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Grafenia upbeat on strategy despite ongoing headwinds
Graphic arts systems company Grafenia updated the market on its trading on Friday, reporting that since its last update, trading had been mixed.
The AIM-traded firm said it had continued to experience headwinds with transactional print.
Wholesale prices for print had continued to decrease, despite increasing costs of raw materials.
Volume and margins in its trade divisions were below budget in December and January and were sharply down in February.
Grafenia said that, while there was oversupply and discounting in the market, it was difficult to see that trend changing.
"However, we have been executing our strategy to become less reliant on these print volumes," the board said in its statement, adding that it was making progress.
"A greater proportion of our revenues now come from licence fees, signage and website sales."
Grafenia said it was "scaling", adding that it anticipated its full-year 2018 revenues to be just under £15m - around 40% higher than last year.
"As a result of revenues being slightly behind management expectations and weaker print margins, we expect our EBITDA and pre-tax loss for the year ending 31 March to be around a similar level to last year," the board said.
"We expect net debt to be circa £2.85m at the year end.
"We generate healthy levels of cash through our operations and we forecast that to continue."