Sector review: Print

Print Sector Review infograhic

 

Welcome to the Close Brothers Asset Finance review of the Print sector. In this article we highlight a wide range of issues relevant to SMEs in this industry. 

The results are based on the Close Brothers Business Barometer (conducted in August 2017), a quarterly survey of close to 1,000 SMEs across the UK and Republic of Ireland conducted by specialist independent researcher, GMI on Close Brothers’ behalf. 

Where relevant, comparisons are made with national sentiment. 

The commentary in this review focuses on: 

  • Economic conditions   
  • Where business owners go for financial support and advice 
  • Culture of slow payments 
  • Impact of the general election
  • Customer data and their rights 
  • Apprenticeship schemes 
  • Conducting business online

 

Economic conditions

Print Sector Review - trading conditions

Nearly three in every four (73%) Print SMEs expect their business to perform the same as it did in the previous 12 months with 13% expecting to expand against 3% predicting  contraction. Seven percent say they will close their doors for business before the end of 2018. 

Of those surveyed, 23% feel trading conditions have improved over the past 12 months and 57% are of the view that things are no different to last year while things have become worse for 13%. . 

“The sentiment of the Print sector closely matches that of the SME community across the UK,” said Roger Aust, Managing Director, Print division at Close Brothers Asset Finance.

“While business is improving for many, it isn’t necessarily translating into growth, as evidenced by the figures. Something else we’ve picked up on is that unlike some sectors, access to finance is not a problem or an issue.”

 

Where business owners go for financial support and advice

For SMEs in the Print sector, the most popular source of financial support and advice was their financial advisor (30%) jointly followed by their accountant and bank manager (23%). Nationally, friends and family were the first port of call (24%) for assistance.  

“Many businesses have a long-established and trusted relationship with their financial advisors, who have an objective understanding of a firm’s performance, and they are able to provide the kinds of insights not available elsewhere,” said Roger. “Despite there being a large number of family-owned companies in our sector, friends and families were not high on the list for advice.” 

Where do you mainly go for financial support and advice? 

 

National

Print

Accountant

21%

23%

Bank Manager

13%

23%

Finance Advisor

15%

30%

Friends/family

24%

7%

Online

16%

17%

Other

7%

0%

Peers

2%

0%

Solicitor/lawyer

2%

0%

 

Culture of slow payments

Over two fifths (43%) of Print companies are affected by slow payments, compared to the national average of only 34%, while a remarkable 83% feel that current legislation does not support  SMEs to counteract slow payment by debtors. 

“Late compensation is a real problem for firms in our sector with 73% of firms going so far as to say that there is a culture of slow payments in the UK,” said Roger. “And 17% of firms have been forced to seek legal advice because of the issue, which is stressful and time consuming.

“This is no small matter because the the consequences of slow payments are multiple, ranging from damage to the supply chain and business reputation to the ability to access further funding.” 

 

Impact of the general election

The large majority of Print SMEs (87%) have not noticed an impact on business levels following the recent general election. 

“Elections can be disruptive and sometimes bring with them an element of uncertainty,” said Roger. “Some businesses benefit more than others but it appears that for most the effect was negligible this time around.”

Despite the lack of impact on organisations, a big majority of 87% say that that they have no appetite for another election any time soon, and furthermore, 70% of Print firms do not think that another election would benefit the UK. 

“The prevailing view seems to be that the UK needs to press ahead to end the uncertainty, regardless of the political landscape,” said Roger. “Set against these results is the understanding that only 23% of sector SMEs are of the view that the lack of a majority government will help the UK when negotiating Brexit.”

Post Brexit and election sentiment is - for over a quarter (27%) of Print businesses – lower than it was before these two events. Only 16% are more confident with the remaining 57% feeling ‘the same’. 

“In line with national sentiment, Print businesses are more pessimistic than they were two years ago,” said Roger. “This continued disruption is having an effect, despite the record employment in the UK.” 

 

Customer data and their rights 

Print Sector Review - GDPR

Only one third (33%) of printers truly understand what ‘personal data’ means, while 17% answered that they did not; the remaining 50% were unsure of its meaning. 

“Keeping customer data secure is becoming one of the key issues of our times with the new General Data Protection Regulation (GDPR) coming into force in May 2018,” said Roger.

"It’s vital that businesses of all sizes understand the rights customers have when it comes to collecting and utilising their personal information, because currently only one in four (27%) SMEs in our sector understand customers’ new extended rights and another 50% don’t have the right levels of permissions to contact their customers under the new requirements of the GDPR.”

Just 3% of Print firms share their customers' personal data with 3rd parties while 20% are ‘unsure’ if they do or not; the remaining 77% are adamant that they do not. When asked if they have a process in place to ensure they are collecting data in the correct manner, 53% either did not or were unsure. 

“The GDPR’s definition of personal data makes it clear that even online identifiers, for example an IP address, can be personal data,” explained Roger. “The new definitions provide for a wide range of personal identifiers to constitute personal data, reflecting changes in technology and the way organisations collect information about people.

“This example shows just how detailed the new regulations are going to be and it’s incumbent on business owners to understand what this means to them.”

 

Apprenticeship schemes

Print Sector Review - apprenticeship

According to 83% of Print SMEs, apprenticeships are all or part of the solution to the UK's skills gap. Firm owners also strongly believe that apprenticeships are a viable alternative to university, with 80% of business owners agreeing with the statement ‘apprenticeships are a valuable alternative to university’. 

“Skills shortages have made headline news recently and it’s clearly an issue that SMEs feel very strongly about,” said Roger.

“Many businesses are very concerned about where their next cohort of skilled workers is going to come from and the answer, they feel, is more apprenticeships.”

Just over two fifths (23%) of Print companies have their own apprenticeship scheme while 53% say it’s not right for their firm; the remaining 24% cite lack of affordability as the reason why they don’t have one of their own.  

“Clearly, not every business has a need for an apprentice; however, the fact that for many it’s simply too expensive shows that more needs to be done,” said Roger. “Close Brothers has long been a supporter of apprenticeships, with two schemes currently underway in the Print and transport sectors.”

Nationally, 49% of business owners answered ‘yes’ to the question ‘if assistance was available either from either the government or the private sector, would you participate in an apprenticeship scheme?’. In the Print sector this rose to 57%. 

 

Conducting business online

Print Sector Review - online

Over half (57%) of firms conduct some form of business online with 30% having seen growth in online trade, although in 47% of cases it was limited to less than 20%; only  7% of firms saw more than 80% expansion of online business.

“60% of those surveyed felt that online will play an increasing role in coming years,” said Roger.

“For many companies, especially those at the smaller end of the spectrum, there will continue to be a reliance on traditional channels to get their product to market.” 

 

 

About Close Brothers Asset Finance

We offer a range of flexible funding options including hire purchasefinance leaseoperating lease and refinancing to UK SMEs. Contact us today to find out how we can help you. 

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