LONDON (Alliance News) - Grafenia PLC Monday reported growth in profit in its recently-ended financial year, despite revenue falling, and said that while it expects sales to keep declining, it believes there is potential for its two new business lines Marqetspace and Nettl to improve performance.
The printing services company reported a pretax profit for the year ending March 31 of GBP0.86 million, up 13.2% from the GBP0.76 million it made the prior year, despite revenue falling 13% to GBP17.0 million from GBP19.4 million.
Grafenia said that revenue in its W3P business was lower than expected as it was hit by a protracted marketing cycle. It said that while Printing.com still generates significant sales, many of its bolt-on partners generated less print revenue as they steer towards web design and digital media.
Grafenia will pay a dividend of 1.50 pence for the year, a 13% increase on the 1.33p paid the year before.
Grafenia added that trading in April and May was softer than anticipated, but that June appears more encouraging.
It expects its Marqetspace business, which it launched during the first quarter of the last year, to achieve an annualised monthly run rate exceeding GBP3 million in the current year, with the scope to develop into a GBP10 million channel over the next three years. It also aims to secure a further 50 partners for its Nettl business, hoping to grow the network to over 200 partners over the next two to three years.
"During the current year, as the nature of our Printing.com franchise partners' businesses change, and with our Dutch markets likely to be increasingly competitive it is probable that we will continue to see revenue contract. However, with the advent of Marqetspace and Nettl, we consider that we have moved beyond the foundations simply being in place. Each of these channels will, we believe, grow to a material size during the current year and form the mainstay of the group's revenues over a two to three year timescale," Chairman Les Wheatley said in a statement.
Marqetspace sells printing services online to professional buyers, such as graphic designers and small printers. To date it has attracted over 1,000 buyers.
Nettl is a cross-media bolt-on formula. It is bolted onto established graphic design or print businesses enabling the simplified delivery of websites and ecommerce shops. It was launched in September and there are now 25 Nettls comprising 20 former Printing.com partners who have adopted the new format, together with the conversion of five Printing.com outlets.
"Given the change in our markets, and the focus on establishing Marqetspace and Nettl, it is anticipated that earnings for the current year will be weighted towards the second half as expected. However, by the close of the year we believe the potential of these two channels will have been validated," he added.
Shares in Grafenia were trading down 13% at 18.20 pence Monday morning.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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