Struggling printing firm issues profit warning

GRAFENIA, the AIM-listed print and website design firm previously called printing.com, has issued a profit warning in its latest trading update.

The Trafford Park, Manchester company, which offloaded its Dutch subsidiary,Grafenia BV  for a cash consideration of €2.35m in November after parting company with its long-serving chief executive Tony Rafferty, said trading has been “more challenging” in its domestic channels.

“Our markets have never been more competitive, with established players, aggressive pricing from new European entrants and domestic commercial printers diversifying into the trade print sector,” a company statement said.

“We are continuing to experience downward price pressure, which has intensified in the second half of the financial year. To combat this, we have increased our promotional activity, incentives and selective discounting.

“Following the disposal of our Dutch operations, the board undertook a strategic and operational review of the business to reduce costs.

“We have renegotiated or ended certain supplier contracts, closed an underperforming store and reduced head count.  However, we will not realise the full benefit of these savings until the first half of the next financial year.

“As a result of this and the challenging trading conditions, it is the board’s view that our full year results will be significantly below current market expectations.”

Meanwhile, the board has confirmed the appointment of Peter Gunning as chief executive on a permanent basis.