Infinity Finishing in Chessington, south-west London, is not alone. Large-format printer PressOn also expanded recently thanks to a bank loan, prompting joint managing director Andy Wilson to take a closer look at growth in the sector and ask if it’s now sustainable. PressOn, in Rochester, Kent, used some of that loan on a £650,000 kit blitz: a Vutek QS2, an HP Latex 3000 and a Kongsberg XP cutter.
Others have been looking at the state of print and wider economy recently and asking the same question. Earlier this month, the International Monetary Fund (IMF) upgraded its forecast for estimated UK growth this year from 0.9% to 1.4%. Recent surges in consumer and business confidence have also reinvigorated the Federation of Small Businesses (FSB).
Small business confidence has reached its highest level since records began in 2010, according to the FSB’s latest small business index, which rose to 33.5 in the third quarter, beating the previous high of 18 in the first quarter of 2010. Confidence, it insists, has improved for firms across most sectors and most regions. This has led to the kind of investment so badly needed in people and businesses to "begin feeding through".
And it appears to be holding out in print; forward bookings are strong, volumes appear to be healthy well into 2014, while vibes at the recent Labelexpo and Print 13 shows were unmistakably positive. The former boasted visitor numbers up 11% on the last show in 2011 and superlative-packed testimonials from many of this year 31,795 visitors to Brussels.
Back in Rochester, Wilson says: "I don’t know if the recent growth in the sector is directly related to the economy or evolution in the industry. The economy has rooted out the poor performing, unsustainable firms that print has been known for, and left behind leaner, meaner, proactive, sustainable businesses."
Wilson can’t be sure just how sustainable print’s growth is, but like many other businesses, his is continuing to invest: £150,000 will be spent on developing marketing and customer relations over the next three years because "these days the sales rep in the Ford Mondeo banging on doors is antisocial".
A lot still hinges on the banks and without a sustainable track record it will be hard to raise money.
"We were able to get good rates by sitting tight for a couple of years, increasing cash in the business, limiting spending and then going to the bank with a substantial deposit and asking ‘do you want to be on board?’ Banks have a lot to answer for, but the crash happened in 2008. Printers that are still sitting around saying it’s all the bankers’ fault need to pick themselves up and move on."
Infinity Finishing director Ian Simkins has been busy doing the rounds, telling printers within the M25 areas of Kent, Sussex and Surrey about his fledgling business. "Print has definitely turned a corner," he says. "All the companies we have spoken to are pretty optimistic. Part of it is a print resurgence prompted by the waning iPad and Kindle fads."
Efficiency drive
Another factor was forced on the firm by the recession, he says echoing Wilson; print companies had to "shake themselves up, making them leaner and meaner," he insists.
John Fry, production director at B&D Print Services, also draws attention to the perverse benefits of recession: "Lots of players in the market have, sadly, been dropping like flies and that has had an effect. This summer, when business traditionally dies down, it was outrageously busy. Newer, better, technology has upped everyone’s game, which makes what we offer more appealing."
His company in Leyland, Lancashire, bought a NexPress 2500 a year ago and is about to splash out on Metrix imposition software. As well as looking to take on another printer, the 30-staff company plans to acquire a Horizon binding line and two finishing staff. Turnover is up 11% on last last year and Fry is confident print is seeing sustained growth.
Displayways, the south London wide-format business acquired last year by former St Ives marketing director Rob Kelly and business partner Peter Sheldrick, has enjoyed a recent sales jump of 10%. Kelly says growth across the industry is spiky, but that business confidence is returning and people are spending, including him.
The 20-staff, £2m-turnover firm, recently bought a £140,000 Zünd cutter and is on course to take on 10 more staff in the next year or two. Kelly, like others, is keeping an eye on global factors. Ongoing problems with the euro could scupper any thoughts of sustained growth. Simkins at Infinity Finishing meanwhile wonders if the federal debt problems in the US will hit growth.
"Regardless of world events," says Simkins. "This is the best time to be starting up. Everything is improving from where we were a few years ago. Kindles and iPads may come and go, but catalogues, magazines and adverts are here for the long haul."
OPINION: The green shoots are great but beware of the snakes
Kathy Woodward, chief executive, BPIF
"We are so delighted to see green shoots at the moment that we are, to some degree, not looking for the snakes in the grass that could pack a pretty potent punch.
Trade forums across nearly every sector are reporting that, after a less-than-exciting August, order books are now looking stronger and positive projected trading would appear to go beyond Christmas and into the start of 2014. There is a general feeling of optimism.
The cynics would say that we are now into election mode and that the Coalition will want to keep messaging positive. The boost to the housing market undoubtedly has had an impact. New build stimulates activity across a diverse supply chain, while rising house prices, although not great news for those outside of home ownership, create a sense of increased security for those on the ladder as marginal equity turns positive with a general loosening of the purse strings.
So what are the risks? At a macro level it seems to be around the confidence to go ahead with capacity investment. The story around the trade councils appears to be that there is still too much uncertainty around energy security and pricing, while there are still many sectors outside of the government’s ‘chosen few’ that are struggling to get reasonable financing.
In addition, the celebration of the removal of ‘gold plating’ and unnecessary bureaucracy doesn’t seem to have quite made it to the grassroots, where many sectors have highlighted discrepancies in UK manufacturing requirements that are not similarly imposed on imported products, creating a disadvantaged UK manufacturing sector.
So there is a way to go before the green shoots create the appetite for significant manufacturing investment and with it general economic stimulus.
READER REACTION: Is print at last begin ning to enjoy sustainable growth?
Simon Tabelin, owner, Brilliant Media
"I’m extremely upbeat. We have seen turnover rise 42% in the past 12 months, spent over £60,000 on kit and have doubled staff numbers. On the wider print industry I’m also positive it can sustain growth, but companies must do much more to embrace smart technology. This generation of kids is highly literate on smart devices, the internet and video, and they are the buyers and decision-makers. Those companies that fail to take up the multimedia challenges won’t survive regardless of how successful the rest of us are."
Duarte Goncalves, managing director, DXG Media
"We have been enjoying growth since 2009, even though we took a hit at the start of the recession with a large bad debt. Last year’s growth was the best ever while this year we invested in a Heidelberg CD 102 B1 machine and will have our best turnover for sure. Yes, I think this is sustained growth. The important thing is to go out and get work, rather than blame the recession. My worry, however, is people underselling their services – this is one of the biggest threats to growth and more damaging than so-called phoenix companies."
Miles Bentley, commercial director, LumeJet
"I definitely think it’s looking up. People want new ideas and we are getting a lot of approaches. There are a lot more switched-on guys out there who have learned a lot from the past few tough years and printers are repositioning themselves as marketing services. I’m passionate about print – recent research has proved that catalogues inform so many purchasing decisions, while Google uses lots of direct mail. Yes, the wider economy is picking up, but more people are realising that print has a really powerful place in the market."
