05-04-2005 - Printing.com - " Printing.com has a powerful four-colour plant .."
I first wrote about Printing.com (PDC) last October when the shares were 28p, but the best summary of the company's operations is as follows, published on the last day of 2004:" Printing.com has a powerful four-colour plant in Manchester, through which it aims to ensure that it can give a better product, and do so more cheaply; and the outlets which served the core unit, often deliberately, were located cheek-by-jowl by such on-demand printers. Printing.com mounts its service online; the jewel in the company crown, its proprietary software. So, 'clicks and mortar' were the name of the game as the company went hell-bent in planning to extend its number of outlets and to increase throughput per unit. What then brought a decisive and beneficial change was the introduction of franchising arrangements. In August, when Printing.com quit OFEX to alight on AIM it raised less than GFBP1 million - at 30p. By that time the number of franchised stores, 14, exceeded the owned outlets; moreover there were 57 of what the company called "bolt-on" franchises, where established businesses with broader trading profiles are licensed to utilise the system and the brand. Burgeoning sales at high margins are the reward for a profile which now both eases pressure on capital needs, and insulates the core from underperforming units."
The point was that I thought that the shares had run too far ahead of events, and said sell, at 57.5p.
I was very pleased to see this morning that the company has issued a trading statement telling of robust year-end trading conditions with two new franchise stores and seven new bolt-ons under the corporate belt. Three more full franchises are under option; cash generation strong; the full-year figures are expected to be pitched up to market expectations; and there is a clear indication of a maiden dividend. The shares, which had come back, moved forward strongly to 44p and for anyone that did not take my advice I would say hold - for here is every prospect of that lost ground being regained.