As we head into 2021 - and the next Widthwise poll of UK large-format PSPs - now is a good time to reflect on what key print company bosses had to say about doing business in this shape shifting sector at out first ever WIdthwise Live webinar this autumn.
Growing turnover, reducing costs and diversifying the large-format print offering - those were the three key themes of our first ever Widthwise Live initiative, conceived as a physical event in what was the 13th year of our annual Widthwise poll of the UK and Ireland’s large-format PSPs, but which ended up being a virtual programme of talks for obvious reasons. We did two Widthwise surveys in 2020, for reasons just as obvious - one pre-coronavirus at the start of the year, and another in the summer following the first lockdown - and from those polls we extrapolated where the sector’s main focus lie in the short to mid-term. So, for those of you who missed out on the insights provided by our illustrious panel of speakers, here’s a précis of the key takeaways from the three print bosses who took part, in the hope they help you in 2021.
As the first presenter Will Tyler explained, Octink was purchased in January this year [2020] by the Paragon Group and now operates as a subdivision of Service Graphics - a move he admits was somewhat fortunate timewise.
“The percentage of our turnover - around £18m last year - that was directly large-format print was in the region of £11-£12m. Octink is primarily dedicated to serving the property industry in the South East, but back in 2019 we were noticing a margin squeeze within this industry, and an increased amount of competition. We wanted to be in a position to tell a property developer they could literally order the same things in Scotland as they could down in Cornwall, something that would allow them to have consistency. The risk to us of doing what needed to be done was simply too great, so to buddy-up with somebody like Paragon, which is cash rich and with desires to build a much bigger large-format company, fit well with our own desires for expansion. With Paragon, and through Service Graphics, we’re currently in the process of setting up offices in Glasgow, Skelmersdale, Chippenham and Taunton - and probably other places.
“That Paragon is a particularly acquisitive company is important on other levels too. They have bought another four companies [more since this interview] during the Covid period. With the increased sales exposure that Service Graphics gives us, we see opportunities to continue to grow. Looking forward, we remain optimistic - new customers are coming to us on a daily basis. We’re taking on work in areas that we’d not have done so before because we are supported by other companies in the group and take on each other’s overspill were it makes sense to do so.”
Being part of a bigger family is also key to Richard Courtney’s optimism about Gardners, a £30m, 100 staff business based in Cardiff that was founded in the early 1970s and bought out of administration by Courtney and James Morris in 2012.
“Last year [2019] we decided the time was right to become part of a larger group because even as a then £12-13m business we still felt like a cork on the ocean some days. It felt that to grow, we needed to be part of something bigger and better. So, we are now part of the £65m group of Hexcite companies owned by Elaghmore. The reasons for deciding to go that route are similar to those Will [Tyler] mentioned - it was really all about being able to build revenues.
“The ideas I have about building revenue are certainly not the only ways of doing so. I’m not sure they’re even the best ways, but we do have a plan - and I think that’s probably the most important thing,” he said, explaining that Gardners “focusses on four main sectors - retail and POS, fleet, OOH and events/venues - which have served us well over the last few years, but it’s fair to say that Covid hit us like a hammer. We lost £1m of work in the first few days of March 2020 - quite a lot to a company turning over £1m a month!”
Surprised by how quickly that work was replaced with mainly Covid messaging work, mainly for retail, and mainly for large grocery stores, and supported by the Government furlough/job retention schemes, Courtney said the company “ended up having a Covid period that was actually quite successful, but I’m not sure what the second phase of Covid will do to the business. Whatever happens, having a growth plan is essential and we base ours on four pillars.
“The first pillar is what I call systematic and consistent new business development activity. Our new business team is fully segregated from our key account management team, and we have a strong marketing programme. We have a 90-day rolling plan for social media and digital marketing so we know what is going out when, and we’re following that up constantly with report going to board level. This has one goal - to deliver warm and qualified leads to the new business team. We manage the programme through a client relationship management tool called HubSpot, which does cost us a few quid but is very worthwhile. On top of this, we are putting together a Hexcite proposition that will support the separate group company programmes and brands.
“Pillar two is automation and capital investment. We are finding that speed to market is vital to winning new business. So improving the digital workflow is high on the agenda and we have a £2m cap ex plan in terms of IT and automation, and for new production and finishing machinery over the coming year.
“Pillar three is differentiation and diversification. The Hexcite proposition will be useful here, being able to offer the group’s expertise across various areas. We also are taking time to remind our clients - who continually pigeon hole us - that we can do other things. We are really trying to cross-fertilise.
“We are focussing quite a lot too on sustainability. We have a green promise to our clients that we will try to offer green alternatives where available. There’s still a price premium for that, but it’s going to be increasingly important. We’re also trying to acquire niche products and niche licenses. Agrippa, a fleet signage system, and ReActivair, a nitrous dioxide eating coating, have been very successful for us. We’re finding that once we get talking about these products it gives us an opportunity to talk to clients about what else we can do.
“Pillar four is commercial control. It’s very easy to fall into the busy fool trap and win work at low margin. We’ve been there and have worked hard to get out of that kind of market and mindset. It’s vital to understand cost and margin at the top table - and not leave it to the sales team and estimators. We escalate all cost and margin sign-off to as senior a level as we can without sacrificing speed to market. And we have daily sales virtual meetings with the commercial teams to understand opportunity, and risk, in real terms.
Stuart Maclaren of Your Print Partner (YPP) honed in on that pillar three point - diversification - pointing out that the company started as a specialist large-format textile printer, doing work for other print firms and for a number of years did really well at it because it was an early adopter of digital print kit in that sector. But then things needed to change.
“YPP was doing great during the summer when there were large sporting events etc, but the winter months were very quiet, so in 2014 we launched a brand called Santa Sacks which was probably where our first diversification came,” said Maclaren. “Santa Sacks was an idea to fill the kit during that time, and it really took off with us getting 40,000 orders over the Christmas period.
“We run 13 3.2m textile printers, three 1.8m printers, have two ovens, two cutters, and have about 47 staff onsite, and we’ve grown to that because of the diversification we’ve undertaken. We look at the capacity we have, at what we can do differently from others, and go from there.
“In 2019 we diversified again with Custom Gifts [online personalisation service]. It was launched to focus on the B2C market rather than the B2B business we’d been at the start. There are a lot of companies that do personalisation, but its largely about adding a name or a photo to a product, and that wasn’t the market we wanted. We wanted to add major brands to the personalisation offering so we’ve signed licenses with the likes of Warner Brothers to produce personalised products using over 50 of their major assets like Scooby Doo, Harry Potter etc. We saw the value in that so we’ve since signed up over 60 football clubs, and the value of having their official branding and items go out in that official packaging is really key.
“It’s meant a lot of work and investment. We’ve had to develop API feeds into the clubs’ retailers for instance - so if you go onto the Arsenal FC website you can buy a personalised towel, the order for which comes directly to us. The only way we’ve been able to do this, and reach the volumes and turnaround times requires is, as Richard [Courtney] said, by having the systems in place. It’s really not about price - it’s about someone thinking: ‘It’s my partner’s birthday tomorrow. I want to order a gift online now and have it arrive on the birthday.’
“It’s all about filling the machines with work that will pay. Back in March things did look scary with Covid but we did OK out of it because we had a set-up that meant we could get new products out to market quickly - things like branded hand sanitiser units etc.
“We have been hit by cancellations of orders like everyone - especially since events and sports events thought things were going to get up and running again, only to be told they were being put back on ice. So the B2C online part of the business is where we’re being successful at the moment. We’re still using the same equipment, just for new markets in effect.”
Videos of all the Widthwise Live presentations can be found in full at: www.imagereportsmag.co.uk/image-reports-videos