Annual report 2005 - Xeikon

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OPERATIONAL REVIEW
Turnover for the year to 31 December 2005 increased
by 46% to €153.2m (2004: €105.2m). Of this, €49.9m
was generated by the pre-press activities, and €103.3m
by the digital printing activities. The split between
equipment and consumables sales was 57% / 43%.
Operating profit for the period was €21.5m (2004:
€13.6m), an increase of 58%.
Profit before taxation rose by 68% to €18.5m (2004:
€11.0 m). Earnings per share were 13.32 euro cent
(2004: 8.84 euro cent), an increase of 51%.
At 31 December 2005, net assets amounted to €96.0m
(2004: €54.2 m) including cash and deposit balances
of €30.0m (2004: €5.1m).
In the year to December 2005, market conditions
were positive, due principally to the rapidly increasing
number of applications for digital printing and
continuing progress in the acceptance of computer
to plate pre-press procedures. This market growth has
also been driven by the replacement of first generation
computer to plate machines with new improved
products. As at December 2005, Punch Graphix’s
installed base was in excess of 2,700 machines.
Pre-press solutions
Pre-press activities saw strong growth throughout the
year, with an increase in sales of 84% to €49.9 million,
compared with €27.0 million last year.
Customer interest in basysPrint’s Computer to Plate,
based on UV sensitive plates technology remains high.
Our sales teams are also receiving positive market
feedback on the newly launched scrolling capability,
which avoids the interruptions characteristic
of the traditional exposure techniques, resulting
in a faster and more stableprocess and new lens filters,
which improve the lifetime of the DMD processors.
Both enhancements to the Group’s offering were
launched during 2005.
In May 2005, the Group extended its OEM agreement
with Agfa for the manufacture of CtP (computer to plate)
machines until 2009. The Group accepted a reduction in
margin in exchange for greater levels of long-term cooperation;
the initial impact of which were seen in the
second half of 2005.
In aggregate during the year, the pre-press division
- basysPrint and the agreement with Agfa - substantially
increased the number of machines manufactured by
over 58% from 249 units in 2004 to 393 units in 2005.
During the second half of 2005, basysPrint continued
to transfer sales and servicing capabilities from third
party dealers to the Group’s newly expanded in-house
organisation. The benefits of this are expected to be
realised during 2006 and beyond.
Digital printing solutions
Sales of Xeikon digital printing equipment and associated
consumables, in particular the Xeikon 5000 launched in
February 2004, have been strong throughout the year,
resulting in sales of €103.3 million (2004: €78.1 million).
The number of units sold increased 39%, from 80 units in
2004 to 111 units in 2005.
In the US, the appointment of a new General Manager
to oversee both the sales and servicing operations has
reinforced the operation and helped generate very
encouraging results, despite competitive pricing
pressure. The Xeikon 5000 remains one of the leaders in
its market, in terms of quality and speed.
The balance between the first and second halves of
the year reflects both the expected seasonality, and the
strong contribution from a number of high margin rental
contracts in the first half.
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