Like most in this industry, Kingsdown Printing in Bristol has had to battle against crazy pricing from its competitors. However, the company has bucked the trend slightly by going on the offensive. In May, the business, faced with the prospect of a quiet month, decided to offer five hours of free press time to a select group of prospects. The company would charge for consumables and delivery, but add no margin for print.

Despite a hostile reaction from bloggers on the messageboards of printweek.com who saw the move as a final nail in the coffin of industry pricing, Becky O'Brien, sales director at the company, describes the initiative as "the most successful marketing campaign we have ever done". The company won good clients off the back of the offer and the campaign "more than paid for itself".

However, defying the assertions of the bloggers, the free press offer does not reflect a company that does not care for margins. Indeed, it too has felt the impact of the desperate pricing in the industry.

"We have come up against some ludicrous counter bids," says O'Brien. "We recently lost a job to a local company at well below cost. We worked out that the bid was equivalent to the cost of the paper minus £50."

To defend the company's healthy profit margins, which according to the PrintWeek Top 500 2009 stood at an impressive 7.2% pre-tax, the company realigned its sales incentive scheme, rewarding sales staff for margins rather than simply getting the work through the door.

More aware
"We have made our reps more aware of margins, which we didn't have to do before," says O'Brien. "We are moving towards an added-value target, rather than turnover targets. We never had to worry about that before, estimators did the work and the sales team quoted the figures. However, even our long-standing customers are moving on price."

Despite the pressures on margins, the company has continued its upwards trajectory in recent years. In its most recent financial year, it recorded a turnover of £5.5m, up from £4.2m in the year to June 2008 and £3.6m the previous year. Managing director Dave Spencer says that, despite the recession, the company is targeting a turnover of £6m in the coming 12 months.

"We can get another £3m of print out of the factory we have and we have no reason not to expect continued growth," he says. "We have changed to continental shift patterns to achieve the growth. I don't see an end to the decreasing margins, so we have to increase efficiency and move to a 24/6 model."

The company has not been afraid to invest to grow the business, despite the punishing economic climate. In January, it took delivery of a new Heidelberg 10-colour XL75 Perfector. The investment came off the back of a successful foray into mailing, which came 18 months ago and has given the company experience of diversifying into new areas and the art of selling new services to its customers.

Diversification
That experience will come in handy as the business embarks on a strategy to diversify further away from sheetfed printing. Spencer is eyeing a move into digital, but is cautious in his approach. "We need to diversify to capture more value, but I see [a move into digital] as a move into marketing," he says. "We are currently formulating our strategy. Digital is a completely different sell to what we are used to and it is a case of having the right people in place."

However, Spencer is keen not to lose the focus on its existing profitable operations, nor is he ruling out any other expansion routes. Indeed, the company is quietly on the hunt

for acquisitions. Spencer says: "We are interested in small scale acquisitions and looking for a merger of a business that we are in control of. A £2m-£3m turnover business would fit straight in here."

Kingsdown's history has been one of evolution and adaptation. Spencer reflects with pleasure on the fact that a small business selling office stationery has grown into a printer that is now considering a move into marketing communications. The company is riding out this recession and is well poised to evolve even further as the industry changes.

Kingsdown factfile
Founded 1983
Based Bristol
Managing director Dave Spencer
Kit includes Heidelberg 10-colour XL75 Perfecto
Services include printing and mailing