Walstead reports progress but says further consolidation is needed
By Jo Francis Monday, 02 July 2012
Walstead Investments chairman Mark Scanlon has described competitors in the web offset market as "totally supine", while unveiling full-year results for 2011.
The Wyndeham Group owner has undergone a year of restructuring and rationalisation of its print platform, including the closure of its Impact, Apple, and Plymouth factories.
Scanlon said Walstead was "single-handedly" consolidating the commercial web offset sector, while key competitors had been "totally supine".
"There’s another step to go, there needs to be another deal in the market between the larger players," he stated. "In a declining market our energies are going into consolidating and generating cashflow to pay down debt."
He said Polestar’s mooted web offset supersite plans "would be a good idea if the market was growing."
Sales in the year to 31 December, including a nine month contribution from the St Ives Web business acquired in April 2011, were up from £83m to £128m. EBITDA (earnings before interest, taxes, depreciation and amortisation) jumped from £1.4m to £6.9m as Walstead’s cost reduction actions and focus on profitable contracts began to bear fruit.
Scanlon said the group had turned down or declined to pitch for commercial work because of unacceptable prices: "We are not chasing turnover, we are chasing margin," he said, adding that trading had shown further improvement in the first five months of 2012.
Restructuring and depreciation charges of £19.2m, along with a book loss of £7.7m on the disposal of fixed assets, resulted in a bottom-line loss of £19.5m. Staff numbers have been reduced from a high of 1,501 to 1,145.
Scanlon also highlighted the fact that the group is also paying down its debt, after taking out a three-year £41.6m facility with RBS at the time of the St Ives deal. Net debt with RBS at the year-end was £28.5m. "RBS are very happy with us," he said.
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