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14|Printing World|July 1 2002
finance
By Gareth WardMedia companies, andindirectly, printers shudderedlast week when WPP, the world’slargest advertising and market-ing services group, warned that itwould most likely miss its profittargets this year.
It also says that there would beno pick up in trading until the endof the year at the latest. Shares inad agencies like WPP and Cordiant Communications fell onthe announcement. The state-ment contradicts a commentmade two months ago, whenWPP was clearly hoping for animprovement in business. But thelatest news dashes those hopes.
It says there are “few if any,signs of recovery in the advertis-ing and marketing servicesindustry. Our view continues tobe that the recovery will be grad-ual – saucer or bath shaped,rather than U- or V- or W-shaped,and will be American led.”
In the worst case there will beno recovery until the AthensOlympics or US presidentialelections in 2004. US news-papers are, however, noting thefirst green shoots of recovery.Large newspaper publishers arereporting that the rate of ad rev-enue decline is slowing and thatreal estate and motor vehicleadvertising is improving.
Recruitment is not, however,perhaps because many recruit-ment ads have migrated to theInternet.
The prognosis is crucial toprint because most is related toadvertising volumes in one wayor another. Further corporationsare questioning the value ofbroadcast advertising with manythat have backed the World Cupdisappointed so far. Few havegone as far as Italian televisioncompany RAI which has threat-ened to sue Fifa over the mannerof the country’s failure which it
says will have a major impact onrevenues.
Within WPP, more than halfits money comes from below theline activity including public rela-tions and direct mail. Some ofthese areas have suffered morethan advertising. Corporatebranding projects and PR activityhave been hardest hit.
The group’s reaction has beento cut costs, specifically the num-bers of people it employs. Lastyear it sliced almost 9% of its jobsleaving 51,000 working for thecompany.
The only areas for growth havebeen in information manage-ment and consultancy whichhave expanded 6%. Overall in thefirst five months of the year, saleswere down 2%[email protected] brief� WPP gloom at speed of recovery� Changes predictions� US papers seeing some benefits
WPP offers bleakmedia outlook
PrintchainprogressBy Sasa JankovicPrinting.com’s preliminary resultsfor the year to March 31 2002 showa reduced pretax loss for theperiod.
Chairman George Hardie says:“[Printing.com] has continued tomake excellent progress in its sec-ond year, with significant advancesbeing made towards our aim ofestablishing Printing.com as thepre-eminent supplier of printingneeds to small and medium sizedenterprises throughout the UK.”
Turnover was £5.6m (2001:£3.85m) which resulted in a pre-tax loss of £776,000 (2001:£1,191,000). Trading results fromthe 14 company operated storesshow rolling 12-months averagesales continuing to improve.
The company’s franchisescheme is also making progress.The first deal was concluded inJanuary with The Color Co whichbought a franchise for six of itsoutlets. A further 18 franchiseshave since been sold to otherfirms so that Printing.com nowhas a network of 38 outlets com-prising company-operated storesand franchises.
In June 2001, Printing.comundertook a limited cash raisingexercise through a placing of 1.73million ordinary shares at 18p pershare to realise £312,000 and inApril 2002, raised a further£1,025,000 (after expenses of£100,000) through an Offer forSubscription, resulting in 5.627million ordinary shares at 20pper share being issued.
Mr Hardie says: “We remainon target to achieve our objectiveof having 175 outlets by Septem-ber 2005 and I am pleased toreport that our unaudited man-agement accounts for the firsttwo periods in the current finan-cial year showed a small pretaxprofit, compared to a pretax lossof £148,000 for the same periodlast year. We look to the futurewith increasing optimism andconfidence.”[email protected] brief� Printing.com cuts losses� Excellent second year� Confident of bright future
The British Chambers of Com-merce says a referendum on thesingle currency is close and is urg-ing its 135,000 SME members tomake preparations, in case thevote backs a currency switch.
The organisation has teamedup with the Royal Bank of Scot-land to release a Euro FitnessGuide which was published lastMonday. The guide details the pos-sible impact of the new currencyon various company departments.
It recommends that busi-nesses assess computer systemsand start pricing products andservices in euro rates as well assterling. The BCC says com-panies following the guide wouldavoid rushing the changes at thelast minute.
BCC president Anthony Gold-stone says: “Small businesses areunderstandably reluctant to
spend substantial sums ofmoney on preparing for thepossibility of UK entry into Euro-pean monetary union.
“However there are steps thatbusinesses can and should takenow that will save them money inthe long run and minimise anyrisks of not being ready in time,should Britain decide to join.”
The guide’s release comes asan ICM poll was published,showing that euro enthusiasm inthe UK might not be as strong aseurophiles had hoped. Accordingto the survey, just 4% of Britonsopposing the euro have visitedthe euro zone since January andreturned with a changed [email protected] brief� Euro referendum alert from BCC� Firms urged to be prepared� New booklet details possible impact
Be alert for euroreferendum: BCC
US tax manprobesScitexThe US Internal Revenue Serviceis to open an investigation intoScitex’s federal income taxes forthe years 1992-96.
The two have been in negotia-tions with regard to an audit of theUS operations and Scitex hasalready made advance paymentsof $21.5m on account for the auditperiod and has agreed to partialassessment of $10.6m of incomeduring the period.
Now the IRS is proposing toassess a further $29.6m of federalincome taxes, an amount whichwith state income taxes and inter-est would almost double. For itspart, Scitex plans to dispute theissues raised by the [email protected] brief� Scitex federal taxes investigation� Audit of US operations� Scitex plans to dispute IRS issues
RIP for RIPRexam Image Productshas finally been sold byRexam,completing itsexit from the graphicarts.RIP,which makessubstrates and coatingsfor wide format printing,has been bought by SunCapital Partners of BocaRaton,Florida,and willbe renamed IntelicoatTechnologies. Intelicoathas 800 staff in sixfactories in the US andoffices in Europe andAustralia.Tom Dickieremains as the Europeanmanaging director.
Hill Brossell-offNorthcliffe Newspapershas agreed to buy thenewspaper publishinginterests of Hill Brothers,Leek,Staffordshire, for£350,000 subject toapproval by the DTI.TheHill Brothers Grouppublishes the Leek Post& Times,Cheadle Post &Times and Uttoxeter Post& Times plus a weeklyproperty guide.
Croda quitssectorChemical group CrodaInternational is shedding150 jobs with the closureor sale of five factories inYorkshire,Staffordshireand Leicestershire.Thefirm is withdrawing fromthe solvent recovery,varnish media and textilechemicals market, tofocus on its oleo-chemicals business.
UBM is‘robust’United Business Media,parent company ofPrinting WorldpublisherCMP Information,updatedshareholders ahead of itsinterim results,saying itsperformance has been‘robust’.CMP saysrevenues in the US were inline with its plannedassumption for the year of40% down against ‘record’levels in 2000.
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legal notices
AD
VIC
EBusiness
GROW-HOWBusiness
From Paul Holohan & the team at
Richmond Capital Partners Limited
Tel: 0207 636 5491
Facsimile: 0207 436 8954
Email: [email protected]
Web: www.richmondcapitalpartners.com
I own a £1 million turnover printing businessand recently had it valued with a view toselling. I have spent 25 years of my lifebuilding it up and was very disappointed (tosay the least) with the valuer’s opinion. Whatshould I do next?
This is a common situation and is really aboutmanaging expectations.
The expectations of yourself, and others in asimilar situation, are to provide a reasonable sumfor your retirement by selling the business. Thisis fair enough but you should also consider theposition of the new owner. Should they overpayto fund your retirement?
The key to this situation is to:-� Plan ahead.� Understand the basic principles of valuationmethods (a good adviser will explain this in easy-to-understand terms).� ‘Groom’ your business for sale. This can addreal value.� Only use a valuer with formal qualificationsand industry experience.� Have your business valued every 3 years or so.
Many owners relate the valuation to their needsbut it is unrealistic to ask or expect a buyer totake on your:-� Overdraft� Hire purchase commitments� Mortgage� Liabilities
Furthermore, at present your business appears tobe making losses and leaking cash so it does notrepresent a great buy to a would-be acquirer.
Whilst this may seem brutal, it is an honestappraisal of your situation.
Your choice is actually quite simple. Either:-� Sell the business now at a fair price.Remember an industry specialist could help youto find a buyer keen on your goodwill to boostthis price.or� Groom the business with professional advicefor 1/2/3 years. This can deliver excellent resultswhen supported by industry specific advice.
You should be able to sell for much more than atpresent as you should have paid off debt andimproved profits. (This should have beenexplained to you by the valuer).
Your position is not good at present but if you feelup for a challenge you should be able to do muchbetter.
Apologies for the brutal, but honest, truth!
The author accepts no legal responsibility for the advice given.Comments and advice given in this column do not necessarilyrepresent the views of Printing World.
GREATEXPECTATIONS
M E R G E R S • A C Q U I S I T I O N S • D I S P O S A L S • J O I N T V E N T U R E S
Printing World|July 1 2002|15
Compulsorywinding upThe following case is due to beheard at Liverpool DistrictRegistry, Queen Elizabeth II LawCourts, Derby Square, Liverpool� Southern Graphic Services Ltd75a High Street, Fareham,Hampshire on July 15 at 120am.Petition by HM Customs &Excise
The following case is due to beheard at Manchester DistrictRegistry, 184 Deansgate,Manchester� Eclipse Envelopes Ltd Unit L,Broad Lane Industrial Estate,Cottenham, Cambridge CB48SW on July 8 at 10am. Petitionby Empire Castiglioni Ltd
The following case is due to beheard at the Royal Courts ofJustice, Strand, London WC2A2LL� SMS Howards Labels Ltd Unit 1,Kelpatrick Road, Burnham,Slough SL1 6BW on July 10 at10.30am. Petition by SurreyLaminators Ltd
Appointment ofliquidators� J&L Composition Ltd Typesetter.Liquidator: R Sadler and GEBlackburn, Begbies Traynor, 30Park Cross Street, Leeds LS12QH� Microdot Visual CommunicationsLtd Graphic design company.Liquidator: HJ Sorsky, Sorskys,Gable House, 239 Regents ParkRoad, London N3 3LF� Purple Patch Ltd PR andmarketing agency. Liquidator: R Valentine, Valentine & Co, 4 Duncastle Court, 14 ArcadiaAvenue, London N3 2HS� Swift-Sure Print Ltd Printer.Liquidator: GL Down, BNJackson Norton, 14 Orchard
Street, Bristol BS1 5EH� DHJ Media (UK) Ltd Projectionadvertising. Liquidators: FCSatow and PJ Long, PFK, NewGarden House, 78 HattonGardens, London EC1N 8JA� Vogue Packaging Ltd Apackaging business. Liquidator:P O’Hara & Co, Wesley House,Huddersfield Road, Birtley,Batley, West Yorkshire WF17 9EJ� Wizard Publishing Ltd Magazinepublisher. Liquidators: PS Dunnand SR Thomas, TenonRecovery, Sherlock House, 73 Baker Street, London W1U6RD� Profile Creative CommunicationsLtd Graphic designersconsultants. Liquidators: DMWalker and ME Fergusson, BKRHaines Watts, Park House, ParkSquare West, Leeds LS1 2PS� Benhay Ltd Print services.Liquidator: P Weinberg, MarksBloom, 60-62 Old London Road,Kingston upon Thames, SurreyKT2 6QZ� Turner & Earnshaw LtdBookbinding and finishing.Liquidator: A Poxon, DTECorporate Recovery &Insolvency Services Ltd, 24 Wellington Street, St Johns,Blackburn, Lancashire BB1 8AF�The Atlantis Ink Co LtdManufacture of inks. Liquidator:J Taylor, The Old Exchange, 234 Southchurch Road,Southend on Sea, Essex SS1 2EG� John Jennings (Printers) LtdPrinting. Liquidator: N Price,Moore Stephens CorporateRecovery, Beaufort House, 94-96 Newhall Street,Birmingham B3 1PB
Appointment ofreceivers� 24.7 Colour Ltd (previous nameof company Cornbrook PrecisionColour Ltd). Joint AdministrativeReceivers: MT Getliffe and DE
Hull, CLB, 14 Wood Street,Bolton BL1 1DZ
Meetings ofcreditors� Atlas Design Ltd at HKMHarlow Khandia Mistry, The OldMill, 9 Soar Lane, Leicester LE35DE on June 25� Pigeon Sport Publications Ltd atGerald Edelman BusinessRecovery, 25 Harley Street,London W1G 9BR on July 12 atnoon
Notices tocreditors� Charisma (Stationery &Envelopes) Ltd (t/a PersonalityEnvelopes) Creditors to sendclaims to J Taylor, BegbiesTraynor, The Old Exchange, 234 Southchurch Road,Southend-on-Sea, Essex SS12EG by July 26
Final meetings� Colour Graphic Proofing Ltd at43-45 Butts Green Road,Hornchurch, Essex RM11 2JX onJuly 19 at 10.30am� Buzzword Group Ltd at PannellHouse, 159 Charles Street,Leicester LE1 1LD on July 1610.15am� First Team Publishing Ltd at 40-42 High Street, Maldon,Essex CM9 5PN on July 18 at10am for members and at10.30am for creditors�The Sphere Print Group Ltd atBaker Tilly, Barclays House, 41 Park Cross Street, Leeds LS12QH on July 30 at 10am formembers and at 10.30am forcreditors� Hunter Screen & Display Ltd atNo 1 St Swithin Street, WorcesterWR1 2PY on July 22 at 10.30aml Just Ink Ltd at 24 Conduit Place,London W2 1EP on July 25 atnoon
The Government has beenwarned that plans to transformOrdnance Survey into a publiclimited company might be as dis-astrous as the change in status ofthe Post Office. The advice not toalter the position of the OrdnanceSurvey comes from a sub-com-
mittee of MPs. Its report says:“Basing the evolution of Ord-nance Survey on the Consigniamodel could prove a dangerousmisjudgement.” OS’s future lieswith providing mapping infor-mation in electronic format forcustomers with specific needs
and it has begun to develop in thisdirection, while retaining itsprint and conventional publish-ing business.
The Government’s proposalsare aimed at ending inefficienciesand providing it with the freedomto manage its own destiny .
‘Consignia’ fear for the OS
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