Print has been through enough tough times to know that was never going to happen.

However, some in print may have hoped, with fingers crossed so tightly that the knuckles glowed white, that things would have at least stabilised, or better still that there were some small crumbs of optimism buried among the figures. Remarkably, the signs are that this is the case, that the massive undertakings of the print industry to emerge from recession a fitter, leaner beast may be paying off.

The optimism had its foundations in evidence from the pages of PrintWeek. While admittedly the majority of the news making the magazine’s roster has reflected the continuing troublesome economic climate and the sometimes devastating impact that has had, the odd highlight and success story has managed to break through, particularly in the labels and cartons markets.

That said, any positive talk cannot hide the fact that the figures show the past year has been tough – perhaps even tougher than even the most pessimistic commentators suspected. The expected economic recovery has never materialised in any meaningful way and, far from improving, the global economy appears intent to stumble from one crisis to the next, with EU states in particular seemingly queuing up for capitulation.

"What recovery?" exclaims Daniel Smith, partner at Grant Thornton. "I have seen no recovery at all. What has become clear is that we are in this for the long haul. Anyone who spent the past 12 months planning for a bounce back is going to catch a cold."

Shock increase
In such stringent circumstances, the average sales figures for the Top 500 may come as a shock. Twelve months ago, the figure was £23.8m, while this year that figure rose to £25.1m. That’s a surprising rise of over 5%. Some may argue that the high figure may be slightly skewed by the leading printers stretching further away – this year’s number-one, DS Smith UK Print, registered sales of £917.7m whereas last year’s leader, Williams Lea, had sales of £756.1m. However, the figures for number 500 also went up by a similar margin, so the argument does not stand up.

What the figures do probably belie, though, according to Dale Wallis, membership director at the BPIF, is that certain sectors are doing well and propping up the figures for underperforming sectors.

"Some sectors are obviously doing better than others, and so those figures will flatter some and do a disservice to others," explains Wallis. "Certainly cartons and labels have done well, but then you have books and commercial print that have both really struggled."

Sales figures, though, as we all know, can be misleading. Just because more is being sold, it does not necessarily mean more is being earned – the price wars and margin curtailment in certain sectors have been a topic of conversation both in the pages of PrintWeek and on the forums of printweek.com, where debate has been, putting it pleasantly, ‘lively’. Although some companies have walked away from what they deemed ‘crazy pricing’, there have always been those willing to produce a job for a lower return in order to fill spare capacity.

You’d expect, then, that the pre-tax profits of the top 500 companies would have taken a hammering. You would be wrong.

In fact, the average pre-tax profits, compared with the previous 12 months, have actually risen from £505,000 to £858,000, a percentage pre-tax profit margin rise from 2.03% to 2.13%. The renewed investments are partly to thank. Unlike 12 months ago, this year there are actually investments to speak of – the hibernation period of ‘making do’ and sweating ancient or outdated machines that bit too far largely ended as a growing number of people began to open their wallets once more to update to new technology.

This has been crucial on two levels. Firstly, it has aided the industry in its efforts to streamline and speed up production, replacing inefficient machines with lean, high-efficiency kit. Secondly, it has brought print into a new generation of services, one where cross-media, personalisation and ever-more diverse and high-quality products have been possible. In short, these technology investments, though impacting on the balance sheet this year, have set the industry up with the tools it needs to survive in the short term and to push forward and grow in the long term.

But the figures also reflect the fact that print has evolved into a stronger industry, with those struggling with unsustainable business plans or in unsustainable markets falling by the wayside leaving the fittest to survive and, in many cases, thrive.

That does not mean we should expect this to be a base from which the heady profits of bygone days will return next year, says Wallis.

"We should be quietly confident but not reckless," he warns. "I think what we are going through is now the norm, we should expect these kind of figures for a couple more years. And I think people realise that now, they are not making the impulse buys they once did. If people are buying kit now they are doing so because they have the capacity to make that investment work. The days of buying the kit then searching out the capacity have gone. It’s the other way around now and that is how it should be."

‘Unexciting’
Smith at Grant Thornton agrees: "I expect the current margins to remain stable at that level for the foreseeable future, at least the next two years. It’s not exciting news, but it is the reality. People should budget for that. They should not be expecting an aggressive turnaround, it isn’t going to happen, except possibly in one or two very small niches."

While the figures from this year’s table may not be, as Smith says, an "exciting" turnaround back to the glory days, most in the industry will be satisfied that stability has at least been found and that even a slight rise in profit margins has been achieved – with the closures, price wars and commoditisation of the industry, it could have been much worse. The investments and lean manufacturing processes that were put in place in past years have had a positive effect, but some may be asking what more can be done. People, says Wallis, will be key.

"With a lot of companies, staff training and utilisation is an untapped area," he explains. "The efficiency gains are going to come from the staff – you have to invest in people in the same way we have invested in lean manufacturing. We often say people are our finest asset – do we mean it? We should do. We should be training and investing in our staff, and supporting them as much as we can to get the best out of them. There is so much more to get out of our staff if we just utilise them properly."

How next year’s tables will shape up is anyone’s guess, but with the right procedures and initiatives put in place the industry should be confident that it can continue to pull away from the troubles of the past few years. This year’s figures are hopefully the start of a long-term rebuilding process and the pay-off for efforts already made – we’re not back on the super yachts yet, but at least we’re out of the lifeboats.