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For your average printer, report and accounts (R&A) contracts were once a reliable addition to the order book; the work was consistent, the clients high-profile and demand a safe bet. The reality now is somewhat different.

Since 2005, when the government announced it would relax regulations on companies’ paper-based communications with shareholders under the company Law Reform Bill, meaning public limited firms would no longer be obliged to print hard copies of financial statements, the question remains as to how this will impact on the future of R&A printers.

The new provisions Bill came into effect in January, and the industry is already noticing some impact, but a surprising number insist that a mountain has been made out of a molehill.

Steady swing
A recent investigation conducted by CMM Group found no major swing towards electronic reports is going to take place until 2008, by which time the proportion of printed to electronic reporting is expected to still be as much as 72% print.

Elsewhere, the sector is going through a number of other changes, relating to the new wave of environmental consciousness, increasing demand on lead times and cost-cutting.

James McKie, managing director of print management consultant Perdiccas, says that last year, 72% of reports had the same paper, compared to 64% in 2004, when it was more common to use better quality paper for four-colour pages. Similarly, the average gsm has dropped since 2004 from 160gsm to 146gsm.
But cost is not the only factor affecting clients’ demands. McKie claims that trends in design are also behind the 53% increase (to 77%) of matt covers since 2004.

But the environment is undoubtedly the most influential driver behind uncoated products, sealed by the government’s introduction of corporate social responsibility (CSR). Companies must not only adjust their impact on the environment, but prove as much in reports – and printers must respond. According to McKie, the number of reports now using accredited paper has increased by 59% since 2005.

Charlie Fenby, corporate and commercial sales director at Butler & Tanner, says: “If anything, the days of high specification reports ended a few years ago. Now customers are striving to be greener with uncoated paper and no lamination.”

The introduction of CSR has also impacted pagination, with more pages dedicated to fulfilling its criteria. According to McKie, the average number of pages per annual report last year increased from 92pp to 108pp. Last month, the Financial Times reported that HSBC’s latest 454pp document had caused “frustration” among executives, shareholders... and postmen.

Considering that particular uproar, and the general consensus that firms advocate online reports, one could argue the larger reports become, the closer they are to extinction. But for the moment, high paginations can, to a degree, compensate for the fall in print runs. Greenaways sales director John Mercer says: “Although there aren’t as many turns on the press, our experience at the front-end means it’s still an attractive market.”

But Mercer concedes the market is also more demanding in terms of turnaround speed.

“It’s still a sector printers like to be in, but now it is not to be entered into lightly. It’s not just ink-on-paper, but an entire project – from mail merging to personalisation.”

Richard Owers, sales and marketing director at Beacon Press, agrees: “It used to be your average brochure printer also did R&A, but a lot of smaller printers are finding it harder to compete and there are less new players coming into the sector.”

Embrace change
Those already there, and large enough to take the pressure, still need to embrace new ideas to stay competitive, says Perdiccas’ McKie. Apart from the odd digital job for announcements to the stockmarket and so on, most R&A is still printed litho, but McKie believes digital could be the way forward.

“It could go along three routes: litho, digital or the internet, which cuts out both. My view is that printed reports will decline and printers who want to survive need to be innovative.”

But a digital revolution in this sector is far from being realised. Fenby explains: “Personalisation has not been brought up as a requirement by our clients, although we do have the facilities to supply it. It is highly possible we'll be heading that way in the future, considering the way variable data is growing.”

Mercer agrees: “In the future, print-on-demand could be the trend, and that’s something we are aware of. Registrars already have access to PDFs for shareholders who request a full printed report in digital colour.”

Beacon’s Owers says clients have yet to show enthusiasm for personalisation. “No one seems to be interested in taking it further. The data is there, but using it might make shareholders feel uncomfortable.”

Most printers do agree print will be impacted by the legislation, but to what extent is hard to gauge. As Bob Hodgson, chief executive of Greenaways’ parent firm Ormolu Group says: “That’s like asking what is the future of print.”

He adds: “Print goes on because e-services still offer customers the option to print a hard copy – and they do.”