The profit slide at design and printing specialist, Printing.com, shouldn't worry investors too much. After all, that fall was substantially less than the 19 per cent slide at the half-year stage and largely reflected increased depreciation and amortisation charge. Cash profit actually rose 19.9 per cent in the year to £3.43m and, even though the dividend was cut back, the payout still beat analysts' expectations and the yield remains impressive - leaving the shares attractive.
Still, Printing.com does face challenges. Sales of straightforward UK and European printing services, mainly through franchisees, were static in the year at £13.3m as competition from small rivals increased. That explains why management has spent the past 18 months introducing artwork products online. That growing online focus is paying-off, though, and online sales rose sharply, from £2.64m last year to £7.4m, helped by a full-year contribution from Dutch-based MFG - which was acquired in November 2010. What's more, two new on-line services contributed small but significantly higher revenues - as did franchised businesses in both France and Ireland.
Broker N+1Brewin expects pre-tax profit to rebound by more than 40 per cent in 2013 to £1.8m, giving EPS of 3p.
PRINTING.COM (PDC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 25.5p | MARKET VALUE: | £12.1m | |
| TOUCH: | 24-27p | 12-MONTH HIGH: | 42p | LOW: 22p |
| DIVIDEND YIELD: | 10% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 13p* | NET CASH: | £1.77m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 13.5 | 2.42 | 3.64 | 3.00 |
| 2009 | 14.5 | 2.06 | 3.28 | 3.15† |
| 2010 | 14.5 | 1.70 | 2.87 | 3.15 |
| 2011 | 17.0 | 1.31 | 2.04 | 3.15 |
| 2012 | 21.8 | 1.26 | 2.33 | 2.55 |
| % change | +28 | -4 | +14 | -19 |
Ex-div:13 June Payment:27 July Aim: support services *Includes intangibles of £4.62m, or 10p a share. †Excludes a special 2p payment | ||||
