Print group hit by increased costs but ‘cautiously optimistic’ for the year

Manchester-based print group, Grafenia, said it is “cautiously optimistic” about the forthcoming year, in a pre-close statement and trading update today (April 6).

It revealed sales have continued to improve since its last update on November 22, and each month has traded better than the previous year as pandemic restrictions were lifted.

December and January were affected by uncertainty over the reintroduction of restrictions leading to the cancellation of some exhibitions and events and the consequent hit on business confidence.

However, March has seen a significant bounce back as many events have returned or been rescheduled for the summer. Total sales in March were the highest since November 2019, before the pandemic.

The group said it expects to end its full year with sales or more than £12m, compared with £9.65m in 2021.

It acknowledged that while these aren’t back to pre-pandemic levels, its cost base is significantly different and the breakeven point much lower.

Grafenia generated positive EBITDA in eight of the 12 months. It said after negative EBITDA in 2021, it expects full year 2022 EBITDA will be positive, and it anticipates a smaller pre-tax loss than the previous year.

Cash at March 31, 2022, was £1.5m compared with £2.7m a year ago.

The business said, like most others, it has faced cost rises across the board. Paper has increased by 30-50%, due to distribution costs, shortages and energy.
Grafenia has increased its prices three times in 2022 to reflect this, but added that fuel and energy prices remain at high levels. It said it continues to track competitor pricing.

Overall, it said: “We’re cautiously optimistic about the upcoming year.

“We remain focused on achieving our mid-term goal of 10-15% EBITDA. Our search for software businesses continues. We hope to update the market with more detailed progress shortly.”