TIDMGRA
RNS Number : 2520F
Grafenia plc
16 May 2017
The following amendment has been made to the announcement titled
"Pre Close Trading Update, Board Changes And Notice Of Results"
which was released on 10 April 2017 at 7.00 a.m. under RNS
9949B:
The announcement stated that: "The Board expects full year
results to be in line with revised market expectations for revenue,
EBITDA and net cash." The text should have been as follows: "The
Board expects full year results to be in line with revised market
expectations for revenue and EBITDA and net cash at bank to be
GBP0.52 million."
All other details remain unchanged. The full amended
announcement is shown below.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
GRAFENIA PLC
(THE 'COMPANY' OR THE 'GROUP')
PRE CLOSE TRADING UPDATE, BOARD CHANGES AND NOTICE OF
RESULTS
Trading
Grafenia plc (AIM: GRA) announces that, since our previous
update released on 21 February 2017, trading conditions have been
mixed. Transactional print revenues in February ended behind the
same period last year. However, revenues from print in March were
strong, significantly ahead of both our internal budget and the
same period last year.
The Board expects full year results to be in line with revised
market expectations for revenue and EBITDA and net cash at bank to
be GBP0.52 million. This year the effect of revising the useful
economic life of software & capitalised development from five
to a more prudent three years is expected to increase amortization
by GBP150k for the period. Consequently, whilst we expect EBITDA to
be in line with market expectations, we expect EBIT to be below
them.
We are delighted to report that we have more than doubled the
number of our Nettl studios to 108 in the period, which is more
than expected. Nettl partners pay a monthly subscription of
typically GBP399 to use our training, software and marketing to
sell websites, ecommerce, display and printing. Our sales activity
continues to attract new Nettl partners and we expect to further
significantly scale the network in the coming financial year, both
in the UK and in other countries. We have also continued to attract
new printing.com partners and have a steady pipeline of potential
new locations. As a result, we expect our licence fee income to be
ahead of last year.
Marqetspace.com, our online print channel for graphic
professionals, has continued to grow and has transacted with over
2,800 clients to date. March set new records for total revenue,
total gross margin, average client order value and spend, and the
number of new clients placing their first order. Marqetspace
remains our main source of new Nettl and printing.com partner
talent.
We manufacture and sell 'ink-on-fabric' exhibition displays and
soft signage via Marqetspace and our printing.com and Nettl
partners. Ink-on-fabric display sales in March exhibited strong
growth across all channels, with a record number of orders and
overall revenue 40% higher than any other month.
In January, we acquired ADD Signs, our first signs business. The
integration is progressing well and the revenue generated has been
ahead of forecast. We are targeting further value accretive
acquisitions in this and other sectors, to both scale our Nettl
network more quickly and grow value for our shareholders by
acquiring complementary businesses.
Board Changes
Pavel Begun has announced that he will retire from the Board at
the AGM in July.
Peter Gunning, CEO of Grafenia plc said "On behalf of the Board,
I'd like to thank Pavel for his contribution and perspective over
the years. From a personal viewpoint, I am particularly grateful
for his support and guidance since I took over as CEO."
The Board also announces that, following the resignation of the
previous Chairman in August 2016, and interim rotations, it has
appointed Jan Mohr as Chairman with immediate effect. Jan joined
the Board as a Non-Executive Director in March 2016.
Peter Gunning commented "It's been a year since Jan joined the
Board. In that time his challenging insights have added significant
value to our thinking. We look forward to working with him more
deeply in his new role as Chairman."
Jan Mohr, Chairman of Grafenia plc said "I am delighted to take
on the role of Chairman to assist Peter and his team with the
ongoing transformation effort. A lot of things are in flux at
Grafenia, but change is leading towards a simpler, more focused
business model centred on our brand partners. Every transformation
comes with risks and uncertainty, however my belief in the future
of Grafenia is founded on the embedded quality of the team, their
hard work and relentless drive to exceed our customers'
expectations. In addition, we have significantly improved internal
controls and planning capabilities to pursue rational and
opportunistic redeployment of cash-flows. Following Pavel's
departure after the forthcoming AGM, we have decided that we will
reduce the number of non-executives to two, including myself, and
to reduce the compensation we receive by 25%."
Share buybacks
Each year the Board seeks shareholder consent at the Company's
AGM to make share buy-backs within certain parameters and intends
to do so at the next AGM. Since 2008, the Company has, in
aggregate, purchased 2.76m shares and presently holds 2.1m shares
in Treasury.
The Board has established an enhanced forecasting process that
models different scenarios of cash generation. Based on this
analysis, an internal valuation of the Group is derived. The Board
will use this model on an ongoing basis to determine whether share
buy-backs represent good value and are an appropriate allocation of
capital at any point in time, subject always to complying with
relevant rules and regulation. If the Board decides to utilise the
shareholder authorities to carry out share buy backs, that
intention will be announced to the market.
Notice of results
The Company expects to report its Preliminary Results for the
year ended 31 March 2017 on Wednesday 7 June 2017.
For further information:
Grafenia plc
Peter Gunning (CEO) 07973 191 632
Alan Roberts (Finance
Director) 0161 848 5713
N+1 Singer (Nominated
Adviser)
Richard Lindley / James
White 0207 496 3000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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