Thanks to a £3.1m contribution from recent Dutch acquisition MFG, Printing.com reported a healthy rise in 2010-11 sales. Before non-recurring costs, profits were only down 13 per cent at £620,000 and that’s after taking into account a £303,000 rise to £990,000 in depreciation and amortisation charges.
As a fast print supplier to mainly small- and medium-sized businesses, Printing.com is a good bellwether of economic activity. And in the UK the situation is not so good. Trading was “stable” up until mid-June 2011 but then volume sales began to contract, with "further erosion" from August. So with the UK close to an economic double-dip, prospects for sales, which are mainly via franchisees, do not seem promising. So management is focusing its energies on several new developments, including a big push in online sales following the acquisition of MFG. The extra add-on is the development of editable templates to personalise graphic designs. At the end of March there were none, now there are 4,000 and growing.
“Soft” trading is not good news for current-year results. On forecast sales of £21.5m, broker Brewin Dolphin has cut profit expectations by £400,000 to £1.2m with earnings down from 2.4p to 1.8p – (2010 – 2.0p). The broker also expects a reduction in the full-year dividend from 3.2p to 2.1p.
PRINTING.COM (PDC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 32p | MARKET VALUE: | £15.1m | |
| TOUCH: | 31-33p | 12-MONTH HIGH: | 40.5p | LOW: 30.25p |
| DIVIDEND YIELD: | 9.8% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 13p* | NET CASH: | £648,000 | |
| Half-year to 30 Sept | Turnover (£m) | Pre-tax profit (£000) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 7.10 | 619 | 1.01 | 1.05 |
| 2011 | 10.73 | 500 | 0.81 | 1.05 |
| % change | +51 | - | - | - |
Ex-div: 16 November Payment: 9 December *Including intangible assets of £4.66m, or 10p a share | ||||
