13-02-2004 - Printing.com - Taking on the big boys and winning - Manchester Evening News
Established: 1990 Business: Printer of business cards, leaflets, flyers, brochures and other items
Markets: UK and Ireland Employees: 110
Turnover: GBP7.7m in 2002-03 Profits: GBP510,000
Top team: Chief executive Tony Rafferty, finance director Alan Roberts, operations director Peter Gunning. The non-executive chairman is George Hardie
PRINTING.COM is growing up. From a tiddler based in Tony Rafferty's bedsit and turning over GBP50,000 a year, the business is celebrating its first year in a GBP3m hub in Trafford Park. Sales this year are forecast to top GBP10m and brokers expect pre-tax profits of more than GBP1m.
The firm is quoted on OFEX but is likely to graduate to the Alternative Investment Market later this year. Tony, 35, who lives in Didsbury, says it is on course to have 175 shops by 2005.
Currently, there are more than 70, selling full-colour business cards, headed notepaper, brochures, leaflets, flyers, invitations and other printed items to over 40,000 small and medium-sized companies. Most stores are operated on a franchise basis or as bolt-ons to other businesses, such as graphic design studios. A declining number are owned by the firm. All the printing is done at the hub, a 24-hour operation where there is also a centre for training franchisees, and the corporate headquarters.
Printing-com's share of the �£1bn-plus UK market is still tiny, but growing fast. Tony says confidence is returning after a blip last summer. He said: "Businesses which were running four marketing campaigns cut the number, and those attending exhibitions cancelled half of them."
That had an impact on Printing-com but, since August, there has been a revival. The half-year to the end of October saw turnover rise from GBP3.9m to GBP4.7m, and the firm posted interim profits of GBP250,000. It moved into the black for the first time in 2002-03, with pre-tax profits of GBP510,000 on sales of GBP7.7m. The shares are also doing nicely. When the company was floated in September 2000 they were priced at 22p. They reached an all-time high of 36p and a low of 7p, but are now trading at 31.5p, giving Printing.com a market value of GBP12.2m.
Its origins lie in Tony's student days in Sheffield. He failed his electronics degree because he was too busy putting on gigs for the students' union entertainments division. "After that, I started printing flyers for nightclub promotion nights. I would hire the clubs and put on the entertainment, or I'd print for other clubs elsewhere in the north of England. "For a while I was running it from my bedsit. I turned over about GBP50,000 in my first year."
In 1993, Tony moved to Manchester and based his business, called Creation Publicity, in Longsight. He said: "I was paying GBP40 a week in rent. There was just me and a graphic designer." Sales grew to GBP1.2m by 1995, by which time Creation had 30 staff and was based on a business park off Chester Road.
Then, venture capitalists invested GBP£200,000 for a 15 per cent stake, and Tony used the money to buy printing presses. Creation moved to Cow Lane, Salford, and he recruited a client, Peter Gunning, to run his first shop, in Edinburgh. "It turned over GBP250,000 in the first year and we knew we were on to something," says Tony. "He recruited Alan Roberts as finance director and opened a branch in Sheffield in May 1999.
By the end of that year, the search for a fresh injection of capital for expansion was well underway. "The banks said we should close our stores and do everything online, as it was the era of the dot-com boom," says Tony. "But we decided to float the company as a method of raising money. We had eight stores, but raised GBP1.9m initially and a further GBP1m subsequently."
Before the float, Creation became Printing.com, a title bought for GBP200,000 and a substantial stake in the firm from a New Jersey-based businessman who owned the Internet domain name. The first bolt-on operators were recruited in early 2002 and the fully-fledged franchise stores were launched that year.
The next phase of expansion involves joint ventures in Europe and the United States. Printing.com has already begun testing the concept in the euro zone with a store in Dublin. In England, the business is nibbling away at the dominant players, Kall Kwik and Prontaprint, which command 13 per cent of the market. Tony likens Printing.com's position to that of low-cost airlines such as easyJet, which took on giants like British Airways and shook up the sector, often getting up their noses.
Printing.com's cheeky strategy is to open stores on the big players' doorsteps. Tony says: "We believe that, in several situations, Kall Kwik has investigated what steps can be taken to prevent us from doing so."