Litho Supplies described the industry as being in a difficult state as the group revealed interim pre-tax profits down almost 44% to 1.3m.

Joint managing director Gerry Mulvaney said: We are a very good barometer of the printing industry, just as it is a good barometer for the economy as a whole.

Sales for the six months to June 30 on slipped 2.7% to 39.4m. The group has halved its interim dividend to 2p.

Litho Supplies cited price cutting from competitors in the consumables arena, its largest single sector.
Grey imports have not gone away. Not many people actually buy from these suppliers, they use them to beat us up on prices but its difficult to provide the level of service customers expect if they dont allow you to make the money to pay for it, said Mulvaney, who added: I worry about the day that I go back to a manufacturer asking them to cut costs, when theres no other costs to squeeze.

Bad debt during the period doubled to some 400,000, despite stringent credit control procedures. Most of it was within terms, said Mulvaney.

The group had warned that its half-year profits would be below expectations in July. But as it unveiled its figures to 30 June Litho Supplies also revealed that it is closing its French operation, acquired four years ago, because it is impossible to see a clear future for the business.

There was better news elsewhere within the group. Mulvaney described the pressroom division as an unsung success, with sales of 7m and growing. We have worked closely with BASF and have more than doubled our volume of ink sales over the last 12 months, he said.

Its new direct imaging (DI) press range is also a key area for future growth, and one that capitalises on the groups electronics and pressroom expertise. It will launch the Xerox DocuColor 233DI and Screen TruePress 544 at Print UK next week.

We will probably sell more DocuColor 2000 series machines as a result of taking the Xerox 233DI, and Screen sees it as complementing their TruePress, Mulvaney explained.

Litho Supplies is also making progress with its online ordering system, although take-up has not been as quick as wed like. Customers invariably sign up when theyve seen it, although some customers get their order page up and then ring us because they like to talk to someone, he added.

Some 300 customers are currently using the service, with an average of 30-40 substantial orders a month being made online.

The share price fell 5.9% to 40p on the news.