The company attributed the fall in pre-tax profits to “significantly increased non-recurring expenses” relating to the acquisition of rival web-to-print firm Goodprint UK, in November last year, and the subsequent closure of the Goodprint facilities and transfer of operations into its sites in Newcastle and London.
Underlying operating profit saw a modest 6% increase to £1.62m (2012: £1.53m), including a £230,000 contribution from the acquisition of Goodprint, which fell short of company expectations.
Revenues for the group, including marketing agency Tangent Snowball, Printed.com, Tangent On Demand, and the company’s Newcastle printing division Ravensworth, were up almost 12% to £24.3m (2012: £21.72m).
Of this, Printed.com contributed £3.95m, with sales growth increasing by 99% boosted by the integration of Goodprint, including the brands of Goodprint and Smileprint. Between 13 November 2012 and 28 February 2013 Goodprint contributed £1.2m in revenue. The company said that with its loyalty scheme tie-up with Avios, signed in March this year, and a high level of returning customers, Printed.com was making a consistent profit.
Sales for Tangent Snowball meanwhile declined from £10.8m in 2012 to £10.65m while revenues at printing arm Ravensworth slid 7% in line with market decline to £6.25m.
The company said that any spare capacity in its Newcastle facility was being used by its retail websites. Additionally the firm has reviewed its work for the estate agency market and plans to migrate all templates online so that estate agents can place orders online for a broader range of products.
Tangent On Demand, the company’s on-demand digital print service, showed strong growth with sales up 5.2% to £2.24m. The company said that the increase of higher margin products on a range of substrates improved the competitive edge of the business with gross margin expected to improve further through 2013 and 2014.
The board proposes a final dividend for the year to 28 February 2013 of 20p per share (2012: 20p). If approved at the company’s AGM shareholders will be paid on 2 August.
Chief executive Timothy Green said the year had been “transformational” for Tangent. “Our retail websites printed.com and goodprint.co.uk now generate a large proportion of our sales and profits. We aim to capitalise on our position in the UK market and gain a greater share of the European markerts we now service,” he added.
Green said that Tangent was entering the new financial year with clear “vision” and an exciting business proposition.
He added: “Tangent will grow as our online customers buy from an expanded range of products on printed.com and goodprint.co.uk. We will continuously optimise our websites to acquire and convert customers more efficiently.”