RNS Number : 5386E
Litho Supplies PLC
22 December 2009
Litho Supplies plc
Trading in the printing industry has been very difficult over the last two years with many printing companies going out of business and as one of the largest independent suppliers to the industry we have suffered many bad debts both in numbers and financial value.
The loss of those customers has had an adverse effect on the level of sales particularly in the last twelve months with a reduction in excess of 20% on turnover but throughout this difficult period we have actively been reducing the cost base of the business.
Reducing the cost base of the business does in itself put cash flow pressures on the business with redundancies and monies being paid in lieu of notice.
Due to the difficulties within the printing sector the major credit insurers have withdrawn cover from the sector and a number of our suppliers decided that it was then appropriate to reduce our credit terms again affecting the cash flow of the business.
One of the bonus factors within the sales side of our business has always been the sale of capital equipment but since the banking crisis it has been almost impossible to obtain finance facilities for customers who wanted to buy capital equipment.
The indications in quarter 3 of this year were that some green shoots were starting to appear but the increased level of interest did not live up to expectations although it appeared that results for the second half of the year would be better than the first half.
Towards the end of November 2009 we incurred a further raft of bad debts together with a further tightening of our credit terms from some of our suppliers which put the company into a position of having to take advice and to ask for a suspension in the trading of shares.
During the second half of 2009 we held discussions with HMRC regarding an arrangement to pay VAT arrears over an extended period; to date a payment arrangement has not been agreed.
Contact:
Michael Hammond, Litho Supplies plc, 01332 873921.
This information is provided by RNS
The company news service from the London Stock Exchange
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