TIDMPDC
RNS Number : 8340Q
Printing.com plc
12 November 2012
12 NOVEMBER 2012
Printing.com plc
("Printing.com" or "the Company")
Unaudited Interim Results for the period ended 30 September
2012
Six months Six months
Financial Highlights to to
30 September 30 September
2012 2011 Change
Turnover GBP10.43m GBP10.73m -2.8%
EBITDA before exceptional
costs* GBP1.35m GBP1.50m -10.0%
EBITDA GBP1.19m GBP1.50m -20.7%
Profit before tax and exceptional
costs* GBP0.51m GBP0.51m -
Exceptional costs* GBP0.16m -
Profit before tax GBP0.35m GBP0.50m -30.0%
EPS - Basic 0.53p 0.81p -34.6%
EPS - Fully Diluted 0.53p 0.80p -33.8%
Dividend 1.05p 1.05p
Capital Expenditure GBP0.57m GBP0.65m
Net Cash GBP1.14m GBP0.96m
Net Funds** GBP1.10m GBP0.65m
*Exceptional costs of GBP0.16m represented a severance
payments.
**Net funds is the net of cash and cash equivalents less other
interest bearing loans and borrowings
Operational highlights
-- Profit before tax and exceptional costs maintained
-- Encouraging growth - Drukland.be, Flyerzone UK and BrandDemand UK
-- New initiatives moving from development to deployment
-- Agreement with Silicon Publishing Inc.
-- Internationalisation of TemplateCloud.com
-- W3P - white label 'reseller' formula on cusp of launch
-- Interim dividend maintained
For further information:
Printing.com plc
Tony Rafferty (Chief Executive) 07966 517 336
Alan Roberts (Finance Director) 0161 848 5713
N+1 Singer (Nominated Adviser)
Richard Lindley 0113 241 0126
Sandy Fraser 0131 529 0272
Printing.com plc
("Printing.com" or "the Company")
Unaudited Interim Results for the period ended 30 September
2012
Chairman's & Chief Executive's Statement
Trading Results, Cash and Dividend
Group turnover marginally decreased to GBP10.43m (2011:
GBP10.73m) a fall of 2.8%.
EBITDA before exceptional costs was GBP1.35m down from GBP1.50m
a decrease of 10.0%. Pre Tax Profit before exceptional costs was
maintained at GBP0.51m. Exceptional costs incurred during the
interim period related to a severance payment made to Hans
Scheffer, the MD of the Group's Dutch subsidiary Media Facility
Group BV, of GBP0.16m reducing Pre Tax Profit to GBP0.35m (2011:
GBP0.50m).
At 30 September 2012, the Company had cash-in-hand of GBP1.14m
(2011: GBP0.96m). Cash generated by operating activities was
GBP0.60m (2011: GBP0.95m). A Final Dividend of GBP0.71m was paid in
the period (2011: GBP0.99m). During the period working capital
increased by GBP0.38m (2011: GBP0.51m) and capital expenditure was
GBP0.57m (2011: GBP0.65m), the majority reflecting the ongoing
investment in the Company's software that underpins the new
developments. Net funds at the close of the period were GBP1.10m
(2011: GBP0.65m).
Capital Reduction
Having gained Shareholder support the Company received Court
approval to the capital reorganisation on 8 August increasing
distributable reserves in the Company by GBP4.08m through the
cancellation of the share premium account.
Dividend
The Directors are declaring an Interim Dividend of 1.05p per
share (2011: 1.05p) to be paid on 14 December 2012 to shareholders
on the register at 23 November 2012. The decision to declare an
uncovered dividend reflects, in the short term, the underlying cash
generation and prospects for the Company moving forward.
Trading Overview
Turnover contracted slightly to GBP10.43m (2011: GBP10.73m).
This reflected similar underlying sales volumes across the Group
but less favourable foreign exchange rates on revenue from the
Group's eurozone Channels. Earnings were lower than anticipated due
to lower sales across the UK and Irish Franchise Networks. In
addition, the launch of some of the new initiatives centred on the
adding of Templates to Group Channels took longer than
envisaged.
It continued to be a frenetic period in the evolution of the
Company's core systems however we are now at the point where the
emphasis is moving from software development to deployment and
monetisation.
UK Trading
Lower sales across the Franchise Network reflected the continued
shift of micro businesses to ordering online. To counteract this,
the new Printing.com formula went live just prior to the close of
the Interim Period. This augments the Franchise offering with an
online solution featuring the Company's Template technology. It
allows micro businesses to order directly from the Printing.com
website but also dovetails with the Franchise formula. Post launch,
this initiative has had a positive impact on revenues for the
Franchise Network and reversed some of the previous decline. We
believe that this will gain momentum during the second half of the
year.
BrandDemand UK continues to build momentum, achieving sales of
GBP0.29m (2011: GBP0.09m). Similarly during the Interim Period,
Flyerzone.co.uk made progress generating GBP0.27m (2011:
GBP0.1m).
Netherlands Trading
Revenue from the Dutch online Channels (Flyerzone.nl,
Drukland.nl) recorded a slight decline to GBP2.88m (2011:
GBP3.13m). However, the underlying euro sales showed slight
progression.
Post the close of the Interim Period, TemplateCloud was added to
Drukland.nl allowing clients without a 'printable PDF' to order
online. Whilst at an early stage, this initiative is generating
incremental orders on a daily basis.
Belgium Trading
Notwithstanding currency fluctuations, Drukland.be exhibited
strong growth with revenues of GBP0.58m (2011: GBP0.30m). Again,
post the close of the Interim Period, Template functionality has
been added to the Channel offering.
France Trading
Across Printing.com's French Franchise Network, Flyerzone.fr and
BrandDemand, revenues increased to GBP0.27m (2011: GBP0.24m). As
previously reported, we expect to add Templates to Flyerzone.fr and
Printing.com in France during the Company's third quarter.
Ireland Trading
Trading in Ireland disappointed with revenue of GBP0.16m (2011:
GBP0.20m). Templates will be added during the Company's third
quarter.
Agreement with Silicon Publishing Inc (SPI)
Printing.com has entered into an agreement with Silicon
Publishing Inc, the makers of the editing 'kernel' within the
Company's Template system.
This agreement supersedes a previous contract that restricted
the use of the editing 'kernel' to the Printing.com Franchise. The
new agreement grants significantly broader rights to Printing.com
to use the editing 'kernel' on a worldwide basis as part of its
various proprietary software solutions.
The Directors believe that this agreement coupled with the
Group's proprietary software and systems marks a step change in the
opportunity to generate revenue in terms of licensing
TemplateCloud.com and W3P.
UK Launch of W3P
The Bolt-on Franchise format was essentially a branded
'reseller' program coupled with the Company's Flyerlink software
and other systems. In 2011 we paused the marketing of the Bolt-on
format. The reality was for many prospective Bolt-on partners;
print is a component of what they do along with graphic and website
design. This divergence makes the Franchise Network less uniform
and the Bolt-on format itself more challenging to promote.
Following the necessary software development W3P is on the cusp
of being launched. It is essentially an alternative 'white label'
reseller format which involves the licensing of the Company's
systems and software but does not use the Printing.com brand,
exclusive areas and the other elements of the Franchise
formula.
The revenue streams for the W3P formula are centred on
initial/monthly fees and small 'click charges' for the use of
certain software functionality. W3P partners can buy print at
transfer price in a similar manner to a Bolt-on Franchise.
With the launch of W3P the Company will benefit from a new
impetus in the reseller market. This, we believe, will make a
positive impact on earnings during the last quarter of the current
financial year.
TemplateCloud.com
TemplateCloud.com is the Company's 'crowdsourced' graphic design
initiative. Freelance graphic designers submit designs for flyers,
leaflets and business cards, which are then converted by the
Company's software into an editable online format.
During the previous 'Interim Report', when the TemplateCloud.com
formula was introduced we reported that TemplateCloud was not a
revenue stream in its own right. However, we have now identified
what we believe is a significant opportunity to market
TemplateCloud as a standalone revenue stream.
The Company will now grant licences to other online printers
allowing them to 'bolt-on' the TemplateCloud.com functionality. A
fee of circa GBP5-GBP20 is charged every time a Template is
utilised.
Following the test marketing at trade shows in both Europe and
the US, the first such licence has been granted and is on the cusp
of going live. We are in advanced discussions with many other
potential partners on both continents.
TemplateCloud.com is presently available with English, French
and Dutch content. Swedish, German, Spanish, Italian and Portuguese
content will be available early 2013. TemplateCloud.com is also
being adapted for use in the US and Canada, taking into account
imperial sizes, spelling and general parlance. It is our objective
to grant in excess of 100 such licences worldwide.
Other International
The internationalisation of TemplateCloud.com prepares the way
to augment the Company's Master Licence Agreements in New Zealand
and the US. It also opens up certain other international licencing
opportunities.
Current trading
Post the close of the Interim Period, trading has continued in a
similar manner, essentially stronger across the online Channels and
more challenging across the Franchise Network. Post the
augmentation of the Printing.com Franchise Channel an upturn in
revenues has been recorded.
Outlook
When we set out two years ago to adapt Printing.com into a
hybrid online/offline model and establish the various new
initiatives discussed in this report our objective was to do so
whilst maintaining profitable trading, underlying cash generation,
maintaining the fullest dividend possible and eliminating debt
within the Group. As the Company's focus moves from development to
deployment we believe we have achieved the essence of these
objectives.
Templates have been added, or are on the cusp of being added, to
all the Company's Channels and in TemplateCloud.com we now have a
niche scaleable solution that has been readied for use in multiple
languages and territories. With an encouraging sales pipeline, we
now believe this will lead to many new partners.
In W3P we have an alternative 'reseller' format, which we
believe is more in keeping with today's market than the Franchise
format. Again we believe that this formula is scaleable and that a
material number of W3P licenses will be granted.
In the short term we may still encounter earnings head winds as
we commit more funds to market and refine these various new
initiatives. Accordingly it is appropriate that we remain cautious
in the short term but believe we have taken the right steps that
will lead to progressive earnings growth.
Les Wheatley Tony Rafferty
Chairman Chief Executive
12 November 2012 12 November 2012
Printing.com plc
("Printing.com" or "the Company")
Unaudited Interim Results for the period ended 30 September
2012
Consolidated Statement of Comprehensive Income
for the six months ended 30 September 2012
Note Unaudited Unaudited
Six months Six months Year ended
to 30 September to 30 September 31 March
2012 2011 2012
GBP000 GBP000 GBP000
Revenue 3 10,425 10,728 21,768
Raw materials and consumables
used (4,865) (4,985) (10,134)
Gross profit 5,560 5,743 11,634
Staff costs (2,504) (2,493) (4,473)
Other operating charges (1,706) (1,754) (3,727)
Depreciation and amortisation (844) (990) (2,134)
Operating profit before
exceptional costs 506 506 1,300
Exceptional costs (156) - -
Operating profit 350 506 1,300
Financial income 6 11 14
Financial expenses (11) (17) (56)
Net financing(expense)/income (5) (6) (42)
Profit before tax 345 500 1,258
Taxation 4 (92) (118) (158)
Profit for the period 253 382 1,100
Other comprehensive income - - -
for the period
Total comprehensive income
for the period 253 382 1,100
Basic earnings per share 5 0.53p 0.81p 2.33p
Diluted earnings per share 5 0.53p 0.80p 2.32p
Consolidated Statement of Financial Position
at 30 September 2012
Unaudited Unaudited
30 September 30 September 31 March
2012 2011 2012
GBP000 GBP000 GBP000
Non-current assets
Property, plant and equipment 1,976 2,575 2,173
Intangible assets 4,525 4,659 4,615
Deferred tax assets 2 2 2
Total non-current assets 6,503 7,236 6,790
Current assets
Inventories 136 149 147
Trade and other receivables 2,662 3,077 2,898
Cash and cash equivalents 1,143 956 1,874
Total current assets 3,941 4,182 4,919
Total assets 10,444 11,418 11,709
Current liabilities
Other interest-bearing loans
and borrowings (43) (127) (80)
Trade and other payables (2,414) (2,617) (2,889)
Current tax payable (252) (516) (372)
Accruals and deferred income (1,198) (1,196) (1,274)
Other liabilities (210) (191) (284)
Total current liabilities (4,117) (4,647) (4,899)
Non-current liabilities
Other interest-bearing loans
and borrowings - (181) (23)
Deferred tax liabilities (476) (604) (476)
Total non-current liabilities (476) (785) (499)
Total liabilities (4,593) (5,432) (5,398)
Net assets 5,851 5,986 6,311
Equity
Share capital 475 472 475
Share premium - 3,981 4,079
Merger reserve 838 838 838
Retained earnings 4,538 695 919
Total equity 5,851 5,986 6,311
Consolidated Statement of Changes in Shareholders Equity
for the six months ended 30 September 2012 (unaudited)
Share Share Merger Retained Total
Capital Premium Reserve earnings
GBP000 GBP000 GBP000 GBP000 GBP000
Opening shareholders' funds at
1 April 2011 469 3,881 838 1,311 6,499
Profit for the period - - - 382 382
Dividends paid - - - (992) (992)
Total recognised income and (expense) - - - (610) (610)
Foreign Exchange Differences - - - (6) (6)
Own shares acquired - - - - -
Shares issued 3 100 - - 103
Total movement in shareholders'
funds 3 100 - (616) (513)
Closing shareholders' funds at
30 September 2011 472 3,981 838 695 5,986
Opening shareholders' funds at
1 October 2011 472 3,981 838 695 5,986
Profit for the period - - - 718 718
Dividends paid - - - (500) (500)
Total recognised income and (expense) - - - 218 218
Foreign Exchange Differences - - - 6 6
Shares issued 3 98 - - 101
Total movement in equity 3 98 - 224 325
Closing shareholders' funds at
31 March 2012 475 4,079 838 919 6,311
Opening shareholders' funds at
1 April 2012 475 4,079 838 919 6,311
Profit for the period - - - 253 253
Dividends paid - - - (713) (713)
Total recognised income and (expense) - - - (460) (460)
Foreign Exchange Differences - - - - -
Capital restructuring - (4,079) - 4,079 -
Shares issued - - - - -
Total movement in shareholders'
funds - (4,079) - 3,619 (460)
Closing shareholders' funds at
30 September 2012 475 - 838 4,538 5,851
Consolidated Statement of Cash Flows
for the six months ended 30 September 2012
Unaudited Unaudited
Six months Six months Year ended
to 30 September to 30 September 31 March
2012 2011 2012
GBP000 GBP000 GBP000
Cash flows from operating activities
Profit for the period 253 382 1,100
Adjustments for:
Depreciation, amortisation and
impairment 844 990 2,134
Net finance expense/(income) 5 6 (10)
Exchange gain - - 32
Taxation 92 118 158
Operating cash flow before changes
in working capital and provisions 1,194 1,496 3,434
Change in trade and other receivables 236 413 609
Change in inventories 11 41 43
Change in trade and other payables (623) (960) (544)
Cash generated from the operations 818 990 3,542
Interest paid (3) (17) (24)
Tax paid (213) (24) (337)
Net cash inflow from operating
activities 602 949 3,181
Cash flows from investing activities
Interest received 9 11 14
Proceeds from sale of plant and
equipment - - 4
Acquisition of plant and equipment (59) (112) (183)
Capitalised development expenditure (156) (90) (322)
Acquisition of other intangible
assets (359) (450) (872)
Net cash used in investing activities (565) (641) (1,359)
Cash flows from financing activities
Proceeds from the issue of share
capital - 103 204
Payment of finance lease liabilities - (200) (200)
Repayment of Bank Loans (60) (61) (127)
Repayment of Loan Notes - (215) (355)
Payment of equity dividend (713) (992) (1,492)
Net cash outflow from financing
activities (773) (1,365) (1,970)
Net decrease in cash and cash
equivalents (736) (1,057) (148)
Exchange differences on cash and
cash equivalents 5 11 20
Cash and cash equivalents at start
of period 1,874 2,002 2,002
Cash and cash equivalents at end
of period 1,143 956 1,874
Notes
(forming part of the interim financial statements)
1 Basis of preparation
Printing.com plc (the "Company") is a company incorporated and
domiciled in the UK.
These financial statements do not include all information
required for full annual financial statements, and should be read
in conjunction with the financial statements of the Group as at and
for the year ended 31 March 2012.
The comparative figures for the year ended 31 March 2012 are not
the Company's statutory accounts for that financial year. Those
accounts have been reported on by the Company's auditors and
delivererd to the Registrar of Companies. The report of the
auditors was (i) unqualified, (ii) did not include a reference to
any matters to which the auditors drew attention by way of emphasis
without qualifying their report, and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act
2006.
These condensed consolidated interim financial statements were
approved by the Board of Directors on 6 November 2012.
2 Significant accounting policies
The accounting policies applied by the Group in these condensed
consolidated interim financial statements are the same as those
applied by the Group in its consolidated financial statements as at
and for the year ended 31 March 2012.
3 Segmental information
The Group's primary operating segments are geographic being UK
& Ireland, Europe and others. The secondary segmental analysis
is by nature of service.
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.
Analysis by location of sales
Period ended 30 September UK & Ireland Europe Other Total
2012
GBP000 GBP000 GBP000 GBP000
Segment revenues 6,601 3,718 106 10,425
Operating Expenses 9,919
Results from operating activities 506
Exceptional costs (156)
Net finance income (5)
Profit before tax 345
Tax (92)
Profit for the period 253
Assets
Unallocated net assets 5,851
Notes (continued)
3 Segmental information (continued)
Analysis by location of sales
Period ended 30 September UK & Ireland Europe Other Total
2011
GBP000 GBP000 GBP000 GBP000
Segment revenues 6,960 3,670 98 10,728
Operating Expenses 10,222
Results from operating activities 506
Net finance income (6)
Profit before tax 500
Tax (118)
Profit for the period 382
Assets
Unallocated net assets 5,986
Analysis by type
Period ended 30 September Printing Printing Licence Total
2012 services services Income
- online
sales
GBP000 GBP000 GBP000 GBP000
Segment revenues 3,791 6,179 455 10,425
Operating Expenses 9,919
Results from operating activities 506
Excptional costs (156)
Net finance expense (5)
Profit before tax 345
Tax (92)
Profit for the period 253
Assets
Unallocated net assets 5,851
Analysis by type (continued)
Period ended 30 September Printing Printing Licence Total
2011 services services Income
- online
sales
GBP000 GBP000 GBP000 GBP000
Segment revenues 3,447 6,741 540 10,728
Operating Expenses 10,222
Results from operating activities 506
Net finance income (6)
Profit before tax 500
Tax (118)
Profit for the period 382
Assets
Unallocated net assets 5,986
4 Taxation
The tax charge is based on the base tax rate of 24% (six month
period ended 30 September 2011: 26%).
5 Earnings per share
The calculation of the basic earnings per share is based on the
profit after taxation divided by the weighted average number of
shares in issue, being 47,557,835 (period ended 30 September 2011
47,249,881; year ended 31 March 2012: 47,302,191).
The diluted earnings per share takes the weighted average number
of ordinary shares in issue during the period and adjusts this for
dilutive impact of share options existing at the period end. The
diluted weighted average number of shares in the period ended 30
September 2012 was 47,774,288 (period ended 30 September 2011:
47,774,288; year ended 31 March 2012 47,506,092). The profit used
in the diluted earnings per share is based on profit after
taxation.
Independent Review Report to Printing.com plc
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly report for the six
months ended 30 September 2012 which comprises Consolidated
Statement of Financial Position, Consolidated Statement of
Comprehensive Income, Consolidated Statement of Changes in
Shareholders' equity, the Consolidated Statement of Cash Flows and
the related explanatory notes. We have read the other information
contained in the half-yearly report and considered whether it
contains any apparent misstatements or material inconsistencies
with the information in the condensed set of financial
statements.
This report is made solely to the company in accordance with the
terms of our engagement. Our review has been undertaken so that we
might state to the company those matters we are required to state
to it in this report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company for our review work, for this
report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly report is the responsibility of, and has been
approved by, the directors. The directors are responsible for
preparing the half-yearly report in accordance with the AIM
Rules.
The annual financial statements of the Group are prepared in
accordance with IFRSs as adopted by the EU. The condensed set of
financial statements included in this half-yearly report has been
prepared in accordance with the recognition and measurement
requirements of IFRSs as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly report
based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly report for the six months ended 30 September
2012 is not prepared, in all material respects, in accordance with
the recognition and measurement requirements of IFRSs as adopted by
the EU and the AIM Rules.
Mick Davies
for and on behalf of KPMG Audit Plc
Chartered Accountants
St James' Square
Manchester, M2 6DS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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