In a trading update ahead of its AGM this morning (22 September), the AIM-listed PLC said that business so far in September had been better than August, but still at around 70%-75% of the prior year.
“September is usually buoyed by events, exhibitions and the run up to Christmas. But social distancing restrictions are preventing any events from taking place,” the firm stated.
“Each segment of our diverse product range has been impacted differently. Signage and point-of-sale has been reasonably resilient, particularly with new social distancing products. Sales of websites and search engine optimisation packages have increased compared to last year. However, that growth hasn't offset lower volumes in other areas, like litho printing.”
It began implementing a restructure last month that will see an unspecified number of jobs go, resulting in an annualised reduction in costs of around £900,000. As part of the move Grafenia is also redeploying and retraining some staff to take on roles in other parts of the business, and to handle work that would have been done by contractors.
Chief executive Peter Gunning said the restructure at the £15.6m, 200-employee group involved a mix of roles “predominantly in litho production and design”.
Earlier this month the group made a roll-up acquisition as part of its revamped acquisition strategy, with an existing Nettl partner being incorporated into the company-owned Dublin store.
“We plan to use this platform to develop our presence in Ireland. We expect further roll-ins in the second half,” Grafenia said.
It has signed up University of Manchester graduate Olivia Jones as the first Nettl Scholar, and added 20 new ‘Works Makers’ to its Nettl platform, involving 100 new product categories.
“Having applied for hundreds of jobs throughout the past 7 months, I am completely delighted to have been offered this scholarship. It has given me the hope I needed. I am so positive that Nettl will support me to further enhance my skills and I’m looking forward to getting back to work and making a difference,” Jones said.
Regarding the outlook, Grafenia said it remained difficult to have visibility on future trading, with some of the group’s clients positively affected, and others seeing their businesses adversely impacted.
“We have taken action to reset our cost base to reflect the lower level of revenue the company is generating currently. However, we remain focused on delivering our plan for transformational growth and achieving our mid-term goal of 10-15% EBITDA,” the group concluded.
