Grafenia plc Pre-close statement and Trading Update
RNS Number : 4973H
06 April 2022
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the UK Market Abuse Regulation.
With the publication of this announcement, this information is now
considered to be in the public domain.
6 April 2022
("Grafenia" or "the Company" or the "Group")
Pre-close statement and Trading Update
Since our last update on 22 November 2021, sales have continued
to improve. Each month has traded better than the previous year, as
each round of restrictions has been lifted.
In December and January, there was uncertainty about whether
restrictions would be reintroduced. Some exhibitions and events
were postponed, affecting business confidence. March saw a
significant bounce back. Many of those events have returned or been
rescheduled for the summer. Total sales in March were the highest
recorded since November 2019, before the pandemic.
We expect to end the full year with sales in excess of GBP12.0m
(2021: GBP9.65m). Whilst this isn't back to pre-pandemic levels,
our cost base is significantly different and our breakeven point is
much lower. We generated positive EBITDA in 8 of 12 months this
year. After negative EBITDA in 2021, we expect full year 2022
EBITDA to be positive and to have a smaller loss before tax than
the previous year. Cash at 31 March 2022 was GBP1.5m (2021:
However, like most businesses, we have faced cost rises across
the board. Paper has increased by 30-50%, due to distribution
costs, shortages and energy. We have increased our prices three
times in 2022 to reflect this. Fuel and energy prices remain at
high levels and are not helped by global events. This situation
impacts everyone. We continue to track competitor pricing and
nobody is immune to these pressures.
Our partner network has remained stable in what have been
turbulent times. It's always sad to lose partners, but compared to
the sector at large, our network has proved resilient. We have
continued to add new Nettl partners in the UK and US. At the year
end, we had 220 Nettl partners (2021: 232) around the world.
Partners often tell us that being part of our network has helped
navigate these difficult times. The board would like to thank our
partners and acknowledge their stamina and efforts.
Each of our business units performed better than last year. In
particular, our company stores continue to progress. We expect
sales to be up by 40% at approximately GBP2.56m (2021: GBP1.83m).
In the second half of 2020, we rolled three businesses into our
Birmingham and Dublin company stores. If we exclude them this year,
we expect like-for-like sales to be up 20%.
The pandemic caused many businesses to reflect on what the
future should look like. For us, we used the time to invest in our
platform. We have been working on a digital transformation
programme to improve the sign and install industry.
We successfully launched our "WorksThing" app at the Sign &
Digital exhibition in March. Optimised for the signage sector,
WorksThing.com is a complete workflow tool for managing signage
installations, from start to finish. It's Software-as-a-Service,
like Nettl. Sign businesses pay a monthly subscription, from GBP49
per user per month. Their installers can connect their calendars to
provide online booking, like reserving a table at a restaurant.
Each install is mapped on a live timeline, so everyone can keep
track of progress. A modern chat messaging system connects clients
with studios, production and install crews.
It's early days, but multiple businesses have signed up for a
free trial and we're pleased with the reaction at the event. We
expect that some WorksThing clients will become Nettl partners, as
they seek to get more from every client relationship with the Nettl
We're cautiously optimistic about the upcoming year. We remain
focussed on achieving our mid-term goal of 10-15% EBITDA. Our
search for software businesses continues. We hope to update the
market with more detailed progress shortly.
For further information:
Peter Gunning (CEO) 07973 191 632
Allenby Capital Limited (Nominated Adviser and Broker)
David Hart / Liz Kirchner (Corporate Finance) 0203 328 5656
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