Grafenia has made its first acquisition of the new financial year with the purchase of Devon-based AG Signs & Print, with which it intends to build a Nettl superstore in Exeter.
The PLC acquired Nettl of Exeter in December to operate as a studio for its expanding print and web design brand. Taking on AG Signs in a deal confirmed today (5 July), Grafenia continues its plan to acquire signage firms that it can roll into a “superstore” alongside a second Nettl-owned company.
AG Signs’ full team of nine staff will remain onsite at 279sqm premises in Honiton for the time being. Directors George and Celia Blake will retire following the acquisition, while director Martin Baily will become regional director for both Devon-based Nettl companies.
Grafenia chief executive Peter Gunning said: “We acquired Nettl of Exeter last year and they knew about AG and turned us onto them – they have got a good reputation with clients in the local area and this acquisition will extend the range of products available to their customers to include things like ink-on-fabric, litho printing and clothing.
“Martin has got a fantastic sign installation and web development team working for him and clients’ relationship with AG will remain just as reliable as before, and all that will come with some compelling prices.”
AG Signs will continue to trade under its own name while it is still based in Honiton. Gunning said that the view was to relocate AG and Nettl of Exeter into a single superstore premises, sized 465sqm or more and branded under the Nettl name, within a year. A clear timeline has yet to be established.
Gunning said plans were afoot for an expansion of its Devon headcount – the search for a new designer is already underway.
Currently, £570,000-turnover AG Signs outsources all of its print requirements, though Grafenia will endeavour to bring the majority of those processes inhouse through Nettl of Exeter.
The acquisition marks the first major move of Grafenia’s new financial year, which began on 1 April. Results for 2017/18 up to 31 March reported mounting operating losses of £1.1m, while sales jumped to £14.63m. Gunning attributed the losses to the “front-loading” of costs that come from the group’s campaign to acquire signage firms for its Nettl rollout.
Additionally, the costs of the brand’s ongoing international expansion into territories such as the Netherlands and France were shown to have impacted performance.
“Processes like this take time, and we will continue to invest in looking for sign businesses to join us,” said Gunning. “Costs are obviously front-loaded resulting in loss, but we continue to generate cash which is important.
“Grafenia and Nettl are on a journey to continue this roll-up, so acquisitions like AG Signs should be seen as a call to arms for sign business owners interested in joining our superstores or in taking retirement.”
Nettl’s ‘build, buy and license’ model involves a combination of opening new Nettl stores, the acquisition of signage businesses in geographically advantageous areas and licensing the brand out to partners.