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Printing.com pushes internet sales

RESULTS: Printing.com is in a transitional phase, but still offers investors a decent dividend
June 12, 2013

Printing.com (PDC) is in a transitional phase and, unfortunately, it shows. The Aim-traded company is best known for supplying printed items to shop franchisees in the UK from a fast turnaround printing hub in Manchester.

IC TIP: Buy at 20p

But thanks to a combination of recession and a move online, income from traditional printing services is in decline. In the last financial year, those sales fell 17 per cent from £13.3m to £11m as print volumes contracted. The growing online Software as a Service (SaaS) division increased turnover by a similar percentage, but to a lower figure of £8.76m. There was also a significant drop in licence income.

Rightly or wrongly, Printing.com is developing its internet services in-house. There are, for example, now over 11,000 templates sold in seven languages and US imperial sizes. Its holy grail is to sell these services to rival printers in other countries where previous efforts at setting up master agencies failed. One example is Australia. The latest edition of ProPrint suggests that sizeable local print provider, Whirlwind Print, is establishing a web-to-print partnership with Printing.com.

However, until there are more such deals, Printing.com's results are not going to excite. So broker N+1 Singer has downgraded 2013-14 profit expectations from £1.4m to £1.1m, on revenues of £21.5m, and forecasts a cut in the dividend to 1.7p.

PRINTING.COM (PDC)

ORD PRICE:20pMARKET VALUE:£9.5m
TOUCH:19-20.5p12-MONTH HIGH:32.5pLOW: 19p
DIVIDEND YIELD:12.8%PE RATIO:12
NET ASSET VALUE:12p*NET CASH:£1.4m

Year to 31 MarTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
200914.52.063.283.15†
201014.51.702.873.15
201117.01.312.043.15
201221.81.262.332.55
201320.70.891.692.55
% change-5-29-27-

Ex-div: 3 Jul

Payment: 2 Aug

*Including intangible assets of £4.68m, or 10p a share

†Excludes a special payment of 2p.