Grafenia reports on first half

Jo Francis
Thursday, November 24, 2022

Grafenia has posted its first results that reflect the sale of its manufacturing operations.

Grafenia's brands include Nettl and Marqetspace
Grafenia's brands include Nettl and Marqetspace

In the half-year to 30 September, sales on continuing operations were up 13.2% to £4.97m, while the operating loss increased to £493,000 from £228,000.  

In May Grafenia sold its Works Manchester production hub to Rymack Sign Solutions in a £3m-plus deal. Rymack trades as PFI Group. 

Grafenia chairman Jan Mohr and acting CEO Gavin Cockerill stated: “Our teams have worked hard to ensure that transition has been smooth. We'd like to thank everyone involved for successfully managing the process. Simplifying our business and completing the transition to one focused on software and systems.”

Along with the transition of Works Manchester to its new owners PFI, Grafenia has continued to add new Works Makers to widen the product range available to its partners, and sales at this part of the business increased by 31% to £1.53m.

Despite the reduction in total operating costs due to the Works Manchester sale, staff costs on continuing operations increased to £1.18m from £840,000 due to inflationary pressures, and there was also an increase in other operating expenses. 

Grafenia acquired e-commerce specialist Vertical Plus in October and remains on the lookout for further buys. 

At the period end it had cash of just over £5m following the bond issue on 27 September to fund the Vertical Plus buy, and debt of £8.29m (2021: £7.16m). 

“We've improved the revenue performance of Nettl Systems. Our investment in Software Circle is beginning to bear fruit and we continue to make progress building the best operating model for our new focus,” the duo stated. 

“Trading continues to outperform the same period last year. November looks set to continue that trend. It is difficult to foresee how business confidence will be impacted by the economic climate. However, sales are in line with current internal forecasts.”

Regarding the outlook, Grafenia bosses reiterated the medium-term goal of an EBITDA margin of 10%-15%.

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