Print group’s increased margins helps sharpen performance

Print group Grafenia believes it will “continue to improve” its profitability after significantly reducing its cost base through the pandemic.

The Trafford Park-based company said it is now a “leaner organisation”, after cutting more than one-in-five jobs and refocusing the business priorities.

It is now split into its production operations, Works Manchester, and its software and licensing division, Nettl Systems, which it believes provides greater transparency and “release entrepreneurial energy in our teams”.

“It was a challenging year but we are emerging as a more focussed and competitive business,” said chairman Jan-Hendrik Mohr.

Sales were down 38%, to £9.8m, but more positively losses also reduced by 38%, to £2.1m.

This was achieved by a six-percentage-point increase in its profit margin that was helped by a shift in product mix towards more profitable licence and subscription fees.

Mohr said: “The largest driver has been an intense focus on reducing operating cost in the business, making processes more efficient and reducing team sizes.

“When we model out our cost base from last year it gives us confidence that, with modest increases in revenue, profitability will continue to improve. That should bring us closer to reaching the mid-term objective of 10-15% EBITDA we believe this business can achieve in future years, once activity fully recovers post-Covid.”

He added: “Increasingly, I believe that the major sources of value in our business are the products we sell on a recurring and ‘software-like’ basis.”