years ended 31 March 2009 or 31 March 2008 (but is derived from those accounts).  Statutory accounts for 2008 have been delivered to the registrar of companies, and those for 2009 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 statements under section 237 (2) or (3) of the Companies Act of 1985. The statutory accounts for the financial year ended 31 March 2009 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. 

2       Going concern

The Group has considerable financial resources and the number of Franchise outlets continues to grow. This is expected to continue due to the comparatively low level of capital required to set up a franchise under the Printing.com business model. 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. Accordingly they continue to adopt the going concern basis in preparing the annual report and financial statements.

Further information regarding the Groups business activities together with the factors likely to affect its future development, performance and position is set out in the business review on pages 3 to 9.   

 

3         Revenue

 

Segmental analysis

The principal components of revenue are the design and production of publicity and marketing material, and franchise fee income. All of the revenue is in one continuing business segment being the development of the Printing.com model and originates principally in the United Kingdom and Republic of Ireland

Analysis by geographical destination

 
               Revenue
             Total Assets
    Capital expenditure
 
 
2009
2008
2009
2008
2009
2008
 
 
£000
£000
£000
£000
£000
£000
 
 
 
 
 
 
 
 
 
United Kingdom
13,372
12,738
5,672
6,767
585
1,186
 
Republic of Ireland
708
684
319
356
-
5
 
Rest of the world
388
57
112
35
7
68
 
 
 
 
 
 
 
 
 
 
14,468
13,479
6,103
7,158
592
1,259
 
 
 
 
 
 
 
 

 


Analysis by type


   


2009

2008


£000

£000




Sale of goods

13,275

12,571

Services rendered

1,105

856

Royalties

88

52


 

 

Total revenue

14,468

13,479


 


 

4        Taxation

Recognised in the income statement

    

2009

2008


£000

£000

Current tax expense




Current year

742

808

Foreign tax

8

4

Adjustments for prior years

(42)

(290)


 

708

 

522

Deferred tax expense



Origination and reversal of temporary differences

(108)

31

Movement due to change in tax rate

-

(49)

Adjustments for prior years

3

285

 

Total tax in income statement

 

603

 

789

 

Reconciliation of effective tax rate

    

2009

2008


£000

£000




Profit for the period

2,063

2,421

Total tax expense

(603)

(789)

 

Profit after taxation

 

1,460

 

1,632

 

Tax using the UK corporation tax rate of 28% (2008: 30%)

 

578

 

726

Permanent differences

42

54

Overseas tax losses not recognised

1

4

Effect of equity settled share based payments

-

8

Deferred tax on shares

23

51

Adjustments in respect of prior periods - current tax

(42)

(290)

Adjustments in respect of prior periods - deferred tax

3

285

Movement due to change in tax rate

-

(49)

 

Total tax expense

 

603

 

789


Notes (continued)

 

5        Earnings per share


The calculations of earnings per share are based on the following profits and numbers of shares.

    

2009

2008


£000

£000




Profit after taxation for the financial year

1,460

1,632

Weighted average number of shares.

    

2009

2008


Number of

shares

Number of

Shares




For basic earnings per ordinary share

44,485,293

44,892,441

Exercise of share options

216,330

1,654,969

 

For diluted earnings per ordinary share

 

44,701,623

 

46,547,410

 

6        Dividends

 





2009

£000

2008

£000




Final dividends paid in respect of prior year but not recognised as liabilities in that year

896

850

Interim dividends paid in respect of the current year

468

450

Total dividend paid in the year

1,364

1,300

After the balance sheet date dividends of £931,000, 2.10p per qualifying ordinary share (2008: £896,000/2.00p per qualifying ordinary share) were proposed by the Directors. The dividends have not been provided for.

  

Customer

Region

Town

Post Code

Sign It (Nottm) Ltd

Central England

Beeston, Nottingham

NG9 2AY

Graphic Results

Central England

Belper

DE56 1BA

East Birmingham Store

Central England

Birmingham

B26 3JR

South West Birmingham Store

Central England

Birmingham

B16 9RD

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Central England

Birmingham

G3 8LZ

Artichoke Design Ltd

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Birmingham

B18 6NN

Vicki Interiors Limited

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Burntwood

WS7 3GL

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Central England

Buxton, Derbyshire

SK17 9PA

Graphic Results

Central England

Chesterfield

DE56 1TD

Coventry Store

Central England

Coventry

CV2 4BE

ADECS Ltd

Central England

Coventry South

CV4 8HX

Image I.T. Limited

Central England

Daventry

NN11 8RY

Sportwise Marketing Ltd t/a Immediate Design

Central England

Derby

DE1 3QB

Synergy

Central England

Derby - Crewton

DE24 8SR

Multiprint & Embroidery Limited

Central England

Derby - Littleo

DE23 6FP

FSeven Design Solutions

Central England

Digbeth

B9 4AA

Kualo Limited

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Gloucester

GL2 2AT

Hussellworks 

Central England

Halesowen

B63 3HR

Clientel Systems Limited

Central England

Kibworth

LE8 0HS

Leicester Store

Central England

Leicester

NG1 6DQ

Datatron Limited

Central England

Lichfield 

WS13 6LL

For Colour Ltd

Central England

Lincoln

LN2 4US

Trident Design & Print

Central England

Lutterworth

LE17 4EE

Queensway Print

Central England

Milton Keynes

MK1 1LS

For Colour 

Central England

NewarkNottingham

NG24 1LE

Northampton Store

Central England

Northampton

NN1 5QJ

Custard Creative

Central England

Northampton

NN3 6WL

Nottingham Store

Central England

Nottingham

L2 2HF

Peterborough Store

Central England

Peterborough

PE2 8AN

ITS-Ideas Taking Shape Ltd

Central England

Rugby

CV21 2SD

Boomerang Print Design Ltd

Central England

Solihull

B91 3RT

Runtime Print Ltd

Central England

Telford

TF2 8AJ

Wolverhampton Store

Central England

Wolverhampton

WV1 4BL

Amethyst Consultancy

Central England

Martin, Lincolnshire

LN4 3QH 

Oakley media

Central England

Lutterworth, Leciestershire

LE17 4JA

Photprint

Central England

Leek, Staffordshire

ST13 5JH

Red Hot Media

East

Lowestoft

NR33 0AA

Goldengate Productions

East

Suffolk

IP30 9QS

Keith Nolan Limited

Ireland

Athlone

EE1 1EE

Kwik Kopy

Ireland

Ballymena

BT43 6EB

Malik Bond

Ireland

Belfast - South

BT7 2JA

Twist Design

Ireland

County Donegal

EE1 1EE

Dublin Store

Ireland

Dublin

Dublin 2

Trivium Limited

Ireland

Maynooth - Coun

EE1 1EE

Creative State Limited

Ireland

Naas - County K

EE1 1EE

Desktop

Ireland

Omagh 

BT78 1DW

Tullow Manufacturing Limited

Ireland

Tullow

EE1 1EE

Thomas Hughes & Sons Ltd

Ireland

Wexford

EE1 1EE

Central London Store

London

Baker Street

BS1 3LZ

Alpha to Omega

London

Beckenham

BR3 3HX

Plug and Play Design

London

Bramley

GU6 8JJ

Fireworks Design and Print

London

Catford

FK9 5GQ

Blank Canvas Design & Print

London

Chigwell, Essex

IG7 5PD

DNA Creative

London

Clapham

SW11 1TH

City & Clerkenwell Store

London

Clerkenwell

EC1M 5QA

Print Express

London

Colindale 

NW9 5DL

Last Print LLP

London

Docklands E16

E14 0JY

Ealing Store

London

Ealing

W13 8SB

0800 Promote Ltd

London

Finchley

N3 1TR

Creekside Press

London

Greenwich

SE10 9QX

Guildford Store

London

Guildford

GU2 4BE

Hampstead Store

London

Hampstead

NW1 6UY

Colour Division

London

Hampstead

NW6 1SD

Digipix Ilford

London

Ilford

IG1 4DU

Envisualise Ltd

London

Kingston

KT2 6LX

London Office Services

London

London 

W1G 8JR

WestEast Desgn and Print

London

Hammersmith

W6 9NH

1st Creative

London

London SE1

SE1 3ER

Expocentric Communication Ctrs

London

Mayfair

W1S 4LW

Endgold Ltd

London

Nottinghill

W11 3HT

Orpington Store

London

Orpington

BR6 0JY

Cre8Business Image

London

Potters Bar

EN6 5AS

Reading Store

London

Reading

RG1 4QA

Ditto Office Services Ltd

London

Sevenoaks

TN13 1AS

London Print Compamy

London

Shaftesbury Avenue

WC2H 8EB

DNA Solutions UK Limited

London

Slough

SL1 4JG

Promoworx

London

South Woodford E8

E18 2QL

Toppers Print & Design Ltd

London

Stevenage

SG1 3HR

Cloudmire Limiter

London

Swiss Cottage

NW3 6JP

Kink Design

London

Thornton Heath

EC2A 3LT

Wernham Printers Ltd

London

Tottenham

N17 6QD

FiveFish Limited

London

Twickenham

TW12 1JT

Printroomsoho Ltd

London

Wardour Street

W1F 0TS

Watford Store

London

Watford

WD17 1RA

Medialink World

London

Whtechapel

E1 1HL

Creographics

London

Wimbledon

SW19 8TY

Propulsion

London

Watford

WD24 5BJ

Latitude Graphic Design

London

Mortlake

SW14 8JN

Positive Print and Design

London

ChelmsfordEssex

CM1 1PE 

BDI

London

BeaconsfieldEssex

HP9 2PE 

Centrepoint Print

Midlands

Birmingham - Erdington

B23 6LR

Colour Graphics

Midlands

Burntwood

WS7 3GL

Cambridge Graphics

Midlands

Great Cambourne

CB23 5BH

RDS Networks

Midlands

Hall Green

B28 8AS

Pixel Design

Midlands

Kidderminster

DY11 6XB

Kaleidoscope Press Ltd

Midlands

Leamington Spa

CV33 9GX

Ozmedia Print Solutions

Midlands

Loughborough

LE11 5AA

Pewter Design

Midlands

Market Harborough

LE16 7DS

Interactive Marketing

Midlands

Meregreen

B1 3ND

St Ives Quickprint Ltd.

Midlands

St Ives

PE27 3WS

Rhubarb & Custard

Midlands

Sutton Coldfield

B72 1NE

Modus Print

Midlands

Worcester

WR1 1JZ

Raphael Design

Midlands

Lichfield

WS14 9DX

Coastal Colour

North East

Amble, Northumberland

NE65 0BZ

Documentshop.com limited

North East

Barnsley

S70 2HG

Smart Card International Limited

North East

Beverley

HU17 0TB

FRO Print

North East

Birtley, County Durham

DH3 2QG

Fountains Associates Limited

North East

Bishop Auckland

DL14 7EL

Dark Matter Design

North East

Bishop Auckland

DL14 7EL

Bradford Store

North East

Bradford

BD1 3BA

John Siddall (Printers) Ltd

North East

Cleckheaton

BD19 3JL

Total Graphics

North East

Darlington

TS18 3TQ

Doncaster Store

North East

Doncaster

DN1 1HT

Tigher Limited

North East

Durham

DH1 1RF

Washington Direct Mail

North East

Gateshead

NE11 0SH

Feel Design

North East

Goldsborough

HG5 8NJ

Loyalty Matters Ltd

North East

Harrogate

HG3 2XA

Winny Limited

North East

Hartlepool 

TS25 5TG

Peter Matthews Limited

North East

Huddersfield

HD8 0NQ

Pink Custard Design Ltd

North East

Hull

HU1 1PS

Ryedale Printing Works Ltd

North East

Kirbymoorside

YO62 6YB

Leeds Store

North East

Leeds

LS1 3DL

The Factory Partnership Ltd

North East

Leeds

LS12 2DS

Ideas Start Here Ltd

North East

Leeds

LS8 2HU

Middlesbrough Store

North East

Middlesbrough

TS1 1LY

Mix Marketing Ltd

North East

Mirfield

WF14 8AH

Stait Photography

North East

Morpeth

NE61 1HE

Newcastle Store

North East

Newcastle

B5 4JL

Direct Business Products

North East

Newcastle

NE12 9UP

Via Creative Consultants Ltd

North East

Redcar

TS10 5SH

Bluprint

North East

Rotheram

S60 2LZ

Desk Top Publishing Ltd

North East

Scunthorpe

DN15 6LJ

Sheffield Store

North East

Sheffield

S1 4GF

Runway 24

North East

Sheffield - Hillsborough

S6 4GH

Brightstar Creative

North East

Sheffield - West

S2 4QZ

Rare Creative

North East

Sheffield North

S3 8GG

Marckell Business Solutions Ltd

North East

South Shields

NE33 1TL

Stuart Lockerbie T/A Maskerade.

North East

Sunderland

SR2 7PR

G3 Advertising

North East

Thirsk

Y07 1HL

Goweb Print Ltd

North East

Wakefield

WF2 9BL

Colour Box Design Company Ltd

North East

York 

YO24 1AR

Thw Brackenhill Group

North East

York East

YO41 4DF

ER Design & Print Service Ltd

North West

Alsager

CW2 7AX

Ardwick - One21 Designs

North West

Ardwick

M12 6JH

Rhino Design

North West

Ashton-under-Lyne

OL6 6XJ

Gud Design Ltd

North West

Birkenhead - Ea

CH41 1EU

Fluid Creative

North West

Blackburn

BB2 1AR

Granthams

North West

Blackpool

FY1 4PE

Print Hub Design

North West

Bolton

BL1 3QN

Digeridoo

North West

Bolton

BL7 9NY

Moorish Idol

North West

Bolton - South

BL3 5AB

Wild Thang

North West

Bootle

L20 8LQ

Printing Matrix 

North West

BramptonCarlisle

CA8 1SW

Swantoon

North West

Burnley

BB10 2TP

Fluidmedia.net Ltd

North West

Bury

BL9 0LL

Brightspark Design & Print

North West

Carlisle

CA2 7AJ

RAS Limited

North West

Chester

CH3 5AG

McVery's

North West

Chorley

PR7 2AA

William Seabrook Associates Ltd

North West

Chorlton - Manchester

M21 8UP

Kingfisher Print

North West

Clayton-le-Moors

BB5 5JQ

Northstar Creative Design & Advertising LLP

North West

Colne

BB8 9BD

Mail Boxes Etc

North West

Didsbury

M20 6UG

ScissorsPaperStone

North West

Eccles

M30 8GH

Creativo 

North West

Ellesmere Port

CH65 4FW

First Impression Limited

North West

Glossop

SK13 8ER

Lancaster Store

North West

Lancaster

LA1 1XN

DCT Marketing

North West

Lancaster - Cleveleys

FY5 2DB

Liverpool Store

North West

Liverpool

NE1 4AE

Plinkfizz Limited

North West

Longton

ST3 4HY

Colourful Thinking

North West

Lytham St Annes, Lancashire

FY8 1TB

Infinity Creative

North West

Macclesfield

SK11 6HN

North Manchester Store

North West

Manchester

M4 5AG

Manchester Store

North West

Manchester

LE1 1LB

Alert 2 Media

North West

Manchester

M1 1DZ

Chilli Cactus Limited

North West

Manchester

SK9 1RA

The Agency Creative limited

North West

Manchester

M17 1DZ

Creation Publicity Ltd

North West

Manchester

M17 1DZ

Print Design Warehouse Ltd

North West

Marple

SK8 1DW

Red Fred Limited

North West

Nantwich 

CW5 6PQ

SmartStudios 

North West

North Manchester

M4 4DE

The Creative Hub (UK) Ltd

North West

Ormskirk - Live

L39 3AJ

Granthams

North West

Preston

PR1 2UQ

Daleprint

North West

Rochdale

OL16 2AW

Chris Thew Design & Print Limited

North West

Rossendale

BB4 8EQ

Hashem Media

North West

Sale

M33 6RH

Impressions Design & Print Ltd

North West

Sandbach - Ches

CW11 1DA

I Design

North West

Southport

PR9 0NS

Masterprint (NW) Ltd

North West

St Helens

WA10 1DH

Davora Limited

North West

Stockport North

SK4 4HY

Impact Digital

North West

Timperley

WA14 1PJ

The Hub

North West

Trafford Park

M17 1FG

AF Reprographic

North West

Tyldesley

M29 8DS

Warrington Store

North West

Warrington

WA1 1EN

Printel UK Ltd

North West

Widnes

WA8 9LG

Mooney Media Ltd

Northern Ireland

County Down

BT32 3QD

Go Fish Design & Print

Northern Ireland

Lisburn

BT28 1AG

Xpress Printing

Northern Ireland

Newtonabbey

BT36 4PU

Native Print

Noth East

Newcastle - Heaton

NE6 5HL

The Business Boutique UK Ltd

Scotland

Aberdeen

AB24 5BW

Evosom Limited

Scotland

Aberdeen

AB24 5AX

Steptoe Creative Limited

Scotland

Ayr - Scotland

EE1 1EE

Dundee Store

Scotland

Dundee

M3 4EN

Edinburgh Store

Scotland

Edinburgh

S1 4GF

Elevate You Limited

Scotland

Edinburgh

EH11 4EP

Digisnaps Ltd

Scotland

Edinburgh

EH2 2PJ

Glasgow Store

Scotland

Glasgow

NW3 5HS

SPD Print Solutions Ltd

Scotland

Glasgow

G40 4DU

Revolve Design & Print 

Scotland

Glasgow - City

G4 0QR

J&J Cornfield Partnership

Scotland

Hamilton

ML3 6DS

Velocity Design

Scotland

Inverness

IV4 7EG

Republique Limited

Scotland

Linlithgow

BN3 3LL

Delta Design Ltd

Scotland

Livingstone

EH54 8PT

Colorgrafix

Scotland

Louth

LN11 9AA

DPI Print

Scotland

New House- Glasgow

ML1 5RX

Glasgow Print

Scotland

North Glasgow

G20 9AY

Creative Concept UK Ltd

Scotland

Paisley

PA1 1TX

South Glasgow Store

Scotland

South Glasgow

G5 9RR

Tangerine Industries Ltd

Scotland

Stirling

FK8 1JW

Idesign2

Scotland

Falkirk

FK3 8XS

Brighton Store

South

Brighton

BN1 4JB

Talon Graphics

South

Brighton

CR7 8DD

Tudor Printers Limited

South

Worthing

BN11 1UY

Ashford Store

South East

Ashford

TN24 8UU

Copyzone

South East

Bishop Stortford

CM23 3DY

Cambridge Store

South East

Cambridge

CB3 0AX

Think IMG Ltd

South East

Canterbury

CT1 2NR

Studio Direct (Printing) Ltd

South East

Chelmsford

CM2 6JP

Inprint

South East

Colchester

CO1 1PB

TRS Graphics Ltd

South East

Croydon

CR0 1QR

Jellybean Graphics

South East

Croydon

CR9 6YJ

Ouch Creative

South East

Dereham

NR19 2AW

Print Link

South East

Diss

IP22 4LB

Dorking Print Solutions Ltd

South East

Dorking

RH4 2ES

Patient Excel

South East

Dunstable

LU7 1EN

Accomplice Limited

South East

Hailsham

BN27 1AU

JBS Print & Design

South East

Leatherhead

KT22 0AN

Luton Store

South East

Luton

LU1 2PL

Grayscale Design

South East

Maidenhead East 

SL6 1HZ

Colourwave Printers

South East

Maidstone

ME16 0JZ

Norwich Store

South East

Norwich

NR1 1PL

Colourwave

South East

Ramsgate

CT11 8NT

Felix Ltd

South East

Rochester

ME2 4HZ

Bourne Graphics

South East

SaltdeanSussex

BN2 8PA

World Wide Service 

South East

Sandy, Bedfordshire

SG19 1AG

Colour Creatives Limited

South East

Sidcup - Kent

DA14 6ES

Head Consulting

South East

Somerton

BA16 0HA

Grow Marketing Limited

South East

Whitstable

CT3 4JH

Woking Print & Design

South East

Woking

GU21 7RS

Bournemouth Store

South West

Bournemouth

BH11 8PN

Proactive

South West

Bournmouth North

BH8 8EZ

Bristol Store

South West

Bristol

EH3 9LY

Imageglossy Ltd

South West

Christchurch

BH23 1QD

Exeter Store

South West

Exeter

EX4 3AJ

SDM Productions UK 

South West

Fareham, Hampshire

PO17 5PG

Paw Print Design

South West

Gosport

PO15 7HH

Bluebird Graphics

South West

Lyme Regis

DT7 3LS

Wessex Direct Ltd

South West

Minehead

TA24 5BJ

Full Colour Store

South West

Newton Abbott

SW6 6SE

Plymouth Store

South West

Plymouth

PL4 0AU

Elixus

South West

Portsmouth South

PO2 8FA

Neil Cheesewright T/A Chalk and Cheese Design

South West

Ruislip

HA4 6HH

Southampton Store

South West

Southampton

SO15 2AE

Wessex Direct Ltd

South West

Taunton

TA2 6BB

Wessex MAlthouse Direct Ltd

South West

Torquay

TQ1 3AW

DV8media

South West

Totnes 

PL1 3JB

Whitman Design & Print Limited

South West

Truro

TR1 2HE

Anneset Productions

South West

Weston-Super-Mare

BS23 3DE

Starre Design

South West

Seaton, Exeter

EX12 2LS

Blue Poppy

South West

Ham Green, Bristol

BS20 0DD

Fields Copy Shop

South West

Dover

CT16 1PW 

Seemon Limited

South West

Bath

BA1 2FJ 

Cardiff Store

Wales

Cardiff

CF5 1JF

Australian Welsh

Wales

Cardiff

CF14 3JP

Macs Creative

Wales

Colwyn Bay

LL29 7PA

West Wales Design 

Wales

Pembroke

SA71 4JS

Colourbox 

Wales

Swansea

SA1 5TY

Parkmill Design

Wales

Swansea - Gower

SA3 2EH

  



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