The UK’s largest web offset print group made a pre-tax loss of £9.4m (2010: £6.1m loss) on turnover of £83m (£75.9m) for the year to 31 December 2010, prior to its purchase of St Ives’ web division, although more than £7.1m of this was the result of a depreciation charge.
Adjusted EBITDA more than halved to £1.4m (£3.5m) during the period, which Scanlon described as "another tough year" as volumes contracted and raw material and energy costs eroded margins.
However, looking forward Walstead highlighted improving market conditions, with the average price of a printed 32-page section rising 6.6% in the eight months to 31 August 2011.
"I believe that 2011 and 2012 will be watershed years for this industry," said Scanlon. "We are very close to the tipping point at which capacity is realigned with demand to produce price stability."
He also fired a warning at print buyers who have been able to take advantage of overcapacity in a sector that 10 years ago was "at least twice the size it is today".
"You still have a choice of reliable, well-invested, service-oriented suppliers where you can place your mission-critical work. However, you will have to pay a fair price that enables your printer to earn a fair return," he said.
"If you don’t, then it will only take one large printer to fail and there will not be enough supply to meet demand – not at any price."
Since the period in question, Walstead has continued to lead consolidation of the sector with its acquisition of St Ives Web, which contributed to a 49% year-on-year increase in turnover for the eight months to 31 August.
Web turnover has risen 72% in the same period, while the group EBITDA margin on net turnover has increased from 1.3% to 3%. Other post balance sheet events include the closure of the Apple and Impact sites, as well as the fire at Heron that resulted in the loss of one of Heron’s Lithoman IV presses.
The press is the subject of an insurance claim with Wyndeham Group chief executive Paul Utting stating that the company’s preference was for it to be "repaired or replaced".
