16|Printing World|December 3 2001

finance

By Gareth WardBenny Landa, the man whosename is synonymous withIndigo, will leave the companyonce the acquisition by HewlettPackard is completed.

According to HP, Mr Landamay provide services under aconsulting agreement whichlasts for two years after the com-pletion of the deal and imposesno minimum level of effort andtime.

The details come in the S4 fil-ing to the US Securities &Exchange Commission whichexplains both Hewlett Packard’sdecision to make the offer andIndigo’s reasons for accepting it.

The filing shows a change inthinking occurred in spring thisyear. In April, Indigo’s board wasagainst any takeover by HP, eventhough the idea had periodically

been mentioned for almost fouryears. But by the end of the nextmonth, Indigo was happy to talkabout it.

Momentum built up duringJuly and August and on August31, Mr Landa met HP chief execu-tive Carly Fiorina and the dealwas accepted the same day.Within days the lawyers had com-pleted their work and Indigo hadagreed to the terms.

The last sticking point hadbeen the structure of the deal –whether shareholders should beoffered HP shares immediatelyor a higher value should Indigomeet certain financial targetsover the next three years.

These envisage an annual 33%growth rate. This seems steepalthough Indigo had already fore-cast a growth of 20% next yearand 30% thereafter.

Factors which come into playin assessing the likelihood ofachieving the targets include thefact that consumable sales havenever met Indigo’s expectationsand that the company has hadtrouble with quality control inmanufacturing. Past problemsinclude paper handling, ink cont-amination and consistency of theimaging drum.

These will be addressed by HP.Indigo had looked at a number ofways forward before agreeing toacquisition by HP. Theseincluded discussions with othercompetitors as well as continuingas an independent operation.

What swung the decision wasmarket analysis that showed thatwhile Indigo could continue asan independent company, thebenefits to working with a strate-gic partner were far greater.Hewlett Packard provides thedata mining expertise, digitalworkflow tools, design and web-based publishing tools to providethe pages to be printed on Indigomachines.gward@cmpinformation.comIn brief�What Benny Landa does next� How the HP/Indigo deal happened� What the financial forecasts are

How the Indigo-HP dealwas done in days

Benny Landa to leave Indigo

Thomas Potts, the print groupthat includes Premier Metropo-lis, has seen turnover more thandouble since its takeover of printfarmer CCS, but a managementinformation system problem eatup a quarter of its profits.

Pretax profits for the sixmonths to September 30 are£757,000, down from £1.018m ayear ago. But the six months toMarch 31 had shown profits ofjust £201,000, so Thomas Pottssays the latest results show that ithas “made a strong recovery.”

Serigraphic, Potts’ displaygraphics printer, has fared best ofall with a new managing director,Mike Cartin, in control.

All other print plants in thegroup made a profit, having“laboured valiantly in generallydull conditions,” according tochairman Stephen Hargrave.Group indebtedness is down28% to £4.34m.

The real cause of the fall inprofits was the failure of a man-agement information system atCCS, which Potts had inherited.The system miscalculated totals

in the purchase and sales ledgers,mistakes that did not come tolight until the end of March. Thetotal cost was £450,000.

Thomas Potts is firmly rootedin display graphics. This sectorhas been less affected than othersby the economic downturn.“Food retailers still have substan-tial marketing budgets,” saysgroup commercial director MarkScanlon.

Thomas Potts is still seeking tomake more acquisitions, thoughthese are likely to be in displaygraphics than in any other area.

The company looked at parts ofPhotobition before it went intoreceivership last month butdecided it was too risky to takethem on as going concerns.

“We are not getting into directmail because the sector seemssaturated and has come off theboil in growth terms. You reallyneed to have turnover of £25m to£35m or more to compete,” saysMr Scanlon. “We are always look-ing at about five opportunities atany one time.” agrant@cmpinformation.com

MIS blow to Thomas Potts

PostalproblemsPost Office parentConsignia’s first-halflosses stand at £100m,up from £20m last year,and turnover is only justrising,up by just 2.6% to£4.06bn.Consignia nowhas competition fromHays and other privateoperators,having lost itshistoric monopoly onletter delivery.But itblames its deepeninglosses on the parcelmarket,whereParcelforce has made aloss of £110m,expectedto reach £200m for thefull year.Consignia isaiming to cut costs by15%,or £1.2bn,by April2003.

Rulingsmay relaxMedia ownership rulescould be relaxed soon,aGovernment consultationpaper has signalled.TheDTI’s proposals are thatrules could be revisedevery two years, raisinghopes that RupertMurdoch’s NewsCorporation could soonbe allowed to have morethan a 20% stake in boththe television andnewspaper market.Current rules state thatone owner cannot ownmore than 20% of bothmarkets.

EuroresistanceThe euro is becomingless popular among UKexporters before it haseven gone live, researchby Bibby FinancialServices shows.Theproportion of exporterswho think that the UKshould join the singlecurrency has fallen from65% to 47% since lastyear.Those who think theUK should join now aredown from 31% to 22%.But 50% still think thatthe euro would be goodfor business,and amajority want a decisionon UK entry reachedsoon.

By Alex GrantDe La Rue has increased its firsthalf profits by 7% to £29.8m,despite a loss of £2.7m in its newGlobal Services division.

Cash Systems has fared best ofall De La Rue’s divisions, withoperating profits up by £10.2m to£14m, partly because of eurowork which accounts for about8% of the division’s volumes.

The second half has a strongorder book in both Cash Systemsand Security paper & printdivisions, despite the loss of acontract to provide paper forIndian banknotes (which hadaccounted for about 15% ofturnover) earlier this year.

But De La Rue Tapes has seendemand for security thread inbanknotes decline, and faced dis-ruption with its move to a newfactory.

“It is particularly pleasing thatthe first half has seen furtherprogress and continued strong

financial performance for a De LaRue against a background ofcontinued economic uncer-tainty,” says chairman BrandonGough.

However, Global Services, DeLa Rue’s identity and brand pro-tection sector, has made a loss of£2.7m and has seen sales fallfrom £23.5m to £19.3m.

Sales and margins have been“coming under pressure” at DeLa Rue Holographics, withproduction of holograms for euronotes delayed. This is expected toresume in the second half, how-ever.

Because of this loss, Tapes andHolographics are being mergedtogether into a new divisionalthough their production siteswill remain separate. agrant@cmpinformation.comIn brief� De Le Rue increases profits by 7%� Cash Systems unit fares best� Holographics and Tapes to merge

De La Rue profitsincrease by 7%

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legal notices

Printing World|December 3 2001|17

Compulsorywinding upThe following cases are due to beheard at the Royal Courts ofJustice, Strand, London WC2A2LL� DL Printers Ltd Station House,41 Blackfriars Road, Salford,Manchester M3 7DB onDecember 5 at 10.30am. Petitionby Inland Revenue� The Platinum Printing Co LtdSopwith Park, Royce Close, WestPorthway, Hampshire SP10 3TSon December 19 at 10.30am.Petition by Anton Graphics Ltd� Blake Publications Ltd GableHouse, 239 Regents Park Road,London N3 3LF on December 5 at10.30am. Petition by InlandRevenue

The following case is due to beheard at Cambridge CountyCourt, Bridge House, BridgeStreet, Cambridge� Euroexpo Graphica Ltd KinnardHill, 285 Milton Road,Cambridge CB4 1XO onDecember 13 at 10.30am.Petition by Jubilee Estates Ltd

The following case is due to beheard at Birmingham DistrictRegistry, 33 Bull Street,Birmingham B4 6DS� Euro Paper & Poly Ltd 89 London Road, Leicester LE20PF on December 5 at 10.30am.Petition by Majestic CorrugatedCases Ltd

Appointment ofliquidators� Print Around Ltd Commercialdesign and print broking.Liquidator: L Harris, LeonardHarris Partnership, 75 MosleyStreet, Manchester M2 3HR� Press-on-Printers (Herne Hill) LtdPrinter and bookbinder.Liquidator: DW Darrell, NaylandPartnership, North Wing,

Warlies Park House, HorseshoeHill, Upshire, Essex EN9 3SL� Proset (Wembley) Ltd Printer.Liquidator: S Grant, WilkinsKennedy, Risborough House, 38-40 Sycamore Road,Amersham, BuckinghamshireHP6 5DZ� Photobition Media LtdManagement activities, holdingcompany. Liquidators: R BaileyDK Duggins and RD Fleming,Andersen, PO Box 55, 180 Strand, London WC2R 2NT� Millennium 2000 (UK) LtdAdvertiser and publisher.Liquidator: RW Keating, RWKeating & Co, 20 WinmarleighStreet, Warrington, CheshireWA1 1JY� Total Pre-Press Ltd Previouscompany name: Total TypesettersLtd Providing compositingprinting services. Liquidator: ADConquest, Grant Thornton,Byron House, CambridgeBusiness Park, Cowley Road,Cambridge CB4 0WZ

Meetings ofcreditors� Eaton Press Direct Ltd at PKF,Sovereign House, Queen Street,Manchester M2 5HR onDecember 6 at 11am� Finchmark Ltd and FinchmarkDirect Mail Ltd at Premier Lodge,Lower Mosley Street,Manchester on December 5 at10am

Notices tocreditors� Gulliver Press Ltd Creditors tosend claims to J Taylor, BegbiesTraynor, The Old Exchange, 234 Southchurch Road,Southend-on-Sea, Essex SS12EG by January 4� Essential Screen Print LtdCreditors to send claims to JAHeggarty, Smith & Williamson,

Old Library Chambers, 21 Chipper Lane, Salisbury,Wiltshire SP1 1BG by April

Final meetings� Fellows & Clark Ltd (t/a TheRegency Press) at BegbiesTraynor, 2-3 Pavilion Buildings,Brighton, East Sussex BN1 1EEon December 21 at 10am formembers and at 10.15am forcreditors� Star Paper Products Ltd atStephen Conn & Co, 17 St Ann’sSquare, Manchester M2 7PW onDecember 19 at 10am formembers and at 10.15am forcreditors� PEK Graphics Ltd at BegbiesTraynor (incorporating TaylorGotham & Fry), The OldExchange, 234 SouthchurchRoad, Southend on Sea, EssexSS1 2EG on January 4 at 10amfor members and at 10.30am forcreditors� Hexagon Printing Ltd at DavidRubin & Partners, PearlAssurance House, 319 BallardsLane, London N12 8LY onDecember 19 at 11am formembers and at 11.15am forcreditors� Firmaco Ltd (t/a Global PaperLtd) at Mountview Court, 1148 High Road, Whetstone,London N20 0RA on January 3 at10.30am for members and at10.45am for creditors� Phoenix Paper Co (UK) Ltd atTrinity House, Heather ParkDrive, Wembley, Middlesex HA01SU on December 14 at 10am formembers and at 10.30am forcreditors

Disclaimer� Ace Bookbinders of Unit 4BFaircharm Trading Estate,Creekside, London SE8 3DXwishes to make it known that ithas no connection with Ace PrintFinishers Ltd mentioned in Legalsof November 26

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GROW-HOWBusiness

From Paul Holohan & the team at

Richmond Capital Partners Limited

Tel: 0207 636 5491

Facsimile: 0207 436 8954

Email: info@richmondcapitalpartners.com

Web: www.richmondcapitalpartners.com

Our family is in conflict. We are not even talking to each other and cannot agree onfuture direction. Tensions are damaging thebusiness and my parents are unable to resolvethe issue for fear of alienating my youngerbrother. How can we stop our differencesdestroying our successful print business?

My experience of this kind of situation leads meto believe that this is not unusual.

The most common mistake is to believe that abusiness can work like a family does. A family isinclusive and forgiving. A business, on the otherhand, has to be hard. But people let the familysystem into it – the two should not be mixed.

Recent research shows that family firms, whichaccount for two thirds of small to medium enterprises, rarely make it past the first generation. Only a third reach the second generation and just 13% the third.

More and more are now prepared to call in outside support to resolve internal difficulties.The number of firms asking advisers for help hasincreased by 25% in the past year!

A common mistake is to allow non-executiveshareholders to interfere in the running of thebusiness. Shareholders have to respect the viewsof directors who are not shareholders. They needto allow these people to get on with their jobswithout interference. A good idea is for retiringowners to surrender or dispose of their shares.This prevents the typical problem of sitting onthe sidelines and interfering.

Many firms do not have a succession plan. Theyleave it too late. If succession follows an eventsuch as a heart attack it’s normally a problem.Action needs to be taken perhaps 2-4 yearsbeforehand by deciding who the successor willbe and preparing him or her for the role.

Another common error is that of dividing ownership equally among children (as in yourcase). It is rare that treating children equallyworks – indeed it often exacerbates personal competitiveness.

Usually one sibling is managing director but,because the others have the same number ofshares (possibly with some retained by parents) isconsequently devoid of the power. The result isno strategic focus because each looks to preservetheir own “empire.”

A good solution to all of these issues can be toappoint a non-executive director which can stopdamage to the business. This brings an externalperspective and people come better prepared tomeetings, raising management standards.

Also family members don’t throw tempertantrums in front of outsiders!

Rules need to be agreed to avoid conflict. Mostimportantly you have to agree to disagree.

Confusing the aims of family and business isvery common and can be painful.

Set out the rules of the game to keep the two systems apart and consider appointing a non-executive director.

The author accepts no legal responsibility for the advice given.Comments and advice given in this column do not necessarilyrepresent the views of Printing World.

A FAMILY AFFAIR

M E R G E R S • A C Q U I S I T I O N S • D I S P O S A L S • J O I N T V E N T U R E S

Gretag managers cleared over dealingsGretag Imaging, which sold itslarge-format printer business toOcé last month, has deniedreports in European news papersthat its senior managers wereguilty of insider dealing.

Three founding shareholders,William Recker, Dr Eduard Brun-

ner and Dr Hans-Rudolf Zulligerhave revealed details of all theirshare dealings this year to provethat they have complied withStock Exchange rules.

Gretag has had a difficult year,being hit by warranty costsbecause of faults with its APS film

processing system, having to layoff 340 staff because of late pay-ments from Qualex, a UScustomer, and poor annualresults.

A first half loss of SwFr125m(£60m) followed in August.agrant@cmpinformation.com

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