Printing.com looks to online growth as franchise sales dip

By Simon Nias, Monday 12 November 2012

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Printing.com is looking to its growing online presence to counteract the "challenging" trading environment across its Franchise network, which contributed to a drop in first half sales and earnings.

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Printing.com chief executive Tony Rafferty

Operating profit excluding exceptional costs for the six months to 30 September was flat at £506,000 on turnover of £10.4m, down 2.8% on £10.7m in the first half of last year.

A £160,000 severance payment to ex-Media Facility Group boss Hans Scheffer resulted in a 30% drop in pre-tax profit to £350,000 (2011: £506,000), although net cash at the end of the first hald was up nearly 20% at £1.1m.

Lower first half earnings were attributed to lower sales across the UK and Irish franchise networks, which the company said "reflected the continued shift of micro businesses to ordering online".

On the plus side, Printing.com's own online offering, including its BrandDemand, Flyerzone and TemplateCloud platforms, as well as its white label W3P solution, was said to be "now at the point where the emphasis is moving from software development to deployment and monetisation".

One highlight in this regard was the first licence of Printing.com's crowd-sourced graphic design initiative, TemplateCloud, which converts freelance designs for flyers, leaflets and business cards into editable online templates, signed with needaprint.co.uk.

Despite previously not being considered a revenue stream in its own right, Printing.com chief executive Tony Rafferty said that the group had now identified a "significant opportunity to market TemplateCloud as a standalone revenue stream".

This will involve granting licences to other online printers to allow them to "bolt-on" the TemplateCloud functionality at an upfront cost of £1,000 and an ongoing fee of between £5 and £20 every time a template is used.

"We're going to template-empower existing online businesses with our technology via an API and it's only going to cost them £1,000 to come and play," said Rafferty. "Our aim is to partner with no less than 100 print shops worldwide within 18 months."

He added that this would be comparable to growth of the company's bolt-on-print franchise network, which was launched in 2002 and registered 100 sign-ups in its first two years.

"In the same way that 10 years ago we launched our bolt-on franchise for existing print businesses, we're now launching a bolt-on for existing online print shops for £9,999,000 less than it cost to buy Goodprint," added Rafferty in an apparent dig at web-to-print rival Tangent Communications.

TemplateCloud is currently available in English, French and Dutch. Swedish, German, Spanish, Italian and Portuguese content will be added early in 2013.

Printing.com is also "on the cusp" of launching it's W3P white label offering in the UK, which will allow third-party printers to licence the company's systems and software without using the Printing.com brand.

In addition to an initial setup charge and £300 a month licence fee, users will pay a small "click charge" for the use of certain software functionality and will be able to buy print at a transfer price in a similar manner to a Printing.com bolt-on franchise.


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