The AIM-listed PLC said that it expected to file sales of at least £12m for the financial year ending 31 March, up from last year’s pandemic-impacted figure of £9.65m.
“Whilst this isn't back to pre-pandemic levels, our cost base is significantly different and our breakeven point is much lower,” said CEO Peter Gunning in a pre-close trading update.
The firm almost halved its losses in the first half of the financial year.
Gunning said that total sales last month had bounced back significantly following further pandemic-related uncertainty in December and January, and were the highest recorded since November 2019.
However, Grafenia also flagged the impact of “cost rises across the board”.
“Paper has increased by 30-50%, due to distribution costs, shortages and energy. We have increased our prices three times in 2022 to reflect this. Fuel and energy prices remain at high levels and are not helped by global events.
“This situation impacts everyone. We continue to track competitor pricing and nobody is immune to these pressures,” he said.
Over the past year the number of Nettl partners has reduced by 12, to 220, with Grafenia describing the partner network as “stable in what have been turbulent times”.
Gunning said there was no single reason for the reduction. “Some went bust, some did it to cut costs and try to survive. Others consolidated multiple locations into one. Some lost their team. Some decided to de-diversify. Some went white label and just use part of the software.”
However, each of Grafenia’s business units performed better than in the prior year.
The firm launched its new WorksThing app for managing sign and graphics installations at the Sign & Digital show last month.
“It's early days, but multiple businesses have signed up for a free trial and we're pleased with the reaction at the event. We expect that some WorksThing clients will become Nettl partners, as they seek to get more from every client relationship with the Nettl toolkit,” he said.
Regarding the outlook, Gunning said the business was “cautiously optimistic” about the upcoming year and reiterated its mid-term target of 10-15% EBITDA.
The firm is still on the hunt for bolt-on software buys.
“Our search for software businesses continues. We hope to update the market with more detailed progress shortly.”
