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Printing.com

  • BY: Andrew Hore |
  • POSTED: 08/11/2010 |

Printing.com is buying a similar Netherlands-based print marketing business for €2m in cash and shares.

Media Facility Group BV increased its sales from €2.3m in 2008 to €6.7m in 2009, when it made a small profit. Managing director Hans Scheffer will join the Printing.com board.

The consideration is half in shares at 33.2p a share and half in cash and convertible loan notes – convertible at 33.2p a share.

MFG does not do any of its own printing, which cost €4m last year. Some of this printing could be transferred to Printing.com’s facility in Manchester.

Printing.com is maintaining its interim dividend of 1.05p a share even though it is not covered by earnings. There is still £1.61m in the bank after paying out £932,000 on last year’s final dividend of 2.1p a share. MFG is a cash generative business and even after its acquisition Printimg.com will have net cash. There is no requirement for capital investment so the business can generate significant amounts of cash.

There was a sharp difference in trading between the South East and the rest of the UK, with the former 5.9% ahead and the latter down 4.5%. That meant that UK sales were 2.6% lower. Promotions have helped to retain business but margins have been eroded. Current trading is following the same pattern.

Printing.com’s revenue was flat at £7.1m in the six months to September 2010. Pre-tax profit fell from £870,000 to £619,000 after some initial deal costs for the MFG acquisition.

At 36.5p a share, down 1.5p, Printing.com is valued at £16.2m.

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