Managed print specialist M2 Digital swallowed a sales and profit decline in FY11, but claims changes to its operating structure and delivery model leave it in good shape for 2012.
Accounts recently filed with Companies House reveal that the Mancunian VAR saw sales for the 12 months to 31 March 2011 decline almost five per cent annually to £29m. Operating profiting was down about a quarter on the preceding year to £1.8m.
The directors' report for the year explains that M2 made numerous changes to tighten up the business and position it for future growth.
"The year was progressive for M2, with the business transitioning to a managed print services national business," says the report. "During the year M2 selectively invested in several IT projects that strengthened its capabilities in managed print services, the benefits of these [are] expected to materialise in the next financial year."
M2 claims to have won "several major national contracts" during FY11, all of which were for more than five years and required hefty upfront investment but will provide "significant revenues" in the years to come.
The VAR also "outsourced several key areas of operations during the year" which it believes will minimise future capital investment and provide a "scalable business model".
The fruits of such operational tweaks are seemingly already being borne in the company's key performance indicators, with both debtor and creditor days coming down over the course of FY11. M2 was collecting money owed in 27 days during the year, compared with 35 in FY10. Creditors were being paid in 62, as opposed to 74 days.
The directors' report business review closes on an upbeat note about the managed print market as a whole and M2's standing in it.
"The current and forecasted economic environment provides a continued growth stimulant for managed print services, as the key benefit is cost reduction and process efficiency," says the report. "The new financial year has started well and the business remains on course to achieve its targets and deliver results in excess of those for [FY11]."
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