GRA.L Regulatory News (GRA)

1 Jun 2006 07:02

Printing.com plc01 June 2006 FOR RELEASE 7.00AM 1 June 2006 PRINTING.COM PLC ("Printing.com","the Company"or "the Group") Specialist retail chain with 172 outlets open and pending across the UK Preliminary Results for year ended 31 March 2006 2006 2005Total Retail Sales £18.22m £14.44m +26.2% Turnover £12.34m £10.72m +15.1%Profit Before Tax £2.41m £1.51m +59.6%Earnings Per Share - Basic 4.12p 2.74p +50.4%EPS - Fully Diluted 3.92p 2.66p +47.4%Dividend 1.75p 0.50p +250.0%Cash Reserves £3.45m £2.86m +20.6% * Record turnover, profit before tax and earnings per share * Strong cash position * Annual dividend of 1.75p * Expansion continues across the UK * First overseas Master Franchise signed * Outlook for the future development of the Group is positive For further information: Printing.com plc Tony Rafferty (Chief Executive) 07966 517 336Alan Roberts (Finance Director) 0161 848 5713 Cubitt Consulting Brian Coleman-Smith / Allison Reid / Nia Thomas 020 7367 5100 Background note: Printing.com Printing.com offers a broad product range including leaflets, booklets,postcards, promotional cards, invitations, letterheads and business cards toconsumers and small and medium sized companies. Unlike its competitors,Printing.com Stores and Franchises do not depend on any printing equipment onlocation. The Company's printing and ancillary equipment is based at thecentralised Production Hub with the head office in Manchester. All work isproduced in full four colour rather than two colour. Delivery to the customer isusually within three days. The printing sector has traditionally been served bysmaller printing companies or other On Demand Printers and is estimated to beworth some £1 billion. Printing.com has three routes to market: Franchise Stores, Bolt-on Franchisesand Company owned Stores. A complete list of Printing.com's Outlets which are currently open is included at the end of the release. High resolution images are available for the media to view and download free of charge from www.vismedia.co.uk PRINTING.COM PLC ("Printing.com","the Company"or "the Group") Specialist retail chain with 172 outlets open and pending across the UK Preliminary Results for year ended 31 March 2006 Chairman's Statement Trading Results I'm pleased to report another excellent year. The development of your Companyhas continued to gain significant momentum, illustrated by an increase acrosskey metrics: pre-tax profit increased by 59% to £2.41m (2005: £1.51m) andearnings per share increased by 50% to 4.12p (2005:2.74p). Turnover increased to £12.34m (2005: £10.72m); however, I believe the bettermeasure of the increased momentum is Total Retail Sales, being the estimatedvalue of invoiced sales through the Printing.com network, which were £18.22m(2005: £14.44m) - an increase of 26.2%. The increase in Total Retail Salesreflects the significant growth in the size of our network, with 166 Outletsopen or pending at the year end (2005: 119). Since the year end the number ofoutlets open or pending has increased by 6 to 172. Cash I am also pleased to report a strong generation of cash, with the result thatyour Company closed the year with cash reserves of £3.45m (2005: £2.86m). Thisis despite payment of dividends and the capital expenditure on the initialstages of the Hub expansion programme. Dividend The Board is proposing a final dividend of 1.25p per ordinary share, making atotal of 1.75p for the year (2005:0.50p), to be paid on 2 August 2006 toshareholders on the register at the close of business on 23 June 2006. Thisreflects our belief in the strength of a franchise structure (in the UK, Irelandand other territories) where ongoing growth can be achieved to further enhanceboth earnings and cash generation. External Recognition During the year your Company won recognition with awards and commendations fromimportant bodies in both the franchise and printing sectors. In June 2005, the Company won the Award for Enterprise from the BritishFranchise Association and was subsequently a national awards finalist in both'Print Week', for 'Printing Company of the Year', and 'Printing World', for'Best Training Programme'. In December 2005 Tony Rafferty, the Company's Chief Executive, was elected tothe Board of the British Franchise Association by his peers within the franchisecommunity. Since the year end, Printing.com was also awarded 'UK Printing Company of theYear' by the British Printing Industries Federation - the printing sector'sprincipal trade association. The presentation of this award was made during IPEX(the world's largest English speaking printing exhibition) and meant that theCompany enjoyed significant media coverage. The timing could not have beenbetter in the context of the promotion of our International Master Franchiseinitiative. Collectively these achievements highlight how far your Company has progressed ina relatively short period of time and clearly bode well for those considering aPrinting.com franchise. Employees and Franchisees The success of your Company can be very much attributed to the hard work,endeavours and entrepreneurialism or our employees, franchisees and, indeed, theemployees of our franchisees. Accordingly, on your behalf, I thank them fortheir hard work. Additional Production Capacity It is a little over three years since we moved our production Hub to its presentlocation which, along with the investment in additional printing equipment,resulted in a seeming abundance of excess capacity. At that point I expressed mybelief that this capacity would be quickly utilised, providing the scope forconsiderable growth in earnings which has proven to be the case. Once again we are at a juncture where new capacity is required and are in thefinal stages of upgrading our Manchester Hub, an investment of around £3.4million. I believe that Total Retail Sales will increase to justify thisdecision and provide a sound platform for a further increase in earnings. Outlook Since Printing.com has been a public company, your Board has always been of theview that its model could be exploited in overseas territories and variousstrategies have been considered to this end. By electing to partner withestablished printing companies (who essentially already have a Hub), I believewe will be able to derive additional revenues from licence fees and royalties onyour Company's Intellectual Property of which, Flyerlink(R) the Company'sproprietary software, is the cornerstone. With the first international licence having just been granted for New Zealand(with the option to extend to Australia), I feel I am justified in expressingoptimism that this additional facet of your Company could produce an importantadditional revenue stream in the future. Your Board believes that the current year will again be one of significantprogress. George HardieChairman1 June 2006 Chief Executive's Statement Network Overview The table below sets out the ongoing growth in the numbers of outlets that hasbeen achieved in the year under review and to date. 1 June 31 March 31 March 2006 2006 2005 Company owned Stores 6 6 9Franchised Stores 43 42 33 Open, pending and under optionBolt-on Franchises 123 118 77 Total Outlets 172 166 119 Territory and Boutique Franchise Development During the year, fourteen Territory Franchises became operational in Brighton,Coventry, Guildford, North Manchester, East Birmingham, South West Birmingham,Bradford, Exeter, Cardiff, Norwich, Northampton, Peterborough, Southampton andClapham. Two further Boutique Franchises (identical in format to the Territory FranchiseStore but without the responsibility for developing and supporting a network ofBolt-On Franchises) were opened in South Glasgow and Doncaster. The earlysuccess of this additional format encourages us that similar Boutique operationscan be established across the UK and Ireland. A further three Territory Franchises were established via buyouts. The first viaan MBI of the Bristol Store and the other two, in Edinburgh and South Manchester, via MBOs. The previously franchised Store in Luton converted to Printing.com ownership. Moving forward, it is intended that the Company will maintain an estate of threeor four owned Stores, principally retained for training and developmentpurposes. A further option has been taken out over a London Territory, involving thepayment of a non-refundable deposit of £6,000. Bolt-on Franchise Development The success of the Bolt-on Franchise format continues to build year on year.Franchises of this format are now successfully in operation with establishedGraphic Designers, Web Designers, Marketing Agencies, Printers, Copy Shops andvarious hybrid graphic arts businesses who operate their Printing.com Bolt-OnFranchise in tandem with their existing business. During the year an additional net 41 Bolt-on franchises were added bringing thetotal to 118. I believe the scope exists, across the UK and Ireland, for thisfigure to exceed 300 over the coming years. Collectively, the present 118outlets account for over 50% of the Company's Total Retail Sales. Also this year, the Company launched a number of franchises that it terms'Guerrilla Franchises'. Essentially this format is centred on a similarstructure to a Bolt-On franchise but it is established with a new business.However, the proprietor of such a franchise must hail from the graphic artssector and accordingly such a person would already have most of the requisiteskills. The Guerrilla format provides a flexible way for ambitious professionalsfrom the sector, without the collateral to fund a Territory or Boutiquefranchise, to take their first entrepreneurial steps with Printing.com.Successful candidates include former employees of our competitors, who are thenable to exploit their existing contacts in the local business community.Territory Franchisees have also assisted their own staff to become GuerrillaFranchisees - a move that we welcome as it retains these entrepreneurial peoplewithin the Printing.com network. These businesses are low cost start-upstypically starting from small serviced offices or even a home office on atemporary basis. Like for Like As indicated when reporting our interim results we now believe that enoughmeaningful data exists for us to comment on "like for like" comparison. We feelthat it is most appropriate to report on the like for like progress of ourTerritory Franchisees (or equivalent Company-owned operations) that haveoperated for at least three years. Hence the earliest figures that we haveincluded for a Territory Franchise is its third year versus its second year. Inpresenting these figures we also believe that it is essential to consider notonly the performance of the Store, in isolation, but also the growth in revenuesfrom its associated Bolt-On Franchises. Accordingly on this basis like for likegrowth during the year under review was 17.6% with 14 Territory Franchises (orCompany owned equivalents) contributing to this metric. The Agency At the year end The Agency was split into two businesses and MBOs successfullycarried out for each. These businesses are now operated as Bolt-On Franchises. The Production Hub and Infrastructure Ensuring an undisrupted, high quality supply chain for our Franchisees, andthereby enabling them to satisfy the needs of our clients, is paramount to thesuccess of Printing.com. We have previously indicated that our Production Hub had capacity in the orderof £20-25 million of Total Retail Sales. With the figure for the year underreview approaching the bottom end of this range and the present annualised levelin peak weeks exceeding this range, then clearly the question of additionalcapacity had to be addressed. We considered options for a second Hub in theSouth of England but ultimately felt that this would unnecessarily duplicatecertain costs. During the year, we refined our plan for an increase in capacity of theManchester Hub - essentially comprising the following principle elements:- • a 'double-decker' press that should have a capacity similar to the combined output of our two existing 'single-decker' presses; • an upgrade to certain print finishing equipment not only to provide additional capacity but also to improve efficiencies. An important element of this upgrade has been the design and development of abespoke job sortation system. The Company routinely dispatches over 1200 cartonsper day, with each carton containing three or four individual 'product packs'.To date, these have been sorted and packed in a manual and labour-intensivemanner. With the advent of this system the process should prove far moreautomated, being driven directly by the Company's Flyerlink(R) software. Thistransition will enable our employees to be redeployed to more value-addingactivity. Collectively the Hub upgrade represents an investment of circa £3.4 million.However, we believe that this should facilitate a Total Retail Sales capacity inthe order of £40-45 million with relatively little additional capitalexpenditure. International Expansion In November 2005 we set out our plans for international expansion. Central tothese plans is the granting of a Master Franchise Licence to an establishedprinter in other countries who would in turn be able to exploit the Printing.commodel in their territory. Through its UK and Ireland activities, Printing.com is presently achieving aprofit before tax of 19.5% of turnover. By comparison, the average figure forthe UK's 500 largest printing companies is just 2.79% (Print Week Top 500 UKPrint Companies Survey 2005). It is this profitability chasm that we believewill prove to be the commercial rationale for overseas printers to embracePrinting.com. The granting of a Master Franchise would provide a partner with access to thePrinting.com brand, business know-how, methodology, marketing and trainingcollateral. It would also, and of particular importance, provide a licence touse Flyerlink(R), the Company's proprietary software, which fuses together theentire supply chain from Franchisee to final despatch. It is believed that no'off the shelf' available software can appropriately facilitate the specificnature of the Printing.com model. To provide perspective, Flyerlink(R) has beendeveloped over 14 years and, through a process of continual improvement, webelieve it offers a software solution to overseas printers who wish to develop asimilar business that is not available via established Management InformationSystems. Flyerlink(R), having been completely rewritten between 2003 and 2005,represents a significant barrier to entry for competitors and provides acatalyst for growth for international franchise partners. In return for granting a Master Franchise it is anticipated that Printing.comwill be paid a combination of an initial licence fee, a royalty in the order of3% of the Licensee's Total Retail Sales and 20% of franchise fees generatedlocally. We believe this represents excellent value for a prospective partneras, in the UK, Printing.com spends more than this amount on the creation andmaintenance of the system. We are delighted to report that the first such Master Franchise Agreement hasbeen granted for New Zealand to Astra Group. Astra Print Limited operates ahighly-regarded, commercial print business in Wellington, New Zealand. Over thepast three years they have independently developed a network branded 'PrintStop'. Print Stop, like Printing.com operates via a central 'Hub' albeit itcurrently comprises of fourteen outlets (five franchised). The rationale for theAstra Group adopting the Printing.com Master Franchise is centered on Flyerlink(R) and their belief that the step-change in functionality that Flyerlink(R)brings to both their outlets and hub operations will prove the catalyst forincreasing their rate of expansion. The agreement with Astra Group also includesan option covering Australia, exercisable by 31 March 2007. We are encouraged by how well the Master Franchise proposition has been receivedby prospective partners in other territories. During the April 2006 IPEXexhibition many visitors extended their trip to include a visit to Printing.comand others who were unable to do so have since made separate visits to the Hub.Space has been reserved at October's Graph Expo print exhibition in Chicago,which is the largest print exhibition in all of the Americas, during October2006. This, together with other promotional initiatives, whilst incurringadditional expenditure reflects our belief of the potential of the MasterFranchise project. We are also in purposeful discussions with a number of otherparties and are increasingly optimistic about future development. Current Trading and Outlook Day to day trading during the first two periods of the current financial yearhas proved somewhat mixed across the estate. However, the rate of expansion ofthe network continues to be robust with a strong pipeline of prospectivefranchisees. The granting of the first Master Franchise of New Zealand was in advance of ourexpectations. This licence should generate a positive contribution during thecurrent financial year, albeit at a relatively modest level. Having partneredwith an existing exponent of the 'hub and spoke' model, we believe this shouldbode well for attracting Master Franchisees. We believe this is a significantendorsement of Flyerlink and the Master Franchise proposition. We are presently in negotiation with a number of parties across Europe and areoptimistic that additional Master Franchises will be granted during the courseof the financial year. Tony RaffertyChief Executive1 June 2006 Financial Review Total Retail Sales TRS is a key metric, being the retail price paid by the client irrespective ofwhether the transaction took place through a Company owned or a franchisedOutlet. This measure is important in that it gives the clearest indication ofthe growth in the network. With TRS increasing by 26.2% to £18.22m (2005:£14.44m), the ongoing development of the Printing.com network is clearlyillustrated. At this level we estimate that Printing.com still accounts for lessthan 2% of the available market. Turnover Overall turnover increased by 15.1% from £10.72m to £12.34m. Network growth isessentially derived from our Franchise initiatives: with such transactions ourturnover is limited to the 'wholesale' value of the orders. In addition threeStores, previously under direct ownership, have now been franchised with theretail component of the respective orders given over to the franchisee. CompanyStore sales and sales to Franchisees increased by 23.5% from £9.32m to £11.51mfor the year. Total Company turnover was held back by sales at The Agency whichfell to £0.84m from £1.40m. Gross Profit The Company's simple definition of Gross Profit is sales less direct materials(including the cost of distribution, when made direct to customers). Gross Profit increased by 12.4% from £7.83m to £8.80m. In percentage terms itreduced from 73% to 71.3% of turnover as more sales moved through the franchisechannels, at wholesale prices, where the retail margin is passed over toFranchisees who then incur the corresponding retail overheads. Pre-Tax Profit The Company recorded a pre tax profit of £2.41m (an increase of £0.90m). Thisrepresented 19.5% of Company turnover and 13.2% of TRS. In the previous year thepre tax profit of £1.51m represented 14% of turnover and 10.4% of TRS. Webelieve the significant increase in pre tax profitability, in both absoluteterms and on these key metrics, continues to validate our franchise centredstrategy. The effect of franchising Company Stores meant that staff costs did not increasein the year and fell as a percentage of turnover from 30.3% to 26.3%. Othermajor costs for the year were depreciation £0.79m (2005: £0.73m) and operatinglease costs (plant & property) £0.37m (2005: £0.41m). Those overheads directly related to Company owned retail operations, includingpayroll and depreciation, reduced from £2.26m to £1.78m or 21.1% of turnoverdown to 14.4%. This was essentially due to Stores previously owned by theCompany becoming franchised units. The strong operational cash flow, interest charged to Franchisees with loans andreducing lease finance costs meant net interest income of £7,000 (2005: charge£0.12m). Taxation The standard rate for tax remains 30%, charge for the current year is £0.58m or24% (2005: £0.35m or 23.2%) of PBT through some income not being chargeable totax in this year. Earnings per share (EPS) Basic EPS improved by 50% to 4.12p, the weighted average number of shares usedwas 44,312,566. Fully diluted EPS improved by 47% to 3.92p, the weighted averagenumber of shares used was 46,617,062. The year closed with 44,666,892 ordinaryshares in issue. Cash Flow At the year end the Company had cash balances of £3.45m (2005: £2.86m) and NetFunds of £2.51m (2005:£1.44m). Operational cash inflow increased slightly to £2.47m (2005: £2.43m). Theoperating profit of £2.4m and depreciation & amortisation of £0.79m were offsetby increased debtors of £0.93m and supplemented by an increase in creditors of£0.22m. Capital Expenditure increased to £1.0m and the outflow for Financing,after £58,000 for share capital issues, was £0.47m. Capital Expenditure The total expenditure for the year was £1.0m (2005: £0.5m). This was made up of:- a) software development and computing £0.3m;b) production equipment £0.6m;c) purchase of the Luton Store and certain limited Store refurbishments £0.1m. Share Capital and Share Options Employees' options over 377,176 shares were exercised during the year. In October 2005 Territory Franchisees were granted options with an exerciseprice of 63.5p over 1,260,000 shares subject to their achieving performancetargets and there being a sustained increase in the share price for the optionsto become exercisable. International Financial Reporting Standards (IFRS) As a company listed on the UK Alternative Investment Market (AIM), the Group isnot currently required to comply with IFRS. The Board will assess which IFRSrequirements will become mandatory from 2007 and put appropriate processes inplace to ensure compliance. Alan Q. RobertsFinance Director1 June 2006 Unaudited Group Profit and Loss Account for the year ended 31 March 2006. Notes 2006 2005 £000 £000 TURNOVER 1 12,344 10,717Changes in stocks of finished goods 16 35 ------ ------ 12,360 10,752 Raw materials and consumables 3,557 2,924 ------ ------ 8,803 7,828 Staff costs 3,284 3,243Depreciation and amortisation 794 728Other operating charges 2,325 2,225 ------ ------OPERATING PROFIT 2,400 1,632 Interest receivable 141 67Interest payable and similar charges (134) (191) ------ ------PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 2,407 1,508 Taxation 2 (581) (350) ------ ------PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 1,826 1,158 ====== ====== Earnings per ordinary share - basic 4 4.12p 2.74pEarnings per ordinary share - fully diluted 4 3.92p 2.66p The operating profit for the year arises from the Group's continuing operations. No separate Statement of Total Recognised Gains and Losses has been presented asall such gains and losses have been dealt with in the Profit and Loss Account. Unaudited Balance Sheet as at 31 March 2006. 2006 2005 £000 £000 (Restated see note 5)FIXED ASSETSIntangible assets 68 65Tangible assets 3,855 3,637 ------ ------ 3,923 3,702 CURRENT ASSETSStocks 124 108Debtors due within one year 2,523 1,854Debtors due after more than one year 561 296Cash at bank and in hand 3,452 2,864 ------ ------ 6,660 5,122 CREDITORS: Amounts falling due within one year (3,493) (2,785) ------ ------NET CURRENT ASSETS 3,167 2,337 ------ ------TOTAL ASSETS LESS CURRENT LIABILITIES 7,090 6,039 CREDITORS: Amounts falling due after more than oneyear (499) (904) PROVISION FOR LIABILITIES AND CHARGES (327) (312) ------ ------ 6,264 4,823 ====== ====== CAPITAL AND RESERVESCalled up share capital 447 443Share premium 3,823 3,769Merger reserve 211 211Other reserve 1 1Profit and loss account 1,782 399 ------ ------ 6,264 4,823 ====== ====== Equity shareholders' funds 6,264 4,823Non-equity shareholders' funds - - ------ ------ 6,264 4,823 ====== ====== Unaudited Cash Flow Statement for the year ended 31 March 2006. Notes 2006 2005 £000 £000 Net cash flow from operating activities 7a 2,466 2,425Returns on investments and servicing of finance 7b 7 (124) Taxation - 12 Capital expenditure 7b (973) (425) Equity dividends paid (443) - ------ ------NET CASH INFLOW BEFORE FINANCING 1,057 1,888 Financing 7b (469) 187 ------ ------INCREASE IN CASH IN YEAR 588 2,075 ====== ====== RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN FUNDS Increase in cash in the year 588 2,075Cash outflow from decrease in net debt financing 527 760 ------ ------Change in net debt resulting from cash flows 1,115 2,835New finance leases (45) (51) ------ ------MOVEMENT IN NET FUNDS IN THE YEAR 1,070 2,784 NET FUNDS/ (DEBT) AT BEGINNING OF THE YEAR 1,438 (1,346) ------ ------NET FUNDS AT END OF THE YEAR 7c 2,508 1,438 ====== ====== 1 TURNOVER AND PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION The principal components of turnover are the design and production of publicityand marketing material, and franchise fee income. All of the turnover is in onecontinuing business segment being the development of the Printing.com Franchiseand originates in the United Kingdom and Republic of Ireland. The directorsbelieve that full compliance with SSAP25 'Segmental Reporting' would beseriously prejudicial to the interests of the Group as it would requiredisclosure of commercially sensitive information. An analysis of turnover by geographical segment is given below: 2006 2005 £000 £000 United Kingdom 11,869 10,445Republic of Ireland 475 272 ------ ------ 12,344 10,717 ====== ====== 2 TAXATION 2006 2005 £000 £000 Corporation tax at 30% (2005: 30%) 566 -Overprovision in prior year - (12) ------ ------Total current tax 566 (12) Deferred tax:Origination of and reversal of timing differences 15 362 ------ ------ Tax on profit on ordinary activities 581 350 ====== ====== 2006 2005 £000 £000 Factors affecting the tax charge for the yearProfit on ordinary activities before taxation 2,407 1,508 ====== ====== Profit on ordinary activities before taxation multiplied by standard rate of UK corporationtax of 30% (2005: 30.00%) 722 452 Effects of:Non deductible expenses 5 30Income not chargeable (146) (92)Capital allowances in excess of depreciation (32) (51)Other tax adjustments 24 4Losses utilised (7) (343)Prior year adjustment - (12) ------ ------ (156) (464) ------ ------ Current tax charge/ (credit) 566 (12) ====== ====== 3 DIVIDENDS PAID AND PROPOSED 2006 2005 £000 £000 Declared and paid during the yearEquity dividends on ordinary shares: Final dividend for 2005 0.5p (2004: £Nil) 221 -Interim dividend for 2006 0.5p (2005: £Nil) 222 - ------ ------ 443 - ====== ====== Proposed for approval at Annual General Meeting (Not recognised at 31 March)Equity dividends on ordinary shares:Final dividend for 2006 1.25p (2005: 0.5p) 558 221 ====== ====== The £221,000 dividend proposed for the year ended 31 March 2005 has beenaccounted for as a distribution in 2006 in accordance with FRS 21 Postbalance sheet events. 4 EARNINGS PER SHARE The calculations of earnings per share are based on the following profits andnumbers of shares. 2006 2005 £000 £000Profit for the financial year 1,826 1,158 ====== ====== Weighted average number of shares 2006 2005 No. of No. of shares shares For basic earnings per share 44,312,566 42,208,789Exercise of share options 2,304,496 1,301,237 ------ ------ For basic earnings per share 46,617,062 43,510,026 ====== ====== 5 PRIOR YEAR ADJUSTMENT The Group policies for accounting for proposed dividends were changed duringthe year in order to comply with FRS 21 Post balance sheet events. Thecomparative figures in the financial statements and notes have been restatedto reflect this new policy. The effect of this change is as follows: 2006 2005 £000 £000 Balance sheet Profit and loss reserve (221) 221 ------ ------ (Decrease)/ increase in net assets (221) 221 ====== ====== 6 RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS 2006 2005 £000 £000 Restated Profit for the financial year 1,826 1,158 Dividends on equity shares (443) - Proceeds from issue of shares 58 947 ------ ------ Net addition to shareholders' funds 1,441 2,105 Opening shareholders' funds 4,602 2,718 Prior year adjustment 221 - As restated 4,823 2,718 ------ ------ Closing shareholders' funds 6,264 4,823 ====== ====== 7 NOTES TO THE STATEMENT OF CASH FLOWS 2006 2005 £000 £000 a Reconciliation of operating profit to net cash inflow from operating activities Operating profit 2,400 1,632 Amortisation 39 32 Depreciation 755 695 Increase in stocks (16) (35) Increase in debtors (934) (485) Increase in creditors 219 586 Loss on sale of fixed assets 3 - ------ ------ 2,466 2,425 ====== ====== b Analysis of Cash Flows For Headings Netted Off in the Cash Flow Statement 2006 2005 £000 £000 RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest received 141 67 Interest paid (1) (4) Interest element of finance lease rental payments (133) (187) ------ ------ Net cash outflow from returns on investments and servicing of finance 7 (124) ====== ====== CAPITAL EXPENDITURE Purchase of intangible assets (42) (43) Purchase of tangible assets (972) (405) Sale of tangible assets 41 23 ------ ------ Net cash outflow from capital expenditure (973) (425) ------ ------ 7 NOTES TO THE STATEMENT OF CASH FLOWS (continued) FINANCING Issue of ordinary share capital 58 1,232 Issue costs - (285) Repayment of bank loan - (168) Capital element of hire purchase contracts (527) (592) ------ ------ Net cash (outflow)/inflow from financing (469) 187 ====== ====== c Analysis of net funds/ (debts) Other non At At1 cash 31 March April 2005 Cash flow changes 2006 £000 £000 £000 £000 Net cash: Cash at bank and in hand 2,864 588 - 3,452 ------ ------ ------ ------ 2,864 587 - 3,452 Debt: Finance leases (1,426) 527 (45) (944) ------ ------ ------ ------ (1,426) 527 (45) (944) ------ ------ ------ ------ Net funds 1,438 1,115 (45) 2,508 ====== ====== ====== ====== 8 BASIS OF THE PRELIMINARY ANNOUNCEMENT The preliminary financial statements for the twelve months ended 31 March 2006were approved by the Board of Directors on 31 May 2006. The results areunaudited. The figures for the year ended 31 March 2006 do not constitute fullaccounts within the meaning of Section 240 of the Companies Act 1985. Thefigures for the year ended 31 March 2005 are audited. The preliminaryannouncement is prepared on the same basis as set out the previous year'sstatutory accounts except for FRS21 "Events after the balance sheet date", theeffects of which are disclosed in note 5. Those accounts, upon which theauditors issued an unqualified opinion, have been delivered to the Registrar ofCompanies. Branch List as at 1st June 2006 Outlet Region Town Post Code ------------------------------------------------------------------------- 1 Albry Printing Company Central England Wallingford OX10 9DA ------------------------------------------------------------------------- 2 Artichoke Design Central England Birmingham B18 6NN ------------------------------------------------------------------------- 3 Birmingham Store Central England Birmingham B5 4JL ------------------------------------------------------------------------- 4 Clientel Central England Kibworth LE8 0HS ------------------------------------------------------------------------- 5 Coventry Store Central England Coventry CV2 4BE ------------------------------------------------------------------------- 6 Cre8ive Design Central England Kenilworth CV8 1JD ------------------------------------------------------------------------- 7 Custard Creative Central England Northampton NN3 6WL ------------------------------------------------------------------------- 8 East Birmingham Central England Birmingham B26 3JR ------------------------------------------------------------------------- 9 First Image Central England Coventry CV5 7FW ------------------------------------------------------------------------- 10 For Colour Central England Newark, Nottingham NG24 1LE ------------------------------------------------------------------------- 11 Graphic Results Central England Belper DE56 1AY ------------------------------------------------------------------------- 12 High Tide Central England Sutton Coldfield B18 6NF ------------------------------------------------------------------------- 13 Husselworks Central England Halesowen B63 3HR ------------------------------------------------------------------------- 14 Ideas Taking Shape Central England Rugby CV21 2SD ------------------------------------------------------------------------- 15 Knight Mason Central England Broughton Astley LE9 6RD ------------------------------------------------------------------------- 16 Leicester Store Central England Leicester LE1 1LB ------------------------------------------------------------------------- 17 Mailboxes Central England Shrewsbury SY1 1HN ------------------------------------------------------------------------- 18 Nottingham Store Central England Nottingham NG1 6DQ ------------------------------------------------------------------------- 19 Oxford Store Central England Oxford OX2 7HT ------------------------------------------------------------------------- 20 Photo & Graphic Expertise Central England Banbury OX15 4FF ------------------------------------------------------------------------- 21 Sign It Central England Beeston, Nottingham NG9 2AY ------------------------------------------------------------------------- 22 South West Birmingham Central England Birmingham B16 9RD ------------------------------------------------------------------------- 23 The Ideas Room Central England Leicester LE3 0DL ------------------------------------------------------------------------- 24 Trident Design Central England Lutterworth LE17 4EE ------------------------------------------------------------------------- 25 Wolverhampton Store Central England Wolverhampton WV1 4BL ------------------------------------------------------------------------- 26 Goldengate East Suffolk IP30 9QS ------------------------------------------------------------------------- 27 Red Hot Media East Lowestoft NR32 1EB ------------------------------------------------------------------------- 28 South Dublin Store Ireland Dublin Dublin 2 ------------------------------------------------------------------------- 29 North Dublin Store Ireland Dublin Dublin 7 ------------------------------------------------------------------------- 30 TMC Ireland Tullow EE1 1EE ------------------------------------------------------------------------- 31 0800 Promote London Finchley N3 1TR ------------------------------------------------------------------------- 32 Central London Store London Baker Street NW1 6UY ------------------------------------------------------------------------- 33 Ealing Store London Ealing W13 8SB ------------------------------------------------------------------------- 34 Expocentric - Dover London Mayfair W1X 3PH ------------------------------------------------------------------------- 35 Expocentric - Wardour London Soho W1V 3AU ------------------------------------------------------------------------- 36 Full Colour Store London Clapham SW17 9SH ------------------------------------------------------------------------- 37 Guildford Store London Guildford GU1 3HY ------------------------------------------------------------------------- 38 Hampstead Store London Hampstead NW3 5HS ------------------------------------------------------------------------- 39 Harrow Life London Harrow HA1 2EA ------------------------------------------------------------------------- 40 Harrow Store London Harrow HA7 2QJ ------------------------------------------------------------------------- 41 Kink Design London Thornton Heath CR7 7AX ------------------------------------------------------------------------- 42 London Office Services London London W1G 8JR ------------------------------------------------------------------------- 43 London Print Compamy London Shaftesbury Avenue WC2H 8EB ------------------------------------------------------------------------- 44 Orpington Store London Orpington BR6 0JY ------------------------------------------------------------------------- 45 Print Express London Colindale NW9 5DL ------------------------------------------------------------------------- 46 Printer Net Services London Wimbledon SW19 8TY ------------------------------------------------------------------------- 47 Printhouse London Nottinghill W11 3HT ------------------------------------------------------------------------- 48 Reading Store London Reading RG1 4QA ------------------------------------------------------------------------- 49 Shiver London Camden NW1 0AG ------------------------------------------------------------------------- 50 Snow Media London Tooting SW17 0RG ------------------------------------------------------------------------- 51 Source Grafic Design London Catford SE6 1TJ ------------------------------------------------------------------------- 52 Talon Graphics London Thornton Heath CR7 7JW ------------------------------------------------------------------------- 53 TCG London Clapham SW11 1TN ------------------------------------------------------------------------- 54 Toppers London Stevenage SG1 3HR ------------------------------------------------------------------------- 55 Watford Store London Watford WD17 1RA ------------------------------------------------------------------------- 56 Kaleidoscope Midlands Leamington Spa CV31 1BZ ------------------------------------------------------------------------- 57 Ozmedia Print Midlands Loughborough LE12 8JH ------------------------------------------------------------------------- 58 Pewter Design Midlands Market Harborough LE16 7DS ------------------------------------------------------------------------- 59 St Ives Quickprint Midlands St Ives PE27 3WS ------------------------------------------------------------------------- 60 Bluprint North East Rotheram S60 8LZ ------------------------------------------------------------------------- 61 Bradford Store North East Bradford BD1 5BD ------------------------------------------------------------------------- 62 Colour Box Design North East York YO24 1AR ------------------------------------------------------------------------- 63 Colour Box Design North East York YO23 1NA ------------------------------------------------------------------------- 64 Creative Web Design UK North East Alnwick NE71 6EA ------------------------------------------------------------------------- 65 Doncaster Store North East Doncaster DN3 3TW ------------------------------------------------------------------------- 66 GOWEB Print North East Wakefield WF2 9BL ------------------------------------------------------------------------- 67 Hull Store North East Hull HU1 2AG ------------------------------------------------------------------------- 68 Leeds Store North East Leeds LS1 3DL ------------------------------------------------------------------------- 69 Maskerade Design North East Sunderland SR2 7PR ------------------------------------------------------------------------- 70 Middlesbrough Store North East Middlesbrough TS1 1LY ------------------------------------------------------------------------- 71 Multiprint North East Normanton WF6 2AF ------------------------------------------------------------------------- 72 Newcastle Store North East Newcastle NE1 5EE ------------------------------------------------------------------------- 73 Print House Direct North East Bishop Auckland DL14 0LZ ------------------------------------------------------------------------- 74 Print Ideas North East Leeds LS8 2HU ------------------------------------------------------------------------- 75 Pro-Actif Communications North East Darlington DL3 7TD ------------------------------------------------------------------------- 76 Ryedale North East Kirbymoorside YO62 6YB ------------------------------------------------------------------------- 77 Sheffield Store North East Sheffield S1 4GF ------------------------------------------------------------------------- 78 The Factory North East Leeds LS12 2DS ------------------------------------------------------------------------- 79 Viacreative North East Redcar TS10 5SH ------------------------------------------------------------------------- 80 Web Rocket Design North East Durham DH1 1RF ------------------------------------------------------------------------- 81 Blah D Blah North Wales Bangor LL57 1NY ------------------------------------------------------------------------- 82 Alert 2 Media North West Manchester M1 1DZ ------------------------------------------------------------------------- 83 Brightspark North West Carlisle CA2 5BB ------------------------------------------------------------------------- 84 Chilli Cactus North West Manchester M18 7JX ------------------------------------------------------------------------- 85 Copycat North West Maghull L31 2HB ------------------------------------------------------------------------- 86 Creation Publicity North West Manchester M17 1DZ ------------------------------------------------------------------------- 87 ER Design & Print North West Alsager CW2 5PR ------------------------------------------------------------------------- 88 Fluid Media North West Bury BB5 2LB ------------------------------------------------------------------------- 89 FX Design North West Queensferry CH5 2LR ------------------------------------------------------------------------- 90 Granthams - Blackpool North West Blackpool FY1 4PE ------------------------------------------------------------------------- 91 Granthams - Preston North West Preston PR1 2UQ ------------------------------------------------------------------------- 92 Impact Advertising North West Timperley WA15 7SP ------------------------------------------------------------------------- 93 Lancaster Store North West Lancaster LA1 1XN ------------------------------------------------------------------------- 94 Liverpool Store North West Liverpool L2 2HF ------------------------------------------------------------------------- 95 Mailboxes North West Stockport SK1 1LE ------------------------------------------------------------------------- 96 Mailboxes North West Didsbury M20 6UG ------------------------------------------------------------------------- 97 Manchester Store North West Manchester M3 4BQ ------------------------------------------------------------------------- 98 Masterprint North West St Helens WA10 1DH ------------------------------------------------------------------------- 99 North Manchester Store North West Manchester M3 4BQ ------------------------------------------------------------------------- 100 Print Design Warehouse North West Marple SK6 7AD ------------------------------------------------------------------------- 101 Print Hub Design North West Bolton BL1 3QJ ------------------------------------------------------------------------- 102 Printel North West Widnes WA3 8LG ------------------------------------------------------------------------- 103 RAS Limited North West Chester CH3 5AG ------------------------------------------------------------------------- 104 Rhino Design North West Ashton-under-Lyne OL6 6XJ ------------------------------------------------------------------------- 105 ScissorsPaperStone North West Eccles M30 8GH ------------------------------------------------------------------------- 106 Soda North West Golbourne WA3 3BU ------------------------------------------------------------------------- 107 Sprinter Printer North West Liverpool L22 4QD ------------------------------------------------------------------------- 108 The Agency Creative North West Manchester M17 1DZ ------------------------------------------------------------------------- 109 The Graphics Department North West Salford M3 5DN ------------------------------------------------------------------------- 110 The Graphics Lounge North West Nelson BB9 5DR ------------------------------------------------------------------------- 111 The Hub North West Trafford Park M17 1FG ------------------------------------------------------------------------- 112 Utopia North West Birkenhead CH41 7AB ------------------------------------------------------------------------- 113 Warrington Store North West Warrington WA1 1EP ------------------------------------------------------------------------- 114 Wild Thang North West Bootle L31 2HB ------------------------------------------------------------------------- 115 Bradbury Graphics Northern Ireland Belfast BT7 1BS ------------------------------------------------------------------------- 116 Mooney Media Northern Ireland County Down BT32 4QD ------------------------------------------------------------------------- 117 Xpress Creative Northern Ireland Newtonabbey BT36 4PU ------------------------------------------------------------------------- 118 Academy Press Scotland Livingstone EH54 6QD ------------------------------------------------------------------------- 119 Color Co. - Edinburgh Scotland Edinburgh EH2 2PA ------------------------------------------------------------------------- 120 Edinburgh Store Scotland Edinburgh EH3 6QY ------------------------------------------------------------------------- 121 Glasgow Print Scotland North Glasgow G64 1RX ------------------------------------------------------------------------- 122 West Glasgow Store Scotland Glasgow G3 8LZ ------------------------------------------------------------------------- 123 Hamilton (662c) Scotland Hamilton ML3 7AR ------------------------------------------------------------------------- 124 South Glasgow Store Scotland South Glasgow G5 9RR ------------------------------------------------------------------------- 125 Tangerine Scotland Stirling FK8 1JW ------------------------------------------------------------------------- 126 The Business Boutique Scotland Aberdeen AB24 5BW ------------------------------------------------------------------------- 127 X Display Systems Scotland Coatbridge ML5 4AS ------------------------------------------------------------------------- 128 Brighton Store South Brighton BN2 8AA ------------------------------------------------------------------------- 129 Republique South Brighton BN1 4GH ------------------------------------------------------------------------- 130 Tudor Print South Worthing BN11 1UY ------------------------------------------------------------------------- 131 Haus of Print South East Andover SP11 6RU ------------------------------------------------------------------------- 132 Ashford Store South East Ashford TN24 8UU ------------------------------------------------------------------------- 133 Felix Communications South East Rochester ME2 4HZ ------------------------------------------------------------------------- 134 Graphics One South East Norwich NR7 0EQ ------------------------------------------------------------------------- 135 Great Printers South East Newbury RG14 5SA ------------------------------------------------------------------------- 136 Grow Marketing South East Whitstable CT3 4JH ------------------------------------------------------------------------- 137 Home Counties Graphics South East Dunstable LU6 1SX ------------------------------------------------------------------------- 138 Inprint South East Colchester CO1 1PB ------------------------------------------------------------------------- 139 Jelly Bean Graphics South East Croydon CR9 6YJ ------------------------------------------------------------------------- 140 Lussh Creative South East Chesterfield S40 2BY ------------------------------------------------------------------------- 141 Luton Store South East Luton LU1 2PL ------------------------------------------------------------------------- 142 Mailboxes South East Cambridge CB2 1FD ------------------------------------------------------------------------- 143 Norfolk Store South East Norwich NR3 1YE ------------------------------------------------------------------------- 144 Studio Direct South East Chelmsford CM2 6HE ------------------------------------------------------------------------- 145 That Life Multimedia Centre South East Maidenhead SL6 1NB ------------------------------------------------------------------------- 146 Think Tank South East Canterbury CT14 7HR ------------------------------------------------------------------------- 147 TRS Graphics South East Croydon CR2 6EB ------------------------------------------------------------------------- 148 Anneset South West Weston-Super-Mare BS23 3DE ------------------------------------------------------------------------- 149 Bournemouth Store South West Bournemouth DT1 1HS ------------------------------------------------------------------------- 150 Bristol Store South West Bristol BS1 3LZ ------------------------------------------------------------------------- 151 Chalk & Cheese South West Ruislip HA4 6HH ------------------------------------------------------------------------- 152 Exeter Store South West Exeter EX4 3AJ ------------------------------------------------------------------------- 153 Malthouse South West Taunton TA1 3EP ------------------------------------------------------------------------- 154 Plymouth Store South West Plymouth PL4 0AU ------------------------------------------------------------------------- 155 Presto Print South West Christchurch BH23 1QD ------------------------------------------------------------------------- 156 Print Creative South West Bath BA1 2JB ------------------------------------------------------------------------- 157 Printing South West South West Totnes TQ9 5DW ------------------------------------------------------------------------- 158 Southampton Store South West Southampton SO15 2AE ------------------------------------------------------------------------- 159 Wessex Direct South West Minehead TA24 5UB ------------------------------------------------------------------------- 160 Australian Welsh Wales Cardiff CF14 3JP ------------------------------------------------------------------------- 161 Cardiff Store Wales Cardiff CF5 1JF ------------------------------------------------------------------------- 162 Limelight Graphix Wales Bridgend CF31 3SA ------------------------------------------------------------------------- 163 Colourbox Creative Wales Swansea SA1 5TY ------------------------------------------------------------------------- This information is provided by RNS The company news service from the London Stock Exchange