Results just filed for the year to 31 May 2019 show that sales slipped by £968k to £117.6m, while adjusted EBITDA almost halved, falling from £10.04m to £5.1m.

Added value – the group’s preferred key performance indicator – was down 6.2% at £69.7m.

Pre-tax losses increased from £1.3m to £6.1m and the bottom line loss was £5.7m.

YM said that it had been a challenging year for the industry as a whole, and gross margins had mainly been affected by “increases in raw material and energy costs”.

However, the group said that in the first six months of its current financial year it had made “good progress with its three-year business plan”. Unaudited sales in H1 were up around 6% to £65.4m, while adjusted EBITDA (excluding exceptional items and non-recurring costs) was greater than the entire prior year at £5.3m.

The group has also set up a new £17m  invoice finance facility with Barclays that replaces its old arrangement with RBS Invoice Finance. Chief financial officer Lee Richardson said it gave the business “a nice robust facility with plenty of headroom”.

In the report, YM’s directors said they were “very excited by the potential” for its paper wrap offering and other new products, “and expect the business to return to growth in future periods”.

“We are still looking at earnings being substantially ahead of the prior year,” Richardson added. “Some new contract wins didn’t kick in until the new financial year. Pricoa [the group’s major backer] are very supportive of what the business is doing and are looking at the longer-term opportunities for the business.”

YM also said it had had some success in bringing print work previously printed overseas back to the UK. It produces a wide range of printed products from catalogues and brochures to magazines, supermarket flyers and complex direct mail pieces.

It is also poised to launch a new product for the packaging sector, Richardson said.

Subsequent to the year-end the group also revised its borrowing facilities. The quarterly interest rate on senior loan notes of just over £16m with Pricoa has increased from 6% to 9%, with the redemption date extended by a year to September 2021.

Subordinated loan notes of £13.5m, also with Pricoa, were originally payable in September 2020. The repayment date has been moved to March 2022 while the interest rate has been increased from 14% to 17% (14% quarterly and 3% rolled).

The other loan notes of £20.25m date back to the MBO in 2015 and are owed to the original shareholders – Chris Ingram and Mike Newbould Jr. These notes had an interest rate of 8% and were due to mature in September 2022. The loan notes have been updated such that there is now no longer a fixed repayment date “with repayment at the discretion of the directors”.

The group had borrowings of £55.3m at the year-end.

The 2019 accounts for YM Group’s subsidiary companies including YM Chantry, Pindar, Lettershop and York Mailing are currently overdue according to Companies House.

Richardson said these accounts were going through a re-review process ahead of a coming change of auditor and would be filed imminently.