Grafenia to roll out cross-media platform to help combat falling sales

By Darryl Danielli, Monday 09 June 2014

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Printing.com parent Grafenia is poised to launch a new cross-media platform for franchisees later this year, which it hopes will help combat falling revenues in its traditional print franchise business after the company posted a drop in sales and profits in its latest accounts.

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Rafferty: building a lot of new initiatives and these things take time

Total sales for the 12 months to 31 March 2014 fell almost 6% from £20.7m to £19.4m, while pre-tax profits tumbled almost 15% to £760,000 and EBITDA dipped 5.7% to £2.65m.

While revenues from licence fees from W3P web-to-print platform grew, print revenues overall at the company fell from £19.8m to £18.4m. The Printing.com franchise was the hardest hit with sales falling almost a quarter from £10.8m in 2012/2013 to £8.2m this year.

“We’re building a lot of new initiatives and these things take a little time to get off the blocks, but we think we now have the right elements in place and we’re now trading ahead of where we were this time last year,” said Grafenia chief executive Tony Rafferty.

“Remember these are legacy results going back to April 2013, when W3P was all cost and no revenue, whereas we’re now heading towards a hundred users and the elements are coming into line where we can move the business forward.”

In the group’s print stable the Flyerzone, BrandDemand and Drukland platforms grew marginally, but not enough to offset the decline across the Printing.com platform.

According to Rafferty, while the group has been profitable for 11 consecutive years and remains debt-free, the core Printing.com franchise model, while it has served the group well for 14 years, needs to be refreshed as new franchise take-up has stalled in the past couple of years.

“Our franchisees continue to do well from it, but we accept that as it stands we’re not going to attract many more franchisees, which is why we’re talking about Nettl our cross-media franchise that we’re planning to launch in September,” he added.

Grafenia’s research indicates that there are 5,000 small businesses that offer graphic design, web design and print services and Rafferty believes that Nettl could offer them the same benefits that drove Printing.com’s success – the ability to save franchisees substantial administration on every job.

“The administration involved [in online projects] is high, in terms of monthly billings, update billings for example, so we’re extending all of our systems so that they can manage a full cross-media platform including print and online,” said Rafferty.

He said the Nettl platform would enable users to bring the administration of print and web jobs into one portal. He also said it could protect a company that perhaps relies on one person for web design by ensuring that the expertise and know-how is maintained should that person leave.

Nettl will go live at Grafenia’s Printing.com stores in Clerkenwell, Reading and Dublin in September and will be gradually rolled out to the wider network shortly afterwards.

“We could probably do with 40 or 50 new partners around the UK, because we have some geographic gaps, so Nettl will help plug that because the reality is most businesses wanting to tack on a franchise want something that has a more cross-media offering,” said Rafferty.

“There are many printers that want to move in that direction, and we can help them and also help grow our franchise network at the same time.”

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