Grafenia plc Period End Trading Update and Notice of Results (5083M)
October 14 2016 - 2:00AM
UK Regulatory
TIDMGRA
RNS Number : 5083M
Grafenia plc
14 October 2016
Grafenia plc
("Grafenia" or the "Company")
Period End Trading Update and Notice of Results
Grafenia is pleased to provide the following update ahead of the
announcement of its Interim Results for the six months ended 30(th)
September 2016. In our AGM update on 5(th) August 2016, we stated
that trading in July had been below last year's level. August
continued to be difficult and again was below the same period last
year. However, sales in September improved significantly, although
not to budgeted levels. Whilst October has started encouragingly,
we remain cautious.
Competition in the trade print sector remains fierce. We have
completed a significant project to realign pricing of our core
product range and position it competitively in the marketplace.
This realignment of pricing represents a significant investment,
which the Board believe is necessary to underpin future growth of
our Branded Networks. Our proposition has shifted from multiple,
heavily discounted offers, to simpler everyday low pricing across
the range. Our emphasis is on driving volume to our most popular
products and maximising production efficiency to offset margin
erosion.
The price reductions benefit our clients, Company owned Studios
and our Brand Partners. In the first half, the volume of orders we
produced in the UK and Ireland increased by 14%, compared to the
same period last year. This demonstrates that, equipped with a more
competitively priced product range, our Partners are winning more
orders.
Consequently our refreshed printing.com subscription model has
continued to attract new Partners. We have added 20 new
printing.com Partners in the first half and have a strong pipeline
of potential new locations.
Nettl, our neighbourhood web studio formula for graphic
professionals has gained further traction and we now have 80
Partners open or trading. We expect to grow the network further,
partly from the upgrade of existing printing.com Partners, but
increasingly from our Marqetspace client base.
On 3(rd) October 2016, we relocated our existing Company-owned
Nettl Studio in Birmingham to a new site. This is a new pilot
"Business Store" format, which combines the sale of ecommerce,
websites, print and displays, together with meeting space for local
businesses. Our vision is to build a 'department store' for SMEs,
where they can touch promotional products and talk to us about
growing their businesses. Many product line extensions are
plausible and we will experiment and test this format.
During September, Marqetspace, our online trade channel for
graphic professionals, set new records for the number of orders
processed, average order value and the volume of ink-on-fabric
product sold. Marqetspace continues to be an important source of
new Brand Partners for us.
The Board has continued to evaluate different options to
progress the acquisition strategy. While the Board remains
opportunistic, it is prioritising acquisitions of relatively small
businesses that would be complementary to Grafenia's core
operations. The Company is currently in early stage talks with
several potential opportunities and will update the market as
appropriate.
Whilst trading immediately following the EU referendum was
difficult, the improvement since the summer and the encouraging
increase in the number of Nettl and printing.com Brand Partners,
means that, provided trading continues to improve, market
expectations remain achievable.
The Interim Results for the six month period ended 30 September
2016 are expected to be announced on Tuesday 8 November 2016.
For further information:
Grafenia plc
Peter Gunning (CEO) 07973 191 632
Alan Roberts (Finance
Director) 0161 848 5713
N+1 Singer (Nominated
Adviser)
Richard Lindley / James
White 0207 496 3000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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