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Mixed picture for Litho Supplies at half year

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Litho Supplies has moved to restructure its board following last months high-level departures, and has reported a big jump in sales of electronic equipment at the half-year although sales and profits overall were down.

In a move that was widely expected, Eddie Williams (pictured) has been appointed to the main board as group sales director. He said he was looking forward to the "many exciting challenges ahead".

 

This is a new position and the group will not directly replace its former joint managing directors Gerry Mulvaney and Terry Cooper, who resigned last month.

 

In the six months to 30 June sales at the group slipped 1.6% to 23.66m, while pre-tax profits prior to exceptional restructuring costs of 152,000 were down just under 15% to 687,000. The firm said gross margins in its core consumables business, where sales fell 8.7% to 17.43m, were hit by tough competition and the switch from analogue to digital workflows meant customers spent less.

 

"The price of CTP plates is also coming down so there is more pressure on margin," said chief executive Mike Hammond. "Some of our competitors are in dire straits and are taking orders at cost price or below in order to get the consumables business."

 

Hammond said the firm has "looked very closely at controlling inventory", and this had made a significant positive impact on its cash balance, which was up by almost 2m to 3.81m.

 

Litho Supplies also experienced price pressure on ink-jet consumables. However, the firm expects to benefit from price increases for analogue consumables being pushed through from 1 September.

 

It reported good progress in flexo CTP and plate sales, and plans to expand further in this sector. The market for Toray waterless products was described as still "embryonic" but the firm expects to benefit as stricter environmental legislation filters through.

 

Sales of electronic equipment jumped by almost a quarter to 5.93m, and the company is "confident" it can improve CTP sales at smaller printers. Litho also recently boosted its digital team and is expecting more sales as a result.

 

Chairman Bernard Clark said conditions remained "extremely challenging" and the much-reported recovery in advertising spend had not been reflected in activity levels at customers.

 

Litho Supplies shares rose 13.5% to 50.5p on the news.

 

Story by Jo Francis