Grafenia's sales improve 'significantly' but remains cautious

Shares in AIM-listed Grafenia Group tumbled over 11% on Friday as the web and print supplier said sales in September had improved “significantly” but remained cautious after trading in July was below last year’s level.

In an update for the six months ended 30 September, the company said trading immediately following the EU referendum at the end of June was difficult, but the improvement since the summer and the increase in the number of partners for Nettl and printing.com, means,“provided trading continues to improve, market expectations remain achievable”.

Due to the “fierce” competition in the trade print sector the company adjusted the pricing of its products shifting from multiple discounted offers to everyday low pricing, which resulted in an 14% increase in the volume of orders produced in the UK and Ireland during the first half of the year, compared to last year.

The company refreshed the printing.com subscription model to attract 20 new partners with a pipeline of potential new locations.

Nettl, the company's neighbourhood web studio formula for graphic professionals has 80 partners and it expects to grow the network further from the upgrade of existing printing.com partners and from its online trade channel Marqetspace’s client base.

In October, the company relocated the Nettl Studio in Birmingham to a new site to pilot a business store format, which combines the sale of ecommerce, websites, print, displays, and a meeting space for local businesses to build a 'department store' for SMEs.

During September, Marqetspace set new records for the number of orders processed, average order value and the volume of ink-on-fabric product sold.

The company said that it is currently in early talks with several potential acquisition opportunities.

Shares in Grafenia were down 11.11% to 9p at 1159 BST.