Hampton in UK Subscription Plus first
Thursday, July 23, 2020
Hampton Printing (Bristol) has become the first UK printer to finance a new press through Heidelberg’s Subscription Plus 'pay per sheet' model and is set to install the new Speedmaster XL 106 next month as it looks to its next stage of growth.
“I’ve been here 35 years and with the MBO three-and-a-half years ago, we had been looking at the presses,” said Hampton managing director Mike Malpas.
The multi-award winning business’s clients include luxury car marques, fashion and lifestyle brands, and luxury retailers and Malpas said the focus wasn’t on having the fastest presses, it was about investing in the technology that offered, in his opinion, the highest quality.
“The technology on the [Heidelberg] machines is the best in the world and helps us, with our creative approach, to be more than a straightforward printer.”
The high-end printer will use the new highly specified six-colour plus coat press to replace two presses: a 14-year-old six-colour Speedmaster XL 105 with coater and a six-year-old Speedmaster XL 75 plus coater.
The sale of the two presses will effectively clear the 50-staff firm’s borrowings, Malpas said.
The new B1 press will join an existing, five-year-old six-colour XL 105 plus coater with Inpress Control. The XL 106 is being delivered to Hampton’s purpose-built, 3,000sqm factory on 5 August, with the Heidelberg subscription plan kicking in when it goes into production in September.
Hampton’s bespoke five-year subscription deal covers the new press only, and encompasses its Prinect software, press consumables, from inks and coatings to blankets and chemicals, and service support including service parts and preventative maintenance, training and productivity consultation with Heidelberg experts. While the subs deal would typically covers plates, Hampton opted out of that element and has remained with Agfa.
Once the five-year subs deal concludes, Hampton will have the option of buying the press – essentially, Malpas said it was a “forward thinking model” and compared it to car leasing deal.
“I’m sure some people will ask’s what is the point as I won’t have an asset at the end. But my argument is number one, do I want an asset, I don’t know, and number two it depends on how much I pay on a monthly basis,” said Malpas.
The deal was signed in principle over the Christmas break, with the details hammered out over the intervening months.
“I know what my costs are because they’re fixed going forward, I know what I’m committing to. I know what I’m going to get and we’ve checked that against our last three years of production data.
“We’ve agreed that the usage is going to be covered by that cost. It works for us, it works for them and we’ll balance the work on the new press and the other [paid for] press. We believe at this particular time and for our particular business, it works.”
Malpas said the £6.5m-turnover firm looked at all the various options of funding the investment, costing them all out with his accountant using total cost of ownership modelling.
He said that as a result he was confident the subs model was the most cost-effective option and also had a high level of flexibility, for example, enabling him to “switch on and off” part of Heidelberg’s workflow offering.
“We trust Heidelberg products, we don’t shop around really as we only run the best blankets, best vegetable-based inks, etc, and at the end of the day we want to know where we are as a business, and this deal enables us to do that.
“It’s a real partnership, the spreadsheet says it will work, so here we are. Exciting times.”
The firm has a separate full service package for the existing XL 105 and has also been operating a 'vendor-managed inventory', where Heidelberg manages the Bristol firm’s inventory of consumables and service parts, for some time.
Heidelberg launched the pay-per-use subscription model in 2018.
Heidelberg UK managing director Ryan Miles said the subs model suited firms with “sound business models” that are comfortable with a partnership approach.
“We expect to secure more subscription deals in the coming months and we are currently working with multiple customers who are considering our various subscription models,” he added.
Hampton has maintained production through the pandemic, running at around 70% of its prior-year levels with reduced shifts and around 30 staff placed on furlough at the outset, although that’s now nearer 20.
Malpas added: “We’ve been very lucky, and in past six weeks we’ve also had a good dozen clients come in to press pass and they felt secure. The team here have been first class.
“We’re going to keep our heads down, carry on working hard to ensure we do our absolute best for our clients and fingers crossed we’ll be okay.”