Printing.com improved its interim profits despite the tough economic conditions.
Pre-tax profits rose from £968,000 to £1.02m on an 11% increase in revenues to £7.18m in the six months to September 2008.
Total retail sales for Printing.com increased 9% to £13.2m. Like-for-like sales grew 16.5% - these cover territory franchises that have been trading for at least three years.
Small businesses are the core customer base. Margins fell because of an increased number of offers to stimulate demand. Bad debt provisions were more than £120,000 in the period.
Demand from estate agents and recruitment companies is weak but smaller printers are likely to be hit hardest and some could go under. Printing.com hopes to improve its market share.
At the end of September 2008, Printing.com had six company owned outlets, 42 territory franchises and 223 small bolt-on franchises. Plymouth and Brighton have been taken back from the franchisees and will be resold when the market improves.
Overseas expansion is continuing slowly. The New Zealand franchise is a still a small contributor and so is France. Printing.com will probably open a couple of stores in France in order to increase the visibility of the brand.
A new master licence has been signed and the new territory will be announced next January when the franchisee starts its marketing. Part of the licence fee has already been paid.
The shares rose 0.5p to 32.5p each, which values Printing.com at £14.4m.
Hardman forecasts a small decline in full year profit from £2.4m to £2.3m – mainly down to an increase in depreciation and amortisation. The research company is also being cautious about bad debts. That puts the shares on just over nine times prospective earnings.
The interim dividend rose 5% to 1.05p a share. The total dividend for the year is forecast at 3.1p a share, which is equivalent to a yield of 9.5%.
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