“There’s definitely an upturn in the market, and that’s one driver for the investment, but then so is our focus on customers, which drives a need for us to maintain and build on our manufacturing excellence to support service excellence,” said chief executive Jeremy Walters.
Taking centre stage in its multimillion-pound spend is a second Kodak Prosper 5000XL high-speed inkjet web press, which was installed at its Bristol site in the spring.
The company's first 5000XL was installed in 2012 at its Nottingham site. The Nottingham machine will focus on the production of direct mail while the new Bristol machine, which features auto-splicing for faster web changeovers, will focus on transactional mail and will output fan-folded print directly into an enclosing line.
However, while the group also upgraded a number of its digital and litho presses to broaden its product portfolio, the bulk of the spend has been on upgrading the group’s post-press facilities.
The post-press spend was spread across DST Output’s Four UK production facilities in Bristol, Dagenham, Nottingham and Peterborough.
“This is a true £4.9m investment. It’s not leases, it's cash that has been invested back into the business,” said Walters.
“It comes partly off the back of some recent contract wins, but also off the back of our positioning. We’re a printer and we’re very proud of that fact. There are other parts of the business that complement that, but what we do at DST Output is print so we need to support that with kit investment.”
The post-press spend included an MBO digital roll-to-sheet mailing line and an MBO T800 folder at DST's Dagenham site, both supplied by Friedheim International, with the T800 going in later this month. Other kit included two Brackett padding machines, which were used earlier this year to produce 8m ballot papers, Heidelberg ST350 and a ST500 stitching lines, a custom-built IGS finishing line for fully variable mailing packs, and a Packsmart IPF30 finishing system for self mailers.
“We have some very good printing equipment, we just needed to refresh and enhance what we’re doing on the post-press side. This investment shows a commitment to every area of our business, we’re seeing growth across all areas,” said Walters.
The group’s Peterborough site has also installed a Horizon StitchLiner 5500 with HOF400 feeder and barcode verification system to stitch work from its pair of six-colour Speedmaster SM 74s and Xerox digital presses.
The facility also installed two Memjet short-run four-colour digital envelope presses.
The £4.9m spend also included a group-wide IT investment, which included a doubling of its data storage capabilities.
“We returned to [operational] profitability last year, and we want to grow and will do that two ways: through new customers and by increasing our efficiency, and the kit spend will drive that,” said Walters.
In its recently published figures for the year ending 31 December 2013 the group reported a slight rise in sales, from £160.7m in 2012 to £161m. It also turned around a £47m operating loss in 2012 to a £3.3m operating profit in 2013. This resulted in a negligible pre-tax loss of £709,000 in 2013 compared to a mammoth £49m loss in 2012.
However, almost £40m of the 2012 losses was due to a write-down of goodwill (£35.3m) and costs associated with the closure of the group’s Manchester and Edenbridge sites (£4.2m).
“If you look at the operating position of 2012, we actually lost nearer £8m, so like-for-like we talk internally of positive swing of about £10m from an operating perspective – the team have done a fantastic job,” said Walters.
