GRA.L Regulatory News (GRA)

17 Feb 2005 07:00

Printing.com plc17 February 2005 For Release 7.00 AM 17 February 2005 PRINTING.COM PLC ("Printing.com" or "the Company") Specialist retail chain with 97 Outlets (plus 12 pending) across the UK TRADING UPDATE * Year's expected pre tax profit broadly in line with expectations, albeit at the lower end of the range* Fiscal Q3 trading in line with expectations, January sales slightly disappointing - February stronger* The Agency - trading continues below expectations* 3 new Territory Franchise Stores opened* Strong pipeline of imminent openings* 30 Stores operational with 7 pending* 67 Bolt-on Franchises operational with 5 pending* Successful launch of 'Flyerlink Pro'* Finalising purchase of a third printing press facilitating an estimated 'Total Retail Sales' capacity in excess of £30 million.* Company continues to gain momentum* Optimistic that the continued momentum will translate into future earnings growth Recent Trading from Stores and Bolt-on Franchises Post the close of the interim period, trading in the Company's Stores (bothCompany owned and franchised) together with its Bolt-on Franchises, in therespective four week trading periods ending 7 November, 5 December and 2 Januaryproved broadly in line with expectation. In contrast, the period ending 30January, which featured the Company's January Sale, although higher than 2004,proved slightly disappointing: however, this does not appear to be a trend astrading in the current period is stronger and in line with expectations. Territory Franchise Development At the time of the Interim announcement we reported that Territory FranchiseAgreements had been completed for Bournemouth and Middlesbrough. Both of theStores have now commenced trading, albeit later than expected due to the delayedfinalisation of property matters. An additional Territory Franchise Agreementhas been completed for 'London Southeast' and encouragingly the Store, locatedin Orpington, is now trading. It is anticipated that the Coventry and DublinNorth franchises will also open by 31 March 2005. Property negotiations continuein Brighton. Additional Options (each involving the payment of a non-refundable deposit of£6,000) have been taken out, covering Manchester North, Hertfordshire, andNottingham (presently a Company owned Store). A Management Buy Out of ourSheffield Store is also expected soon. The option over the Hull Store haslapsed. This takes the present number of operational Stores to 30 (12 Companyowned), with a further 7 pending. Further Options are at an advanced stage ofnegotiation. With the advent of these anticipated openings we will have achieved ourTerritory Franchise expansion target for the financial year, albeit the patternof openings will be weighted towards the third and especially the fourthquarters. Bolt-on Franchise Development Post the Interim period, an additional 7 Bolt-on Franchise agreements have beencompleted, one has been terminated. This takes the number of operational Bolt-onFranchises to 67 with a further 5 pending. In addition to the TerritoryFranchisees who market the Bolt-on Franchise opportunity locally, a nationalpromotional campaign will commence mid-February. The new campaign features casestudies of Bolt-on Franchises who have added significant additional revenues totheir businesses via the Bolt-on Franchise. It is it hoped this will prove animportant element in accelerating Bolt-on Franchise expansion. The Agency At the Interim stage we reported that the 'Agency' (formerly referred to as theCompany's 'Traditional Markets') had, after two years of successful growth,shown a decline in like for like sales. Regrettably this trend has continued, weestimate that turnover from this division may fall circa £350,000 short of thatfor the previous year to approximately £1,587,000 (2004 £1,937,000). Essentiallythis is attributed to the contraction of two key accounts. In our Interimannouncement we reported our intention to franchise the Agency, this remains ouraim. Successful Launch of Flyerlink Pro The Company is pleased to report that on 20 December a new generation of itsFlyerlink Software was successfully launched under the branding 'Flyerlink Pro'.The original Flyerlink was launched in May 1994 and operated within an 'MS DOS'environment. Over the years it was significantly expanded and adapted to reflectthe Company's changing business model. In 2001, an interface was added to allowcertain functionality within a standard browser window. This facilitated theBolt-on Franchise expansion. Even though the principal architecture of Flyerlink Pro is taken directly fromthe previous version, the project took more than two years, reflecting thecomplexity of the software and its inherent barrier to entry. Flyerlink Pro iswritten in a Linux environment and runs 'real time' via a standard web browser. The project to date represents an investment of over £250,000, which has beenfinanced from operational cash flow. Flyerlink Pro now provides a platform to facilitate our planned UK expansionover the next few years. As it embraces both multi-currency and multi-huboperations it will also enable us to exploit other territories or grant masterfranchises. Flyerlink Pro will continue to be developed on an ongoing basis tofurther enhance operations. Additional Press The Company is presently finalising the purchase of a third printing press at acost of circa £1 million. The press should be commissioned during Q3 of the nextfiscal year. It will be located at the Company's Manchester Hub, with the adventof a second hub now being targetted once Total Retail Sales have passed the £30million point. Outlook During the current financial year we have encountered operational challengessuch as the timing of certain Store openings, the disappointing trading in earlysummer and January coupled with the revenue shortfall from the Agency.Notwithstanding these challenges and assuming that imminent franchise dealsprogress, we would expect our pre tax profit for the year to be broadly in linewith expectations, albeit at the lower end of the range. Moving forward our objective is to open a similar number of Territory Franchisesover the coming financial year, with the current pipeline of prospectivefranchisees encouraging us that this is realistic. In addition we hope toaccelerate the roll out of our Bolt-on Franchise programme. The launch ofFlyerlink Pro and our plans for a third press also reflect our confidence thattransactional volumes will continue to grow significantly as momentum continuesto build. Recent market research reaffirms the Printing.com competitive advantage. Ithighlights that the Company continues to offer a higher specification of printat a more favourable price point than the market at large. The cornerstone ofour franchise orientated strategy is the premise that each Outlet makes apositive contribution pre and post opening in terms of both cash and profit.Accordingly we remain optimistic that the scope exists for significant furthergrowth in our earnings and cash generation. For further information: Printing.com plc Tony Rafferty (Chief Executive) 07966 51 73 36Alan Roberts (Finance Director) 0161 848 5713 Beattie Financial Brian Coleman-Smith / John Moriarty / Jo Clewlow 020 7398 3300 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 on location.The Company's printing and ancillary equipment is based at the centralisedProduction Hub with the head office in Manchester. All work is produced in fullfour colour rather than two colour. Delivery to the customer is usually withinthree days. The printing sector has traditionally been served by smallerprinting companies or other On Demand Printers and is estimated to be worth some£1 billion. Printing.com has three routes to market: Franchise Stores, Bolt-on Franchisesand Company owned Stores. Company Stores Region Town Post Code-------------- ---------- ------------ --------Dublin Store Ireland Dublin Dublin 2-------------- ---------- ------------ --------Birmingham Store Midlands Birmingham B5 4JL-------------- ---------- ------------ --------Nottingham Store Midlands Nottingham NG1 6DQ-------------- ---------- ------------ --------Oxford Store Midlands Oxford OX2 7HT-------------- ---------- ------------ --------Hull Store North East Hull HU1 2AG-------------- ---------- ------------ --------Sheffield Store North East Sheffield S1 4GF-------------- ---------- ------------ --------Liverpool Store North West Liverpool L2 2HF-------------- ---------- ------------ --------The Hub North West Trafford Park M17 1FG-------------- ---------- ------------ --------Manchester Store North West Manchester M3 4BQ-------------- ---------- ------------ --------Edinburgh Store Scotland Edinburgh EH3 6QY-------------- ---------- ------------ --------Edinburgh Store Scotland Edinburgh EH3 9LY-------------- ---------- ------------ --------Bristol Store South West Bristol BS1 3LZ-------------- ---------- ------------ -------- Franchise Stores-------------- ---------- ------------ --------Orpington Store London Orpington BR6 0JY-------------- ---------- ------------ --------Harrow Store London Harrow HA7 2QJ-------------- ---------- ------------ --------Central London Store London Baker Street NW1 6UY-------------- ---------- ------------ --------Hampstead Store London Hampstead NW3 5HS-------------- ---------- ------------ --------Reading Store London Reading RG1 4QA-------------- ---------- ------------ --------Ealing Store London Ealing W13 8SB-------------- ---------- ------------ --------Watford Store London Watford WD17 1RA-------------- ---------- ------------ --------Leicester Store Midlands Leicester LE1 1LB-------------- ---------- ------------ --------Wolverhampton Store Midlands Wolverhampton WV1 4BL-------------- ---------- ------------ --------Middlesbrough Store North East Middlesbrough DL16 7HH-------------- ---------- ------------ --------Leeds Store North East Leeds LS1 3DL-------------- ---------- ------------ --------Newcastle Store North East Newcastle NE1 5EE-------------- ---------- ------------ --------Lancaster Store North West Lancaster LA1 1XN-------------- ---------- ------------ --------Warrington Store North West Warrington WA1 1EP-------------- ---------- ------------ --------Glasgow Store Scotland Glasgow G3 8LZ-------------- ---------- ------------ --------Bournemouth Store South Bournemouth DT1 1HS-------------- ---------- ------------ --------Ashford Store South East Ashford TN24 8UU-------------- ---------- ------------ --------Plymouth Store South West Plymouth PL4 0AU-------------- ---------- ------------ -------- Franchisees Region Town Post Code-------------- ---------- ------------ --------Goldengate East Suffolk IP30 9QS-------------- ---------- ------------ --------Red Hot Media East Lowestoft NR32 1EB-------------- ---------- ------------ --------0800 Promote London North Finchley N12 9QG-------------- ---------- ------------ --------0800 Promote London Finchley N3 1TR-------------- ---------- ------------ --------Print Express London Colindale NW9 5DL-------------- ---------- ------------ --------London & General London Chelsea SW10 0XF-------------- ---------- ------------ --------Full Colour Store London Clapham SW17 9SH-------------- ---------- ------------ --------Printer Net Services London Wimbledon SW19 8TY-------------- ---------- ------------ --------Printhouse London Nottinghill W11 3HT-------------- ---------- ------------ --------Expocentric - Wardour London Soho W1V 3AU-------------- ---------- ------------ --------Expocentric - Dover London Mayfair W1X 3PH-------------- ---------- ------------ --------London Print Compamy London Shaftesbury Avenue WC2H 8EB-------------- ---------- ------------ --------Artichoke Design Midlands Birmingham B18 6NN-------------- ---------- ------------ --------Hussellworks Midlands Halesowen B63 3HR-------------- ---------- ------------ --------Dove Signs Midlands Nuneaton CV11 6GX-------------- ---------- ------------ --------Ideas Taking Shape Midlands Rugby CV21 2SD-------------- ---------- ------------ --------Kaleidoscope Midlands Leamington Spa CV31 1BZ-------------- ---------- ------------ --------Cre8ive Design Midlands Kenilworth CV8 1JD-------------- ---------- ------------ --------Graphic Results Midlands Belper DE56 1AY-------------- ---------- ------------ --------Ozmedia Print Midlands Barrow Upon Soar LE12 8JH-------------- ---------- ------------ --------Pewter Design Midlands Market Harborough LE16 7DS-------------- ---------- ------------ --------The Ideas Room Midlands Leicester LE3 0DL-------------- ---------- ------------ --------For Colour Midlands Newark, Nottingham NG24 1LE-------------- ---------- ------------ --------Sign It Midlands Beeston, Nottingham NG9 2AY-------------- ---------- ------------ --------Custard Creative Midlands Northampton NN3 6WL-------------- ---------- ------------ --------Albry Printing Company Midlands Wallingford OX10 9DA-------------- ---------- ------------ --------St Ives Quickprint Midlands St Ives PE27 3WS-------------- ---------- ------------ --------Final Imaging Midlands Sawtry PE28 5SB-------------- ---------- ------------ --------The Studio Midlands Walsall WS1 1JQ-------------- ---------- ------------ --------Print House Direct North East Bishop Auckland DL14 0LZ-------------- ---------- ------------ --------Pro-Actif Communications North East Darlington DL3 7TD-------------- ---------- ------------ --------The Factory North East Leeds LS12 2DS-------------- ---------- ------------ --------Creative Web design UK North East Alnwick NE71 6EA-------------- ---------- ------------ --------Maskerade Design North East Sunderland SR2 7PR-------------- ---------- ------------ --------GOWEB North East Wakefield WF2 9BL-------------- ---------- ------------ --------Multiprint North East Normanton WF6 2AF-------------- ---------- ------------ --------Colour Box Design North East York YO23 1NA-------------- ---------- ------------ --------Blah D Blah North Wales Bangor LL57 1NY-------------- ---------- ------------ --------Print Hub Design North West Bolton BL1 3QJ-------------- ---------- ------------ --------RAS Limited North West Chester CH3 5AG-------------- ---------- ------------ --------ER Design & Print North West Alsager CW2 5PR-------------- ---------- ------------ --------Granthams - Blackpool North West Blackpool FY1 4PE-------------- ---------- ------------ --------Silverback North West Isle of Man IM1 2LA-------------- ---------- ------------ --------Copycat North West Maghull L31 2HB-------------- ---------- ------------ --------Alert 2 Media North West Manchester M1 1DZ-------------- ---------- ------------ --------Granthams - Preston North West Preston PR1 2UQ-------------- ---------- ------------ --------Mailboxes North West Stockport SK1 1LE-------------- ---------- ------------ --------Print Design Warehouse North West Marple SK6 7AD-------------- ---------- ------------ --------Masterprint North West St Helens WA10 1DH-------------- ---------- ------------ --------Impact Advertising North West Timperley WA15 7SP-------------- ---------- ------------ --------Printel North West Widnes WA3 8LG-------------- ---------- ------------ --------Mooney Media Northern Ireland County Down BT32 4QD-------------- ---------- ------------ --------Xpress Creative Northern Ireland Newtonabbey BT36 4PU-------------- ---------- ------------ --------Bradbury Graphics Northern Ireland Belfast BT7 1BS-------------- ---------- ------------ --------Color Co. - Edinburgh Scotland Edinburgh EH2 2PA-------------- ---------- ------------ --------Glasgow Print Scotland North Glasgow G64 1RX-------------- ---------- ------------ --------Haus of Print South Andover SP11 6RU-------------- ---------- ------------ --------Studio Direct South East Chelmsford CM2 6HE-------------- ---------- ------------ --------Inprint South East Colchester CO1 1PB-------------- ---------- ------------ --------TRS Graphics South East Croydon CR2 6EB-------------- ---------- ------------ --------Felix Communications South East Rochester ME2 4HZ-------------- ---------- ------------ --------Lussh Creative South East Chesterfield S40 2BY-------------- ---------- ------------ --------Print Creative South West Bath BA1 2JB-------------- ---------- ------------ --------Presto Print South West Christchurch BH23 1QD-------------- ---------- ------------ --------Anneset South West Weston-Super-Mare BS23 3DE-------------- ---------- ------------ --------Malthouse South West Taunton TA1 3EP-------------- ---------- ------------ --------Australian Welsh Wales Cardiff CF14 3JP-------------- ---------- ------------ -------- This information is provided by RNS The company news service from the London Stock Exchange