IR talks to… Gary Peeling, CEO, Precision Printing

What would you describe at Precision’s core areas of expertise to date, and why have you decided that now is the time to re-engage with large-format?
Historically Precision is a company that provides marketing communications to large corporates. We have various print technologies and in the last ten years I’d say the business has grown around digital sheetfed with the HP Indigo machines. In the last five we’ve focused on on-demand applications, like photo-books and other print-on-demand consumer applications. To support that we developed some unique software - our OneFlow system – that allows us to process Web-to-print orders completely automatically. So there are two sides to the business, one that deals with marketing communications and brands, and we’re also a production hub for a lot of the leading online consumer print brands.

With regards to wide-format it’s an area of business that I’ve been looking at for some time. It’s clear to me that most of our customers use wide-format and display products and so we’ve been looking for a way to enter the market, not just by buying a machine at entry level, but by gaining some expertise. I think it’s quite naive to think we can walk into a market that’s so mature and compete without that expertise, so getting involved with a company that actually understands the market really well is interesting.

In terms of the bigger picture as to why – I love display and wide-format. We have a big rebranding campaign currently at Precision, which is ‘Digital Loves Print’. Essentially, the mission is to excite people about printed media. We’ve been in this building for ten years, and many of our customers today were just starting secondary school then. Those people don’t fully understand the power of print so we’ve got to surprise and delight, and when I look at wide-format and display - I call them our passing fancies - it’s a great way to demonstrate the power of physical media, at an event or in-store, wherever it might be displayed. It’s a great way to show everybody what great visual design can do. And if we can capture interest there we can move them through to other printed products, so there’s a great synergy there. I see, in a lot of ways, display being the ambassador of physical printed graphic communication.

At the time of the First2Print deal, you said it would allow you entry into online and offline wide-format markets. Can you elaborate?
For a long time Precision has been supporting other online shopfronts and our expertise in that area is robust. What we’ve never had is our own storefront, and what we’ve got through the First2Print investment is the ability to be able to utilise WhereTheTradeBuys. This provides probably one of the only UK-based online print portals where you can buy everything from digital print, sheetfed offset, wide-format and all the items in between.

Although there are lots of very large players in Europe – like pixartprinting that we previously partnered with – there aren’t many significant players specifically in the UK market. Although still embryonic, WhereTheTradeBuys has found a magic combination. It’s combing the convenience of an online shopfront with traditional account handling and support. We have 3,000-4,000 customers already, so the ability to be able to expand its product range is really interesting. So, rather than starting from zero, we’re able to start in large-format with a model that’s already working. We’re planning to relaunch that website in July, with more products and easier to use, and using our OneFlow system to control those on-demand orders.

And what about YourWalls.co.uk?
YourWalls.co.uk is a really exciting start-up project – something the team has been working on for 12-18 months. We’re taking the basic wall design software that is available from HP and integrated it using their APIs into our website to provide personalised wall coverings for, probably, three groups: consumers, say wanting their own images to decorate a child’s bedroom; prosumers/interior designers, who want to post their designs online and have them printed on-demand rather than hold stock; and interiors in the B2B market, where it sort of falls back into Precision’s customer market. I think we’ll see the use of personalised wallcoverings developing rapidly in the future so it’s a good place to be.

You have said First2Print - who’s executive team will remain in-situ - will trade under the Precision brand for offline activities. Will we see much change to how that site operates?
No, the team up there are fantastic. Husband and wife team Martin and Donna run the business, which has grown really quickly, and they know exactly where they need to take it. Our role is to provide support and investment to help them grow further and to leverage Precision’s brand and product base.

So First2Print, the B2B brand where there’s face-to-face exchange, has been rebranded as Precision. As well as the wide-format kit at Sunderland, there’s also some offset equipment and we’re moving some of our digital HP Indigo kit up to the site too so they can better support clients on same day projects. And it means we can use the site to better support our legacy customers across the UK. As I’m now understanding there is business north of Watford!

Does it need more investment?
We have quite an extensive investment programme because the main reason for our involvement with First2Print is to accelerate growth. We have taken the unit next door to that Sunderland site which will double its space. That will house a HP Indigo 7500 on the sheetfed side, and we’re also looking at tripling the wide-format space and production output. We’re looking at products from Durst to do that. We’re also looking at creating a lean environment there. That will all happen by the end of spring - the rest of the investment is around the redesign, relaunch and marketing of both online brands.

At Precision in Barking, the focus is on more automation – case binding for hard-backed/lay-flat books - and as we process up to 60,000 online orders a day here at peak times, which we pack by hand and can employ 120 people, we’re looking at an automated packing line before the next peak season. And prior to next peak season, we’ll probably expand the HP Indigo installation at this site.

The focus for wide-format will be Sunderland, and the offset and digital sheetfed here in London.

To what level do you expect First2Print - and associated online services - to boost Precision’s turnover in 2015?
In 2014, the turnover of First2Print was just under £2m and our target is to double that in 2015. At Precision, the turnover in 2014 was just over £15m. As a group I’m hoping we’ll turnover around £20m in 2015. I think the two online brands will contribute about £2m to turnover by the end of next year.

How does this latest move fit in with Precision’s ‘Charms’ approach to providing integrated print solutions?
We have a range of unique products, called ‘Digital Charms’, which basically combine software and print to execute unusual marketing solutions for our customers. It’s all about exciting people about printed media. We don’t want to talk to them about what we print things on, because guess what, they’re not interested! And we don’t want to talk to them about how we do it for the same reason. What we really need to talk to them about is outcomes. I think we’ll see Charms coming through specific to the wide-format business. The most exciting one in that area currently is ‘Mobiliser’ – image recognition for mobile phones. It allows us to put image scanning technology – no QR codes or clumpy like that – into customers’ own apps so we can bridge the space between the physical and digital space. And it comes back to that ‘Digital Loves Print’ philosophy. We know we have to interact with the digital world and finding ways to do that more effectively is really what we’re looking to do over the next five to ten years.

You have previously said that collaboration is Precision’s business philosophy. It had a, now defunct, partnership with Italian online giant Pixartprinting a couple of years ago, with Precision printing most UK orders here in the UK, but not those for wide-format. Was that just a space issue – or is there a bigger message there?
It was always the plan in that joint venture for us to invest in wide-format here. Our role was really to speed up UK delivery and provide UK-based customer service. It worked very well – we grew the market and learned a great deal. And we’ll take a lot of those learnings into WhereTheTradeBuys. That relationship ended only because of the investment strategy that was taken in Italy.

One of the things that was clear from the model in Italy was that wide-format on-demand requires you to be close to the customer – shipping wide-format panels across Europe has huge challenges! We have those challenges within the UK too, but they can be managed – and it’s one of the reasons for our interest in WhereTheTradeBuys. How do you get panels from Sunderland to a customer in London? We’ve solved that challenge.

Although we’ve got some way to go to be the size of pixart, it demonstrates that the possibility is there for it to be done.

In terms of collaboration, how did you come across the First2Print opportunity, and should we expect to see Precision moving in on other collaborative projects?
Yes, collaboration is central to what we do – and it’s connected to my involvement with Dscoop, where I’m global chairman.

I think we’re going to see the collaboration economy in general becoming a really interesting space. Look at something like Uber for example, which has completely disrupted the taxi scene by using under-utilised resources – the print industry has plenty of those – and improving the customer experience too. It’s about talking to others about what you can do together. It's the way business is going to be done in the future. I think the Cloud, automated workflow, new technology makes it so much easier than it was before to connect. And the exciting thing about it is that by creating new solutions together we can potentially open up new markets.