Less demand for Printing.com

PRINTING.COM expects to perform below expectations this year as fewer businesses are calling on it to provide advertising material.

Despite a 9% increase in trading volumes in October, sales have since tailed off according to a trading update. Shares dropped 4.5p, or 17%, to 22p in early trading.

In November and December the company saw like-for-like sales slip 3% as economic uncertainty hit client confidence.

In a statement it said: “Some operational margin has been eroded and volumes are slightly lower than for the corresponding period in the previous year. Consequently we believe the outturn for the year is likely to be slightly below market expectations.”

The Manchester-based firm is particularly exposed as 90% of its work is advertising material.

To counter the slump it said it had put £125,000 into helping its franchisees’ promotional work, a move which has so-far paid dividends – new clients were up 10% this month.

Printing.com has three routes to market; franchised stores, bolt-ons and company owned outlets. Around half of its volumes in the UK and Ireland come from bolt-ons and some of these businesses are also experiencing lower revenues.

The company said it would seek to transfer struggling bolt-on franchises and was confident, “notwithstanding some ‘churn'” that the estate will continue to expand in the second half. It is now planning the launch of the franchise in the American states of Florida and Georgia.

Printing.com insisted its balance sheet remains strong and it has “significant” cash and net funds. In the year to September 30 the group posted a modest 5.2% hike in pre-tax profits to £1.02m, while turnover increased by 8.7% to £13.17m.

The company owns around six stores and has about 40 held by franchisees and some 220 bolt-ons.