Speaking at a supplier briefing this week, chief executive David Holland said the group had also won a significant amount of new work during the period, but "market shrinkage and price attrition" had offset the improvement in market share.
Despite not being able to push through the hoped-for price increases, Holland said large publishers were wary of further contraction in the print supplier base: "Major publishers have been more responsible in terms of pricing than for a number of years," he said, and clients were accepting the need to contribute to the printer’s rising input prices.
Although 68% of the firm’s work is now contractual fill, the group is also active in the commercial spot market, which was described as "a price war".
Group sales in the year to 31 May 2012 were down slightly at £67.8m (2011: £68.5m), while gross profit jumped 17% to £12.5m and operating losses were slashed by 61% to £2.7m. The bottom line loss was £4.7m, down 52%.
Group finance director Mike Edwards said that a huge amount of work had been done across-the-board to reduce the company’s overall cost base. "We’re not the finished article yet, but we’re making the steps we need to take," he said.
The results include a £500,000 pension charge and £1.2m in restructuring costs. £4.7m of finance debt was repaid.
Holland said that among the so-called ‘big three’ in web offset printing comprising Polestar, Walstead and BGP "only BGP is reducing its losses".
"We are gaining market share and our losses are reducing significantly," he stated, while expectations of the group eliminating its losses altogether have been pushed to next year, pending new contract wins. "I'm not going to be a hostage to fortune. Break-even is more likely to be during 2013 than in the 2013 financial year," Holland told PrintWeek.
Sales at BGP were flat at £57.2m, while the pre-tax loss at the Bicester web offset printer reduced by 51% to £4.3m.
Sheetfed operation Stones effectively broke-even on sales down 8.3% at £15.2m. Further investment for the facility, incorporating ultra-fast MBO folders from Friedheim International, is planned for later this year.
Owner Sir John Madejski provided £5.2m in funding for further investment including a new Ferag finishing line at BGP and a 12-colour Heidelberg Speedmaster for Stones, which came from the failed Pindar Preston site.
The group is currently in the running for a number of up-for-review magazine and directory contracts, which Holland said could potentially move to the company in the New Year. "We are on budget for this current year, the main thing is how much we win for January. We are looking at some chunky contracts," Holland said. "The quality magazine customer base is gradually moving in our direction," he added, citing work on glossy titles for Hearst and Condé Nast among the key wins.
In February the group’s employees voted overwhelmingly in favour of a 13.5% pay cut, although this was only in place for two months of the financial year just reported.