Tom Giessler, chief operating office of German parent STI Group, told ProPrint that the difficult market conditions and costs of restructuring meant he was not surprised about the poor results, which included a 223% drop in profits.
The 12-month annual report, lodged with ASIC, covered the 2011 calendar year. In the same period, the German parent posted revenues of €320 million ($390.2 million).
Giessler said he was confident about the future after STI Lilyfield “significantly” increased its point-of-sale business in 2011 and installed new gluing technology at its Padstow site in mid-June.
“This equipment in conjunction with the training from German experts closes the last gap to a fully integrated and flexible display production,” he said.
“Furthermore, we invested in additional IT equipment, which will give us possibilities to drive any digital service,” added Giessler.
STI Lilyfield acquired the 10,000sqm Padstow site in 2010 when it bought the assets of high-profile Sydney printer Pettaras Press out of administration.
STI Lilyfield’s 2011 financial report revealed after-tax losses of $4.3 million – a 223% year-on-year deterioration from 2010.
The company also recorded a 3.2% fall in revenue to $27 million, despite spending 5.7% more on raw materials and consumables and 10% more on employee costs.
The difference between STI Lilyfield’s total assets and its liabilities declined from a $1.5 million surplus to a $2.4 million deficit, mainly due to a 24% rise in total liabilities.
The company’s auditor, Kevin Cranfield of Bentleys NSW, said the net loss and the capital deficiency indicated “a material uncertainty which may cast significant doubt about [STI Lilyfield’s] ability to continue as a going concern”.
However, Cranfield said he expected the German parent to “financially support the company as required” and noted that the company was projected to return to profit.
Giessler said the return to profitability was “happening just now”.
He also told ProPrint that STI Lilyfield was delivering increasing value to its customers through innovation, lean management, more efficient technology and a Chinese presence that guaranteed the quality of products coming out of that country.
STI Lilyfield, which was formed when STI Group acquired Reg Hammond’s Lilyfield Printing in 2009, represents about 6% of the group’s international revenue, said Giessler.
The group appointed a new Australian head in March 2012 when former Hannanprint general manager of operations Graham Trickey replaced outgoing STI Lilyfield managing director Ian Kingham.
At that point, Trickey said STI Lilyfield was “a business that is very challenging and needs some direction and leadership and that’s what I’ll give it”.
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