Litho Supplies is "very bullish" about its future despite suffering a 10% drop in sales for the year 2000.


Joint managing director Gerry Mulvaney said the group had been hit by a 10% drop in prices for its core products as they fell to nearer continental levels.


But he thought prices were nearing the bottom of the cycle and would rise again in the future as manufacturers tried for increases.


"Weve not lost business and volumes have held up particularly well," he added.


Chairman John Byford said the "virtual reality" of new economy firms had also forced prices down. "Until more of them disappear, prices will continue to be difficult to achieve. Competing with smoke and mirror offers from PC screens will be a challenge for a period and continued cost cutting must be the order of the day."


Mulvaney said the development of its online ordering system would allow it to cut transaction costs.


Litho Supplies preliminary results for 2000 showed a drop in sales to 76.8m, while pre-tax profits fell from 5.06m to 3.38m, but Mulvaney claimed the groups competitors would be more than happy to record equivalent figures.


The impact of CTP and digital printing (where Litho Supplies distributes a range of Xerox presses) has been a double-edged sword as it had hit sales of its traditional consumables.


Its new pressroom division was showing "very good growth" according to Mulvaney.


Litho Supplies is "constantly reviewing" its stock market listing. Mulvaney admitted it was "a very small fish in a large sea".


Litho Supplies shares fell by 15.6% to 74p.


Story by Gordon Carson