Final Results

RNS Number : 0838T

Printing.com plc

01 June 2009

 



FOR RELEASE  

7.00AM

1 June 2009

PRINTING.COM PLC

('Printing.com' or 'the Group')

Specialist retail chain with 283 Outlets opened and pending across the UK and Ireland

Preliminary Results for year ended 31 March 2009

	2009	2008	Change
Total Retail Sales	£26.29m	£24.58m	+7.0%
Turnover	£14.47m	£13.48m	+7.3%
EBITDA	£3.27m	£3.67m	-10.9%
Operating Profit	£1.93m	£2.29m	-15.7%
Profit Before Tax	£2.06m	£2.42m	-14.9%
Earnings Per Share - Basic	3.28p	3.64p	-9.9%
EPS - Fully Diluted	3.27p	3.51p	-6.8%
Dividend	3.15p	3.00p	+5.0%
Special Dividend	2.00p	-
Capital expenditure	£0.59m	£1.26m
Net Cash	£3.39m	£3.50m
Net Funds	£1.81m	£1.08m
Number of Outlets	283	249

• Outlets increased by 34 

• Master Licence Agreement granted in the US

• Profit in line with market expectations

• Remaining profitable and cash generative in difficult market conditions

• Ordinary dividend increased

• Special dividend granted

For further information:

Printing.com plc Tony Rafferty (Chief Executive) Alan Roberts (Finance Director)	07966 517 336 0161 848 5713
Cubitt Consulting Brian Coleman-Smith / Nicola Krafft / James Verstringhe	020 7367 100
Brewin Dolphin Ltd (Nominated Adviser)
Mark Brady	0845 213 4730

  Background note:

Printing.com

In the UK & Ireland Printing.com offers a broad product range including leaflets, booklets, postcards, promotional cards, invitations, letterheads and business cards to consumers and small and medium sized companies. Unlike its competitors, Printing.com's Stores and Franchises do not depend on any printing equipment on location. The Group's printing and ancillary equipment is based at the centralised Production Hub with the head office in Manchester. All work is produced in full four colour rather than two colour. The printing sector has traditionally been served by smaller printing companies or other On Demand Printers and is estimated to be worth some £1- £2 billion.

Printing.com has three routes to market: Franchise Stores, Bolt-on Franchises and Company owned Stores.

A complete list of Printing.com's active Outlets in the UK & Ireland is included at the end of the release.

 PRINTING.COM PLC

('Printing.com' or 'the Group')

Specialist retail chain with 283 Outlets opened and pending across the UK and Ireland

Preliminary Results for year ended 31 March 2009

CHAIRMAN'S STATEMENT

Trading Results

Total Retail Sales ('TRS'), the Company's estimate of the value of sales to the end user (via both its Franchise and directly owned outlets), increased 7.0% to £26.29m (2008:£24.58m). Turnover increased 7.3% to £14.47m  (2008: £13.48m) whilst Profit before Tax ('PBT') decreased by 14.9% to £2.06m (2008:£2.42m).

Previously, we would have anticipated EBITDA to advance as volumes increased. This has not been the case in the year under review, reflecting some erosion of operating margin. This has been due to an increase in the provision for bad debts, marketing subsidies designed to support sales through our outlets, and a greater proportion of discounted orders.

The Board is mindful that the year under review marks the first year, since the Company's move to AIM, that earnings have not progressed. Ordinarily, we would be duly disappointed with such a result but, given the extremely challenging economic situation, we believe this represents an acceptable outcome. 

Cash

Your Company closed the year with cash of £3.39m (2008:£3.50m). Investment in capital equipment, including the on-going development of the Company's Flyerlink software, totalled only £0.59m (2008:£1.26m). None of the capital expenditure was financed (2008:£0.50m).

Return of Shareholder funds  

The Board has been keen to advance the return of funds to Shareholders by its progressive dividend policy and, more recently, via the buying back of Company shares. Whilst the dividend has indeed progressed, the buying back of a material volume of shares has proved impractical due to the lack of market liquidity. 

After careful consideration of the Company's reserves, cash position and prospects moving forward, the Directors believe that, notwithstanding the need to be prudent in these present difficult economic circumstances, the Company remains in a position to return additional funds to Shareholders. Accordingly, it is the Directors' intention to do this via the declaration of a Special Dividend. 

Share Buy Backs 

During the year under review, 768,702 shares were bought back into Treasury for a total consideration of £263,000. 

Final Dividend 

Your Board is proposing a final dividend of 2.10p for the year, to be paid on 23 July 2009 to Shareholders on the register at the close of business on 26 June 2009. This makes a total dividend for the year of 3.15p per ordinary share (2008:3.00p). 

Special Dividend

The Directors are declaring a Special dividend of 2.00p per qualifying ordinary share, amounting to £887,000, payable on 26 June 2009 to shareholders on the register as at 12 June 2009. 

 People at Printing.com

In these difficult times, I am mindful of the additional effort of all of our people within the Printing.com network but would particularly like to extend my sincere thanks to our Franchise Partners for their efforts.

Outlook

Since the year end, trading across the UK and Ireland has continued at a similar underlying level. Whilst at this juncture we are not seeing growth in TRS, we are attracting a record level of new clients and remain of the belief that the Printing.com model is proving significantly more resilient than many others in the sector.  

Whilst we realise we are not immune to the possibility that some Franchisees may not continue, or that certain Bolt-on Franchisees may follow alternative strategies, we believe that the scope for network growth during the current year remains a realistic ambition. Indeed, recent marketing initiatives to promote a Bolt-on Franchise opportunity have once again produced a strong pipeline of prospective partners. 

Outside of the UK and Ireland, our New Zealand partners continue to make solid progress and reflect the Board's belief in the scope for exporting the model. Printing.com France is making progress and is on the cusp of making a positive contribution. The grant of a Master Licence for the US is clearly a significant opportunity, albeit operations are still at a very early stage. Whilst these initiatives collectively contribute very little at present in fiscal terms, we believe they continue to represent an important opportunity.

Whilst we remain cautious about the prospects for progress, we believe that, as and when the economic situation across the UK and Ireland improves, Printing.com will be well-placed to capitalize on its position.

George Hardie

Chairman

1 June 2009

 CHIEF EXECUTIVE'S STATEMENT

	31 March 2009	31 March 2008
Company Owned Stores	7	4
Territory Franchise Stores	35	40
Bolt-on and Boutique Franchises	241	205
Total	283	249

Estate Development

This year, in common with recent years, we have continued to record a steady increase in the total number of Printing.com outlets across the UK and Ireland, with the estate, as of the year end, standing at 283 outlets, an increase of 34 during the year. The Bolt-on format continues to be the driver for this expansion.  

During the year under review, again in common with recent years, the number of new franchise licences granted, 62, is far greater than growth in the number of outlets. This is because we are not immune to some instances of termination and also reflects the complementary nature of the Bolt-on franchise format.

Prior to adding the Printing.com element, Bolt-on Franchises ordinarily start out pursuing an independently formulated business model centred on the printing, graphic arts or web design sectors. 

Accordingly, the plural nature of their offering increases the likelihood that, from time-to-time, the owners of these businesses may seek to pursue a strategy less conducive to Printing.com. In these instances, our primary objective is the continuance of the service to the Printing.com client base, and the preservation of employment opportunities for Printing.com operators. These situations are often resolved by one of the business partners, employees or competitors 'buying out' the Printing.com element, or the sale to a neighbouring franchisee. This may involve the termination of one franchise agreement but also the contemporaneous grant of a new licence. 

Such occurrences could be dismissed as 'undesirable churn' we still believe that they simply reflect a characteristic of the independent entrepreneurs who we partner with. Over the course of the current year, we anticipate an increase in these instances due to the general economic situation. However, we continue to believe that, notwithstanding this, we will again achieve real growth in the size of the network and the estate will exceed 300 outlets by the end of the year.

 Production Hub and Infrastructure

The Production Hub infrastructure is well bedded-in, and we continue the ongoing refinement of operational processes whilst always seeking greater efficiency. We remain of the view that we have TRS capacity in excess of £40million within the Manchester facility. Accordingly, very little additional investment in the plant is planned at this juncture. 

This has, however, been an important year in the on-going development of Flyerlink, the Company's proprietary software. Much of this development relates to the addition of certain 'foundations' that allow us to deal with Master Licence complexities beyond simply multi-language capabilities.

Whilst Flyerlink has always provided the link between the Franchisee and the production centre, 'my.printing.com' provides a suite of online tools that enhance the interaction between the Printing.com Franchisee and the end user. During the course of the year, the Company significantly enhanced the 'my.printing.com' portal, notably adding Kodak's 'Smart Review' software to facilitate online proofing. 

The complex, design-orientated and consultative led-nature of the typical Printing.com order means that these tools are not intended to replace the franchisee but simply to provide a more efficient ordering, proofing, artwork approval and billing experience for all concerned. 

In the course of the current year, we plan to include template systems to facilitate business card name changes and the like. We believe that this functionality will further augment the Printing.com Bolt-on Franchise by providing not only low-cost print and marketing assistance, but also a complete e-commerce solution 'in a box'. 

New Zealand and Iceland Master Licences

The Company's Master Licence programme enables companies in other geographic territories, wishing to emulate the success of Printing.com across the UK and Ireland, to license the Printing.com systems. This generates revenue channels for your Company in terms of an initial licence fee, circa 3% of TRS for the given partner, and 20% of licence fees charged in respect of the grant of local outlets. For the partner, we believe this offers good value, in that they are able to utilize all the collateral and know-how acquired by Printing.com together with, and very importantly, the Company's Flyerlink software. 

The Company's established Master Licence partner in New Zealand, PrintStop, continues to enjoy success with the expansion of their network of outlets, embracing the 'powered by Printing.com' insignia. The network presently stands at 46 outlets. Operations in Iceland remain at an early stage. 

Grant of US Master Licence 

During the year we are very pleased to have granted an additional master licence, covering the US. This licence has been granted to Raintree Graphics, a commercial printer in Jacksonville, Florida. Following training in the UK and the US, they have commenced operations with Printing.com Stores in both Jacksonville and Gainesville and 5 Bolt-on Franchisees have also been granted. Whilst it is little more than two months since the first orders were taken, we remain optimistic about the potential for the development of Printing.com initially in the South East of the country and, in the fullness of time, across the US.

France and Australia

We have previously set out our intention to establish Printing.com operations in both France and Australia, with the former reliant on the Manchester Hub and the latter embracing third party production. 

Following several interesting avenues of exploration, during which, and on commercial terms, an Option was taken out over Australia, our initiatives in this respect have not progressed. We have elected not to proceed and establish operations ourselves until the economic cycle improves. 

The French operations are at a more advanced stage, with 10 franchises now generating regular transactions. Indeed several French franchisees are producing operational metrics that would be consistent with any accomplished franchise in the UK. It is also still our intention to open two stores in France as and when suitable opportunities arise.

We believe that the components are now in place for Printing.com to take meaningful steps forward during the present financial year and it remains our objective of progressing a management buy-out/management buy-in at a suitable juncture of the French business.

Websites by Printing.com

Over the year we have continued to invest in our 'websites solution' and believe that the offering has evolved, in terms of the functionality offered to the client and the ease of use for the Franchisee. Whilst to date this has not translated into a material revenue stream, we remain convinced of its strategic importance in terms of vending new media solutions in parallel with printed material. 

Network Partners

The aim of the network partner programme was to open up the Printing.com network to reputable vendors of alternative printed items, such as pens, work apparel, office products and the like.  During the year, the initial pilot group was extended and now includes more than a third of the network. It is anticipated that the offering will be made available to all Franchisees during the course of the current year. Promotional items of this ilk are often an accessory to the nucleus of an advertising campaign. Thus, the timing of the launch proved unfortunate.  

Whilst revenues from this initiative remain modest, we remain committed to exploring what we believe to be the inherent logic of making available more services to our franchisees, and being a 'one-stop-shop' for our clients' promotional needs. 

Environment

In all aspects of Printing.com operations we seek to reduce the environmental impact of the business. This is reflected by the reaffirming of our ISO 14001 status, embracing our initiatives to increase the proportion of FSC certified papers, reduce packaging and minimise waste.

In addition, we are pleased to continue our support for the 'Tree Appeal with David Bellamy', whereby clients' orders equate to trees planted. Currently we stand on the cusp of achieving our goal of planting 50,000 trees and have recently pledged to raise this target to 100,000 trees over the coming years. 

Current Trading 

Following on from a drop in trading levels in November 2008, trading remained 'steady' at the lower level, during the remainder of the year under review and, indeed, the subsequent two months. If trading remains at this level for the course of the current year, then TRS will be slightly below the previous year. 

Compared to historic levels, a greater proportion of transactions are carried out at discounted levels, pursuant to various monthly and seasonal offers. We remain realistic and believe that these discounts are necessary for the foreseeable future to assist our Franchisees. 

The Company continues to attract a record level of new clients, attributable to the increased level of centralised marketing, the potency of the various promotional offers and the closure of many small local printers who were previously in competition. However, the overall yield per client has reduced and certain market segments that were previously productive, such as estate agents and recruitment companies, have declined significantly.  

Printing.com has always attracted corporate clients and public sector professionals in addition to its core marketplace of small and medium sized enterprises ('SME'). These larger clients generally turn to Printing.com for low value orders. It is our belief that they are attracted to Printing.com as it is easier to transact these small orders with the Company, than via internal procurement routes. 

Initiatives have been developed and launched to better position your Company within this corporate and public sector marketplace. Centered on the premise of not seeking to replace the existing printer, but being useful for urgent, awkward, low order values and low volumes. To this end, over one hundred training days for Franchisees have been delivered at sessions around the UK, with the objective of the entire estate being exposed to this initiative over the coming months. We are aware that this 'pitch' has been well received by managers within the marketing departments of various high profile brands and remain optimistic that it will add material revenues during the course of the year.  

Tony Rafferty

Chief Executive 

1 June 2009

FINANCIAL REVIEW

Total Retail Sales (TRS) 

The Group's key metric of Network growth, across the UK and Ireland, is TRS, being the estimated retail price paid by the client for product sourced from the Group's Production Hub. The ongoing development of Printing.com is clearly illustrated with estimated TRS increasing by 7.0% to £26.29 m (2008:£24.58m).

Like For Like TRS

This metric reports on the like for like progress of our Territory Franchisees (or equivalent Group owned operations) that have operated for a minimum of three years. Therefore, the earliest figures that could be reported for a Territory Franchise are its third versus second year. In presenting these figures we believe that it is essential to consider both the performance of the Store within the Territory Franchise and the growth in revenues from its associated Bolt-On Franchises. On this basis like for like growth during the year under review was 10.73% (2008:16.44%) with 38 (2008:29) Territory Franchises (or Group owned equivalents) contributing to this metric.  

Revenue

Overall revenue increased by 7.3% from £13.48m to £14.47m. Network growth continues to be driven by the increase in the number of Bolt-on Franchises.  

Gross Profit

The Group's simple definition of Gross Profit is revenue less direct materials (including the cost of distribution, when made direct to customers).

Gross Profit increased by 8.1% from £9.01m to £9.74m. In percentage terms it remained relatively constant at 67.3% (2008:66.9%) of revenue.

EBITDA

At £3.27m (2008:£3.67m) EBITDA decreased by 10.9%. Although TRS improved by 7%, the Group's initiative to support network marketing activity and provisions for doubtful debts led to EBITDA decreasing by £0.40m. 

Pre-Tax Profit

The Group recorded a pre tax profit of £2.06m (2008:£2.42m) being 14.2% (2008:18.0%) of Group revenue and 7.8% (2008:9.8%) of TRS.

Staff costs increased in the year to £3.60m (2008:£3.22m) and rose as a percentage of revenue from 23.9% to 24.9%. The increase in the number of Group Stores raised head count, staff costs and operational overhead. The depreciation and amortisation charge for the year was £1.33m (2008:£1.38m) falling slightly from last year's peak.

Interest Received and Charged

Interest received of £0.18m (2008:£0.24m) reflects interest on the cash balances held and interest charged to Franchisees on loans to them from Printing.com. Interest paid of £0.11m (2008:£0.19m) primarily on lease finance repayments.

Taxation

In the year the standard rate for tax was 28% (2008:30%). The charge for the current year is £0.60m or 29.2% of PBT (2008:£0.79m or 32.6%). 

The effective tax rate was closer to the standard rate in the period due to disallowed expenses being offset by timing differences.

Earnings Per Share (EPS)

Basic EPS achieved was 3.28p (2008:3.64p), the weighted average number of shares used was 44,485,293. Diluted EPS achieved was 3.27p (2008:3.51p), the weighted average number of shares used was 44,702,853. The year closed with 44,993,465 ordinary shares in issue, with 643,702 of these held in Treasury by the Group. 

Cash Flow

At the year end the Group had cash balances of £3.39m (2008:£3.50m) and Net Funds (comprising cash less finance lease creditors) of £1.81m (2008:£1.08m). Operational cash inflow remained strong at £3.52m (2008: £4.06m). The most significant cash outflow being dividends paid of £1.36m (2008: £1.30m).  

Capital Expenditure

The total expenditure for the year was £0.59m (2008:£1.26m). The major item was Software development and computing infrastructure £0.52m. 

Share Capital and Share Options

Third party options over 325,000 shares (0.7% of the total called up share capital) were exercised during the year and were satisfied from treasury. There were no options granted.

During the year the Company purchased 768,702 (1.7% of the total called up share capital) shares to be held in treasury for a consideration of £263,000. The maximum number of shares held by the Company during the year was 643,702 (1.4% of the total called up share capital). The shares are to be held in treasury by the Company with the intention of satisfying future exercise of share options.

Treasury Policies and Financial Risk

Surplus funds are intended to support the Group's short term working capital requirements. These funds are invested through the use of short term deposits and the policy is to maximise returns as well as provide the flexibility required to fund on-going operations. During the year the Board reviewed its treasury policies and took the decision to split the Group's deposit reserves between a number of mainstream banks. It is not the Group's policy to enter into financial derivatives for speculative or trading purposes. 

Interest rate risk, liquidity risk and currency risk

Interest rate risks are limited to the fixed element of finance lease or hire purchase agreements. The Group uses leasing or hire purchase at periods of up to 5 years to finance purchases of some of its assets where it is considered to be a more effective use of funds.

The Group has no material overseas assets or liabilities and thus any currency movements have no material impact.

Alan Q. Roberts 

Finance Director

1 June 2009

  Group Consolidated Income Statement

for the year ended 31 March 2009

	Note			2009	2008
				£000	£000
Revenue	3			14,468	13,479
Changes in inventory of finished goods and work in progress				1	5
Raw materials and consumables used				(4,727)	(4,473)
Gross profit				9,742	9,011
Staff costs				(3,598)	(3,218)
Other operating charges				(2,877)	(2,123)
Depreciation and amortisation				(1,334)	(1,378)
Total expenses				(7,809)	(6,719)
Operating profit				1,933	2,292
Financial income				238	316
Financial expenses				(108)	(187)
Net financing income				130	129
Profit before taxation				2,063	2,421
Taxation	4			(603)	(789)
Profit for the year attributable to equity holders of the Parent				1,460	1,632
Basic earnings per share	5			3.28p	3.64p
Diluted earnings per share	5			3.27p	3.51p

The operating profit for the year arises from the Group's continuing operations.

  Statement of Changes in Equity

Group - year ended 31 March 2009

	Share capital	Share premium	Merger reserve	Retained earnings	Total
	£000	£000	£000	£000	£000
Profit for the year	-	-	-	1,460	1,460
Total recognised income and (expense)	-	-	-	1,460	1,460
Equity settled share based payments	-	-	-	-	-
Tax on equity settled share based payments	-	-	-	-	-
Own shares acquired	-	-	-	(263)	(263)
Shares issued	-	10	-	65	75
Dividends paid	-	-	-	(1,364)	(1,364)
Total movement in shareholders' funds	-	10	-	(102)	(92)
Opening shareholders' funds at 1 April 2008	450	3,871	211	2,626	7,158
Closing shareholders' funds at 31 March 2009	450	3,881	211	2,524	7,066

Group - year ended 31 March 2008

	Share capital	Share premium	Merger reserve	Retained earnings	Total
	£000	£000	£000	£000	£000
Profit for the year	-	-	-	1,632	1,632
Total recognised income and (expense)	-	-	-	1,632	1,632
Dividends	-	-	-	(1,300)	(1,300)
Issue of new shares	3	38	-	-	-
Own shares acquired	-	-	-	(82)	(82)
Equity settled share based payments	-	-	-	71	71
Tax on equity share based payments	-	-	-	(11)	(11)
Total movement in shareholders' funds	3	38	-	310	351
Opening shareholders' funds at 3 April 2007	447	3,833	211	2,316	6,807
Closing shareholders' funds at 31 March 2008	450	3,871	211	2,626	7,158

Group Balance Sheet

At 31 March 2009

		Group
		2009	2008
		£000	£000
Non-current assets
Property, plant and equipment		4,328	5,217
Investments in subsidiaries		-	-
Intangible assets		1,283	1,139
Deferred tax assets		2	25
Other receivables		253	470
Total non-current assets		5,866	6,851
Current assets
Inventories		110	109
Trade and other receivables		3,313	3,210
Cash and cash equivalents		3,391	3,502
Total current assets		6,814	6,821
Total assets		12,680	13,672
Current liabilities
Other interest-bearing loans and borrowings		(689)	(804)
Trade and other payables		(1,887)	(1,759)
Current tax payable		(370)	(377)
Accruals and deferred income		(1,057)	(1,094)
Other liabilities		(165)	(182)
Total current liabilities		(4,168)	(4,216)
Non-current liabilities
Other interest-bearing loans and borrowings		(889)	(1,613)
Deferred tax liabilities		(557)	(685)
Total non-current liabilities		(1,446)	(2,298)
Total liabilities		(5,614)	(6,514)
Net assets		7,066	7,158
Equity attributable to equity holders of the parent
Share capital		450	450
Share premium		3,881	3,871
Merger reserve		211	211
Retained earnings		2,524	2,626
Total equity		7,066	7,158

Group Cash Flow Statements

for year ended 31 March 2009

			Group
			2009		2008
			£000		£000
Cash flows from operating activities
Profit for the year			1,460		1,632
Adjustments for:
Depreciation, amortisation and impairment			1,334		1,378
Financial income			(238)		(316)
Financial expense			108		187
Gain on sale of property, plant and equipment			2		-
Equity settled share-based payment expenses			-		71
Foreign exchange gains			61		75
Taxation			603		789
Operating cash flow before changes in working capital and provisions			3,330		3,816
Decrease in trade and other receivables			114		269
Increase in inventories			(1)		(5)
Increase/(decrease) in trade and other payables			76		(17)
Cash generated from Operations			3,519		4,063
Tax paid			(715)		(344)
Net cash inflow/(outflow) from operating activities			2,804		3,719
Cash flows from investing activities
Proceeds from sale of plant and equipment			9		150
Interest received			177		241
Acquisition of plant and equipment			(70)		(235)
Capitalised development expenditure			(522)		(530)
Dividends received			-		-
Net cash (outflow)/inflow from investing activities			(406)		(374)
Cash flows from financing activities
Proceeds from the issue of share capital			65		41
Repurchase of own shares			(263)		(82)
Interest paid			(108)		(187)
Payment of finance lease liabilities			(839)		(1,165)
Inter company transfers			-		-
Dividends paid			(1,364)		(1,300)
Net cash (outflow)/inflow from financing activities			(2,509)		(2,693)
Net increase/(decrease) in cash and cash equivalents			(111)		652
Exchange losses on cash and cash equivalents			-		(5)
Cash and cash equivalents at start of year			3,502		2,855
Cash and cash equivalents at 31 March			3,391		3,502

Notes

(forming part of the financial statements)

1           Basis of preparation

Printing.com plc (the 'Company') is a company incorporated and domiciled in the UK. 

The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the 'Group').  

The Group financial statements are authorised for issue by the Board of Directors on 1 June 2009.  

The Group financial statements have been prepared by the Directors in accordance with International Financial Reporting Standards as adopted by the EU ('Adopted IFRSs') 

The financial information does not constitute the Company's statutory accounts for the years ended 31 March 2009 or 31 March 2008 (but is derived from those accounts).  Statutory accounts for 2008 have been delivered to the registrar of companies, and those for 2009 will be delivered in due course.  The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and (iii) did not contain statements under section 237 (2) or (3) of the Companies Act of 1985. The statutory accounts for the financial year ended 31 March 2009 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. 

2       Going concern

The Group has considerable financial resources and the number of Franchise outlets continues to grow. This is expected to continue due to the comparatively low level of capital required to set up a franchise under the Printing.com business model. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook. After making enquiries the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly they continue to adopt the going concern basis in preparing the annual report and financial statements.

Further information regarding the Groups business activities together with the factors likely to affect its future development, performance and position is set out in the business review on pages 3 to 9.   

3         Revenue

Segmental analysis

The principal components of revenue are the design and production of publicity and marketing material, and franchise fee income. All of the revenue is in one continuing business segment being the development of the Printing.com model and originates principally in the United Kingdom and Republic of Ireland. 

Analysis by geographical destination

	Revenue				Total Assets				Capital expenditure
	2009		2008		2009		2008		2009		2008
	£000		£000		£000		£000		£000		£000
United Kingdom	13,372		12,738		5,672		6,767		585		1,186
Republic of Ireland	708		684		319		356		-		5
Rest of the world	388		57		112		35		7		68
	14,468		13,479		6,103		7,158		592		1,259

Analysis by type

	2009		2008
	£000		£000
Sale of goods	13,275		12,571
Services rendered	1,105		856
Royalties	88		52
Total revenue	14,468		13,479

4        Taxation

Recognised in the income statement

	2009	2008
	£000	£000
Current tax expense
Current year	742	808
Foreign tax	8	4
Adjustments for prior years	(42)	(290)
	708	522
Deferred tax expense
Origination and reversal of temporary differences	(108)	31
Movement due to change in tax rate	-	(49)
Adjustments for prior years	3	285
Total tax in income statement	603	789

Reconciliation of effective tax rate

	2009	2008
	£000	£000
Profit for the period	2,063	2,421
Total tax expense	(603)	(789)
Profit after taxation	1,460	1,632
Tax using the UK corporation tax rate of 28% (2008: 30%)	578	726
Permanent differences	42	54
Overseas tax losses not recognised	1	4
Effect of equity settled share based payments	-	8
Deferred tax on shares	23	51
Adjustments in respect of prior periods - current tax	(42)	(290)
Adjustments in respect of prior periods - deferred tax	3	285
Movement due to change in tax rate	-	(49)
Total tax expense	603	789

Notes (continued)

5        Earnings per share

The calculations of earnings per share are based on the following profits and numbers of shares.

	2009	2008
	£000	£000
Profit after taxation for the financial year	1,460	1,632

Weighted average number of shares.

	2009	2008
	Number of shares	Number of Shares
For basic earnings per ordinary share	44,485,293	44,892,441
Exercise of share options	216,330	1,654,969
For diluted earnings per ordinary share	44,701,623	46,547,410

6        Dividends

	2009 £000	2008 £000
Final dividends paid in respect of prior year but not recognised as liabilities in that year	896	850
Interim dividends paid in respect of the current year	468	450
Total dividend paid in the year	1,364	1,300

After the balance sheet date dividends of £931,000, 2.10p per qualifying ordinary share (2008: £896,000/2.00p per qualifying ordinary share) were proposed by the Directors. The dividends have not been provided for.

Customer	Region	Town	Post Code
Sign It (Nottm) Ltd	Central England	Beeston, Nottingham	NG9 2AY
Graphic Results	Central England	Belper	DE56 1BA
East Birmingham Store	Central England	Birmingham	B26 3JR
South West Birmingham Store	Central England	Birmingham	B16 9RD
Birmingham Store	Central England	Birmingham	G3 8LZ
Artichoke Design Ltd	Central England	Birmingham	B18 6NN
Vicki Interiors Limited	Central England	Burntwood	WS7 3GL
First Impression	Central England	Buxton, Derbyshire	SK17 9PA
Graphic Results	Central England	Chesterfield	DE56 1TD
Coventry Store	Central England	Coventry	CV2 4BE
ADECS Ltd	Central England	Coventry South	CV4 8HX
Image I.T. Limited	Central England	Daventry	NN11 8RY
Sportwise Marketing Ltd t/a Immediate Design	Central England	Derby	DE1 3QB
Synergy	Central England	Derby - Crewton	DE24 8SR
Multiprint & Embroidery Limited	Central England	Derby - Littleo	DE23 6FP
FSeven Design Solutions	Central England	Digbeth	B9 4AA
Kualo Limited	Central England	Gloucester	GL2 2AT
Hussellworks	Central England	Halesowen	B63 3HR
Clientel Systems Limited	Central England	Kibworth	LE8 0HS
Leicester Store	Central England	Leicester	NG1 6DQ
Datatron Limited	Central England	Lichfield	WS13 6LL
For Colour Ltd	Central England	Lincoln	LN2 4US
Trident Design & Print	Central England	Lutterworth	LE17 4EE
Queensway Print	Central England	Milton Keynes	MK1 1LS
For Colour	Central England	Newark, Nottingham	NG24 1LE
Northampton Store	Central England	Northampton	NN1 5QJ
Custard Creative	Central England	Northampton	NN3 6WL
Nottingham Store	Central England	Nottingham	L2 2HF
Peterborough Store	Central England	Peterborough	PE2 8AN
ITS-Ideas Taking Shape Ltd	Central England	Rugby	CV21 2SD
Boomerang Print Design Ltd	Central England	Solihull	B91 3RT
Runtime Print Ltd	Central England	Telford	TF2 8AJ
Wolverhampton Store	Central England	Wolverhampton	WV1 4BL
Amethyst Consultancy	Central England	Martin, Lincolnshire	LN4 3QH
Oakley media	Central England	Lutterworth, Leciestershire	LE17 4JA
Photprint	Central England	Leek, Staffordshire	ST13 5JH
Red Hot Media	East	Lowestoft	NR33 0AA
Goldengate Productions	East	Suffolk	IP30 9QS
Keith Nolan Limited	Ireland	Athlone	EE1 1EE
Kwik Kopy	Ireland	Ballymena	BT43 6EB
Malik Bond	Ireland	Belfast - South	BT7 2JA
Twist Design	Ireland	County Donegal	EE1 1EE
Dublin Store	Ireland	Dublin	Dublin 2
Trivium Limited	Ireland	Maynooth - Coun	EE1 1EE
Creative State Limited	Ireland	Naas - County K	EE1 1EE
Desktop	Ireland	Omagh	BT78 1DW
Tullow Manufacturing Limited	Ireland	Tullow	EE1 1EE
Thomas Hughes & Sons Ltd	Ireland	Wexford	EE1 1EE
Central London Store	London	Baker Street	BS1 3LZ
Alpha to Omega	London	Beckenham	BR3 3HX
Plug and Play Design	London	Bramley	GU6 8JJ
Fireworks Design and Print	London	Catford	FK9 5GQ
Blank Canvas Design & Print	London	Chigwell, Essex	IG7 5PD
DNA Creative	London	Clapham	SW11 1TH
City & Clerkenwell Store	London	Clerkenwell	EC1M 5QA
Print Express	London	Colindale	NW9 5DL
Last Print LLP	London	Docklands E16	E14 0JY
Ealing Store	London	Ealing	W13 8SB
0800 Promote Ltd	London	Finchley	N3 1TR
Creekside Press	London	Greenwich	SE10 9QX
Guildford Store	London	Guildford	GU2 4BE
Hampstead Store	London	Hampstead	NW1 6UY
Colour Division	London	Hampstead	NW6 1SD
Digipix Ilford	London	Ilford	IG1 4DU
Envisualise Ltd	London	Kingston	KT2 6LX
London Office Services	London	London	W1G 8JR
WestEast Desgn and Print	London	Hammersmith	W6 9NH
1st Creative	London	London SE1	SE1 3ER
Expocentric Communication Ctrs	London	Mayfair	W1S 4LW
Endgold Ltd	London	Nottinghill	W11 3HT
Orpington Store	London	Orpington	BR6 0JY
Cre8Business Image	London	Potters Bar	EN6 5AS
Reading Store	London	Reading	RG1 4QA
Ditto Office Services Ltd	London	Sevenoaks	TN13 1AS
London Print Compamy	London	Shaftesbury Avenue	WC2H 8EB
DNA Solutions UK Limited	London	Slough	SL1 4JG
Promoworx	London	South Woodford E8	E18 2QL
Toppers Print & Design Ltd	London	Stevenage	SG1 3HR
Cloudmire Limiter	London	Swiss Cottage	NW3 6JP
Kink Design	London	Thornton Heath	EC2A 3LT
Wernham Printers Ltd	London	Tottenham	N17 6QD
FiveFish Limited	London	Twickenham	TW12 1JT
Printroomsoho Ltd	London	Wardour Street	W1F 0TS
Watford Store	London	Watford	WD17 1RA
Medialink World	London	Whtechapel	E1 1HL
Creographics	London	Wimbledon	SW19 8TY
Propulsion	London	Watford	WD24 5BJ
Latitude Graphic Design	London	Mortlake	SW14 8JN
Positive Print and Design	London	Chelmsford, Essex	CM1 1PE
BDI	London	Beaconsfield, Essex	HP9 2PE
Centrepoint Print	Midlands	Birmingham - Erdington	B23 6LR
Colour Graphics	Midlands	Burntwood	WS7 3GL
Cambridge Graphics	Midlands	Great Cambourne	CB23 5BH
RDS Networks	Midlands	Hall Green	B28 8AS
Pixel Design	Midlands	Kidderminster	DY11 6XB
Kaleidoscope Press Ltd	Midlands	Leamington Spa	CV33 9GX
Ozmedia Print Solutions	Midlands	Loughborough	LE11 5AA
Pewter Design	Midlands	Market Harborough	LE16 7DS
Interactive Marketing	Midlands	Meregreen	B1 3ND
St Ives Quickprint Ltd.	Midlands	St Ives	PE27 3WS
Rhubarb & Custard	Midlands	Sutton Coldfield	B72 1NE
Modus Print	Midlands	Worcester	WR1 1JZ
Raphael Design	Midlands	Lichfield	WS14 9DX
Coastal Colour	North East	Amble, Northumberland	NE65 0BZ
Documentshop.com limited	North East	Barnsley	S70 2HG
Smart Card International Limited	North East	Beverley	HU17 0TB
FRO Print	North East	Birtley, County Durham	DH3 2QG
Fountains Associates Limited	North East	Bishop Auckland	DL14 7EL
Dark Matter Design	North East	Bishop Auckland	DL14 7EL
Bradford Store	North East	Bradford	BD1 3BA
John Siddall (Printers) Ltd	North East	Cleckheaton	BD19 3JL
Total Graphics	North East	Darlington	TS18 3TQ
Doncaster Store	North East	Doncaster	DN1 1HT
Tigher Limited	North East	Durham	DH1 1RF
Washington Direct Mail	North East	Gateshead	NE11 0SH
Feel Design	North East	Goldsborough	HG5 8NJ
Loyalty Matters Ltd	North East	Harrogate	HG3 2XA
Winny Limited	North East	Hartlepool	TS25 5TG
Peter Matthews Limited	North East	Huddersfield	HD8 0NQ
Pink Custard Design Ltd	North East	Hull	HU1 1PS
Ryedale Printing Works Ltd	North East	Kirbymoorside	YO62 6YB
Leeds Store	North East	Leeds	LS1 3DL
The Factory Partnership Ltd	North East	Leeds	LS12 2DS
Ideas Start Here Ltd	North East	Leeds	LS8 2HU
Middlesbrough Store	North East	Middlesbrough	TS1 1LY
Mix Marketing Ltd	North East	Mirfield	WF14 8AH
Stait Photography	North East	Morpeth	NE61 1HE
Newcastle Store	North East	Newcastle	B5 4JL
Direct Business Products	North East	Newcastle	NE12 9UP
Via Creative Consultants Ltd	North East	Redcar	TS10 5SH
Bluprint	North East	Rotheram	S60 2LZ
Desk Top Publishing Ltd	North East	Scunthorpe	DN15 6LJ
Sheffield Store	North East	Sheffield	S1 4GF
Runway 24	North East	Sheffield - Hillsborough	S6 4GH
Brightstar Creative	North East	Sheffield - West	S2 4QZ
Rare Creative	North East	Sheffield North	S3 8GG
Marckell Business Solutions Ltd	North East	South Shields	NE33 1TL
Stuart Lockerbie T/A Maskerade.	North East	Sunderland	SR2 7PR
G3 Advertising	North East	Thirsk	Y07 1HL
Goweb Print Ltd	North East	Wakefield	WF2 9BL
Colour Box Design Company Ltd	North East	York	YO24 1AR
Thw Brackenhill Group	North East	York East	YO41 4DF
ER Design & Print Service Ltd	North West	Alsager	CW2 7AX
Ardwick - One21 Designs	North West	Ardwick	M12 6JH
Rhino Design	North West	Ashton-under-Lyne	OL6 6XJ
Gud Design Ltd	North West	Birkenhead - Ea	CH41 1EU
Fluid Creative	North West	Blackburn	BB2 1AR
Granthams	North West	Blackpool	FY1 4PE
Print Hub Design	North West	Bolton	BL1 3QN
Digeridoo	North West	Bolton	BL7 9NY
Moorish Idol	North West	Bolton - South	BL3 5AB
Wild Thang	North West	Bootle	L20 8LQ
Printing Matrix	North West	Brampton, Carlisle	CA8 1SW
Swantoon	North West	Burnley	BB10 2TP
Fluidmedia.net Ltd	North West	Bury	BL9 0LL
Brightspark Design & Print	North West	Carlisle	CA2 7AJ
RAS Limited	North West	Chester	CH3 5AG
McVery's	North West	Chorley	PR7 2AA
William Seabrook Associates Ltd	North West	Chorlton - Manchester	M21 8UP
Kingfisher Print	North West	Clayton-le-Moors	BB5 5JQ
Northstar Creative Design & Advertising LLP	North West	Colne	BB8 9BD
Mail Boxes Etc	North West	Didsbury	M20 6UG
ScissorsPaperStone	North West	Eccles	M30 8GH
Creativo	North West	Ellesmere Port	CH65 4FW
First Impression Limited	North West	Glossop	SK13 8ER
Lancaster Store	North West	Lancaster	LA1 1XN
DCT Marketing	North West	Lancaster - Cleveleys	FY5 2DB
Liverpool Store	North West	Liverpool	NE1 4AE
Plinkfizz Limited	North West	Longton	ST3 4HY
Colourful Thinking	North West	Lytham St Annes, Lancashire	FY8 1TB
Infinity Creative	North West	Macclesfield	SK11 6HN
North Manchester Store	North West	Manchester	M4 5AG
Manchester Store	North West	Manchester	LE1 1LB
Alert 2 Media	North West	Manchester	M1 1DZ
Chilli Cactus Limited	North West	Manchester	SK9 1RA
The Agency Creative limited	North West	Manchester	M17 1DZ
Creation Publicity Ltd	North West	Manchester	M17 1DZ
Print Design Warehouse Ltd	North West	Marple	SK8 1DW
Red Fred Limited	North West	Nantwich	CW5 6PQ
SmartStudios	North West	North Manchester	M4 4DE
The Creative Hub (UK) Ltd	North West	Ormskirk - Live	L39 3AJ
Granthams	North West	Preston	PR1 2UQ
Daleprint	North West	Rochdale	OL16 2AW
Chris Thew Design & Print Limited	North West	Rossendale	BB4 8EQ
Hashem Media	North West	Sale	M33 6RH
Impressions Design & Print Ltd	North West	Sandbach - Ches	CW11 1DA
I Design	North West	Southport	PR9 0NS
Masterprint (NW) Ltd	North West	St Helens	WA10 1DH
Davora Limited	North West	Stockport North	SK4 4HY
Impact Digital	North West	Timperley	WA14 1PJ
The Hub	North West	Trafford Park	M17 1FG
AF Reprographic	North West	Tyldesley	M29 8DS
Warrington Store	North West	Warrington	WA1 1EN
Printel UK Ltd	North West	Widnes	WA8 9LG
Mooney Media Ltd	Northern Ireland	County Down	BT32 3QD
Go Fish Design & Print	Northern Ireland	Lisburn	BT28 1AG
Xpress Printing	Northern Ireland	Newtonabbey	BT36 4PU
Native Print	Noth East	Newcastle - Heaton	NE6 5HL
The Business Boutique UK Ltd	Scotland	Aberdeen	AB24 5BW
Evosom Limited	Scotland	Aberdeen	AB24 5AX
Steptoe Creative Limited	Scotland	Ayr - Scotland	EE1 1EE
Dundee Store	Scotland	Dundee	M3 4EN
Edinburgh Store	Scotland	Edinburgh	S1 4GF
Elevate You Limited	Scotland	Edinburgh	EH11 4EP
Digisnaps Ltd	Scotland	Edinburgh	EH2 2PJ
Glasgow Store	Scotland	Glasgow	NW3 5HS
SPD Print Solutions Ltd	Scotland	Glasgow	G40 4DU
Revolve Design & Print	Scotland	Glasgow - City	G4 0QR
J&J Cornfield Partnership	Scotland	Hamilton	ML3 6DS
Velocity Design	Scotland	Inverness	IV4 7EG
Republique Limited	Scotland	Linlithgow	BN3 3LL
Delta Design Ltd	Scotland	Livingstone	EH54 8PT
Colorgrafix	Scotland	Louth	LN11 9AA
DPI Print	Scotland	New House- Glasgow	ML1 5RX
Glasgow Print	Scotland	North Glasgow	G20 9AY
Creative Concept UK Ltd	Scotland	Paisley	PA1 1TX
South Glasgow Store	Scotland	South Glasgow	G5 9RR
Tangerine Industries Ltd	Scotland	Stirling	FK8 1JW
Idesign2	Scotland	Falkirk	FK3 8XS
Brighton Store	South	Brighton	BN1 4JB
Talon Graphics	South	Brighton	CR7 8DD
Tudor Printers Limited	South	Worthing	BN11 1UY
Ashford Store	South East	Ashford	TN24 8UU
Copyzone	South East	Bishop Stortford	CM23 3DY
Cambridge Store	South East	Cambridge	CB3 0AX
Think IMG Ltd	South East	Canterbury	CT1 2NR
Studio Direct (Printing) Ltd	South East	Chelmsford	CM2 6JP
Inprint	South East	Colchester	CO1 1PB
TRS Graphics Ltd	South East	Croydon	CR0 1QR
Jellybean Graphics	South East	Croydon	CR9 6YJ
Ouch Creative	South East	Dereham	NR19 2AW
Print Link	South East	Diss	IP22 4LB
Dorking Print Solutions Ltd	South East	Dorking	RH4 2ES
Patient Excel	South East	Dunstable	LU7 1EN
Accomplice Limited	South East	Hailsham	BN27 1AU
JBS Print & Design	South East	Leatherhead	KT22 0AN
Luton Store	South East	Luton	LU1 2PL
Grayscale Design	South East	Maidenhead East	SL6 1HZ
Colourwave Printers	South East	Maidstone	ME16 0JZ
Norwich Store	South East	Norwich	NR1 1PL
Colourwave	South East	Ramsgate	CT11 8NT
Felix Ltd	South East	Rochester	ME2 4HZ
Bourne Graphics	South East	Saltdean, Sussex	BN2 8PA
World Wide Service	South East	Sandy, Bedfordshire	SG19 1AG
Colour Creatives Limited	South East	Sidcup - Kent	DA14 6ES
Head Consulting	South East	Somerton	BA16 0HA
Grow Marketing Limited	South East	Whitstable	CT3 4JH
Woking Print & Design	South East	Woking	GU21 7RS
Bournemouth Store	South West	Bournemouth	BH11 8PN
Proactive	South West	Bournmouth North	BH8 8EZ
Bristol Store	South West	Bristol	EH3 9LY
Imageglossy Ltd	South West	Christchurch	BH23 1QD
Exeter Store	South West	Exeter	EX4 3AJ
SDM Productions UK	South West	Fareham, Hampshire	PO17 5PG
Paw Print Design	South West	Gosport	PO15 7HH
Bluebird Graphics	South West	Lyme Regis	DT7 3LS
Wessex Direct Ltd	South West	Minehead	TA24 5BJ
Full Colour Store	South West	Newton Abbott	SW6 6SE
Plymouth Store	South West	Plymouth	PL4 0AU
Elixus	South West	Portsmouth South	PO2 8FA
Neil Cheesewright T/A Chalk and Cheese Design	South West	Ruislip	HA4 6HH
Southampton Store	South West	Southampton	SO15 2AE
Wessex Direct Ltd	South West	Taunton	TA2 6BB
Wessex MAlthouse Direct Ltd	South West	Torquay	TQ1 3AW
DV8media	South West	Totnes	PL1 3JB
Whitman Design & Print Limited	South West	Truro	TR1 2HE
Anneset Productions	South West	Weston-Super-Mare	BS23 3DE
Starre Design	South West	Seaton, Exeter	EX12 2LS
Blue Poppy	South West	Ham Green, Bristol	BS20 0DD
Fields Copy Shop	South West	Dover	CT16 1PW
Seemon Limited	South West	Bath	BA1 2FJ
Cardiff Store	Wales	Cardiff	CF5 1JF
Australian Welsh	Wales	Cardiff	CF14 3JP
Macs Creative	Wales	Colwyn Bay	LL29 7PA
West Wales Design	Wales	Pembroke	SA71 4JS
Colourbox	Wales	Swansea	SA1 5TY
Parkmill Design	Wales	Swansea - Gower	SA3 2EH

 

END

 

 

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