(Alliance News) - Printer and signage maker Grafenia PLC said Wednesday annual losses worsened amid a jump in costs, as the firm continues to focus on building scale through acquisition.
For the year ended March, pretax loss deepened to GBP3.2 million from GBP1.2 million the year prior. This was despite revenue rising to GBP16.0 million from GBP14.6 million the year before.
Profit performance was hurt by staff costs jumping to GBP6.1 million from GBP4.6 million the year prior, as well as other operating costs rising to GBP3.5 million from GBP3.0 million.
"Importantly, these results include several cost items that are either one-time in nature, or constitute up-front costs, rather than ongoing operating costs," Grafenia Chair Jan-Hendrik Mohr said. "An example of a one-time cost is the improvement program in our finance function. As we have discussed on previous occasions, we decided to improve our financial capabilities to support our strategy."
Grafenia does not pay a dividend.
"Despite our increase in size, we believe we are still too small to be a plc as we currently stand," Grafenia Chief Executive Officer Peter Gunning said. "As well as building our company stores organically, we have an acquisition strategy. This is centred around rolling up the signs sector. There are lots of reasons why we think this makes sound industrial logic, and these businesses are a natural extension of our product range. And we sell to the same kind of clients."
"So far, we've acquired a couple of smaller sign businesses. With both, we've combined them with a Nettl studio team and relocated them to create new Nettl Business Superstores. That's likely to happen again. Other Nettl partners have expressed an interest in joining Grafenia, as we roll-out future Superstores."
For the new financial year ending March 2020, Grafenia forecasts to be earnings before interest, taxes, depreciation & amortisation breakeven on a monthly basis. Over the medium term, Grafenia is expecting margins of 10% to 15%.
For the year ended March, Grafenia reported an Ebitda loss of GBP1.1 million, down from a GBP771,000 Ebitda profit the year prior.
Shares in Grafenia were untraded at 12.00 pence in London on Wednesday.