Grafenia PLC, which is listed on the London Stock Exchange’s AIM market, has been in a challenging period as it transitioned its business model away from its original Printing.com offering.
It announced the departure of Rafferty at the same time as the sale of its £6m turnover Dutch subsidiary, which it acquired for €2m (£1.5m) five years ago, to Rosso BV for €2.35m in cash.
The announcement was made after the close of trading on 6 October. The firm's share subsequently fell sharply and was down 4.75p, or 23.46%, to 15.5p the following morning.
When it announced its year-end results in June the group said that it was exploring options for its Flyerzone.nl and Druckland.nl offering, due to the increasingly competitive Dutch market. Group sales were down 12.6% to £17m at the time.
In a statement, Grafenia said: “Following the disposal of Grafenia BV, in the short term, the scale of the group's operations will materially reduce. Accordingly, and by mutual agreement, Tony Rafferty has decided to step down as chief executive and to leave the Company. He will be available to assist the Group during the transition period and intends to retain his equity stake for the foreseeable future. The Board wishes to thank Tony for his years of unstinting service and drive making the Group what it is today.”
Rafferty told PrintWeek: "I started the discussion with the board about this, and my recommendation was that Peter [Gunning, chief technology officer] had the better skillset, with a more technical bias, to take the company forward. He is more than capable of doing this.
"It would be wrong of me to say that it wasn't emotional [to be stepping down], having worked on something for so long, but simplifying how our management structure works internally is the right thing," he added.
Rafferty also said he had decided not to continue as a non-executive director. Grafenia has appointed a new non-exec, Conrad Bona, who was described as “an experienced entrepreneur, investor and business consultant”.
Gunning, pictured below, takes over as acting CEO. He has been with the business for 17 years and on the board for 15. He said: "We are a smaller business for now, but my plan is to re-engage with all our partners and return to growth."
The announcement also included a trading update and profits warning.
Grafenia said trading had been softer than expected in July and August and first half profits would be “modest”. And while trade printing offering Marqetspace was exceeding targets, the sales cycle for Nettl stores was proving “longer than anticipated” with 10 additional partners signed up in its first half.
The firm stated: “The weakness in the first half is likely to result in underlying earnings for the full year being materially lower than previously expected on a like-for-like basis.”
However, it also reported some success with its new Brambl offering, a by-product of its Nettl webshops that is targeted at printers and designers who want to offer website creation services.
Gunning also said the firm had picked up new resellers for its Marqetspace trade print offering as a result of the recent issues at Calais affecting deliveries from continental suppliers.
He said the firm has also invested in D.gen Teleios Grande digital textile printing kit and associated finishing equipment for a new ink-on-fabric range producing products such as soft signage, flags and gazebos.
Rafferty started the Printing.com business in the 1990s, it grew out of a sideline producing flyers for nightclubs.
He said his future plans included looking at investment opportunities in franchising.
Rafferty is the second-largest shareholder in Grafenia, with a stake of just under 20%. A German investment company is the largest shareholder.
