Grafenia warns FY earnings will likely be significantly behind market views

Shares in Grafenia fell by almost a fifth as it confessed to a cautious outlook and warned its full-year earnings would likely be significantly behind market views.

"Although we are making progress with our transformation plan, a material part of our revenues continue to come from transactional print volumes," the company said.

"Soft demand in January and early February will impact our full year earnings and it is likely we will be significantly behind market expectations. We remain cautious on the outlook," it said.

Manchester-headquartered Grafenia added that the inconsistent nature of transactional print volumes, noted in November last year, had continued.

"November and early December performed in line with our internal budgets. However, print volumes in January and early February were materially behind the same period last year, albeit recovering to expected levels last week," the print business said.

"Although overall, our print volumes are higher than the same period last year but the effect of our earlier price realignment in a fiercely competitive market means we are paid less for each print order."

Grafenia said that as the trade print price war continued, it needed to remain competitive and "do not expect margins from the sale of printing to improve".

The company's network of neighbourhood Nettl web studios had continued to grow, recently passing an important milestone of reaching 100 Nettl studios in the UK and Ireland.

At 11:28 GMT, shares in AIM-listed Grafenia were down 18.03% to 6.25p each.