Product category:
General Print Supplies, Services for Printers
News Release from: The TripleArc Group
Edited by the Printingtalk Editorial
Team on 16 September 2004
Moving In To Profit As Print Management
Grows
Reporting on the first six months of its current trading year, Triplearc revealed that its gross profits have increased five fold to £6.03m, with pre-tax profits of £0.67m.
Reporting on the first six months of its current trading year, Triplearc revealed that its gross profits have increased five fold to £6.03m, with pre-tax profits of £0.67m, compared with a loss of £0.25m for the previous period The company's cash generation has cut its net debt to £15.39m (compared with a debt of £17.49m in December 2003), whilst gearing has dropped to 62 per cent from 72 per cent at the end of 2003
This article was originally published on Printingtalk on 22 Jul 2004 at 8.00am (UK)
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Jason Cromack, Triplearc's chief executive officer stated: "We are pleased with the group's first half performance.
The strategy of setting up a dedicated contracts team has already borne fruit, with several major contract wins in the first half.
We expect to see the full impact of these wins in 2005.
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The integration of Access Plus has gone well with the half-year results reflecting the performance of the enlarged group.
The Group is now firmly a leading player in the print management sector.
Furthermore with a healthy pipeline of potential contracts, we believe that we will deliver increased shareholder value over the coming months." Group revenues increased by 236 per cent to £24.03m (June 2003 - £7.15m).
Gross profit during the previous period (June 2003) was £1.08m.
The increase in turnover and gross profit were mainly attributable to the Access Plus group, which was acquired in November 2003.
Net cash inflow from operating activities for the six months ended 30 June 2004 was £3.33m (2003 - £0.05m).
During, the half-year the Group repaid £1m of acquisition finance on schedule and also took the opportunity to make accelerated payments of a further £0.60m.
The Group had attracted about £20m of print management outsourcing (PMO) contracts in the last six months with the acquisition of Access Plus Plc enabling the Group to provide what it believes is one of the most complete print management services in the UK.
The Group believes it is exceptionally well positioned to capitalise on the increasing number of (PMO) contracts that are being put out to tender by companies wanting attractive, cost effective responses to non-core activities.
The contracts gained in that sector are for companies such as BAA, Matalan and BMI Healthcare and range from one year rolling contracts to five year fixed term agreements.
Triplearc said that it is in the nature of such contracts that they required significant management time to win and implement and could involve financial investment to set up.
Typically there can be up to a six-month delay before they contribute to Group profitability.
As was recently announced, the Group has been awarded preferred bidder status for another £multi-million PMO contract and expects to soon conclude final negotiations.
In addition to its PMO activities, Access Plus brought with it a team of highly motivated sales staff focused on delivering print buying services to clients for specific products, such as direct mail and security products.
Although those activities are less structured than PMO contracts and more susceptible to the competitive pressures that are prevalent throughout the print industry, it is thought that many of those customers will be receptive to a full PMO solution once they are introduced to the diversity of the service offering and the Group's enhanced scale of operations.
In the meantime, the business is performing well in very tough market conditions, albeit that there is some decline in the forms business.
The first half of 2004 has seen the deployment of the Group's proprietary technology, CWS (Collaborative Workflow System) across its print management division and its suppliers, and the rollout of new enterprise accountancy software.
The technology will create additional capacity within its existing overhead and the full benefits of this are expected to be evident during the first half of 2005.
The Group believes its technology products, CWS and edit2print, place it at the leading edge of print procurement technology in the UK.
In the meantime, Triplearc's partnership with Hewlett-Packard continues to deliver new opportunities said the company, whilst following the company's attendance at Drupa in conjunction with HP, it is in the final stages of discussions with a number of major print service providers to licence the edit2print software.
The agreement with Four51 to distribute CWS in the USA is a key part of the future growth strategy for Triplearc technology in the vast US market.
It is already showing early signs of success with contracts having recently been signed with two print management companies, including Pathforward, a business unit of Standard Register, one of the largest print groups in the US.
In the UK and Europe, Triplearc's CWS network now has over 225 suppliers connected to it, with more being connected on a continuing basis.
As CWS gains further momentum it is expected to deliver a recurring technology revenue stream from the system.
The group believes it has shown a significant improvement in the quantity and quality of its earnings stream.
The trend is expected to continue as the company moves away from ad hoc print supply towards longer term print management contracts and substantial contract wins provide the foundation of long-term sustainable revenues.
The investment and rollout of an improved infrastructure throughout the Group will provide the basis for maintaining continued growth in the future.
The Board said it will continue to seek further consolidation opportunities in the print management sector in addition to 'bolting-on' businesses, which will expand its services.
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