06 September 2019 Print Companies

A view from the bridge: the Integrity story from forms to many forms

Shifting the direction of a business that had flourished when printed forms were in the primacy, is not an overnight task. It is one that Integrity has undertaken with the new businesses picking up the strain and becoming the growth drivers.

Mark Cornford keeps a tidy desk. There are two neat piles of paper, a computer monitor, a calculator and his glasses. The office is almost as spartan, a few photos of his family, a cricket team that Integrity has sponsored and an aerial view over the site in Midsomer Norton, occupied by Integrity, the company Cornford bought in a management buyout in 2008. Otherwise the walls are empty and neutral, there is a utilitarian carpet and lots of space. Cornford is clearly not interested in the trappings that appeal to many chief executives.

This minimalism is in contrast to the factory which is teeming with equipment producing labels, direct mail and millions of forms. There are not as many business forms as in the heyday of the carbonless business form set when the company was known as Ken Stokes Business Forms. This was before a series of takeovers led it to become a subsidiary of Communisis. And then in 2008 to the management buyout that Cornford led.

At that time the site was generating sales of around £60 million, £13 million of that from Communisis alone and £20 million from computer listing papers. At one time there were robots to make this thriving operation as efficient as possible. Now demand has all but disappeared, the wonder being perhaps that there is any demand for listings paper at all. The robots are idle.

Add in the decline in multi-part business forms, the loss of work for Communisis and other changes in the market and in all Integrity's markets have shrunk by millions of pounds of business in ten years. The markets it served with distinction have disappeared. Cornford was ready for this. When he first joined the company in 1999, “I was told that ‘this is a business that makes buggy whips’ as a warning that the opportunity was short lived,” he says. “I knew the risks.”

He went into the management buyout with his eyes open, not railroaded into a deal that suits the seller but can hobble the buyer. Cornford knew what he would have to do, that costs would have to be cut and that the sectors it served were changing fast. Integrity would need to change faster.

It would have to add new services to replace those in decline and to do so with higher margin work. Some areas of the factory remain as busy as ever; some are quiet. But Integrity continues to process 60 tonnes of paper each day. There has been and continues to be attention to costs, but the impact of the changing work profile is less than it might have been. Cornford prefers to work with the 370 employees on the site rather than in conflict with them.

“The people are everything,” he says. And after 20 years as part of the business he is aware of its importance to the people that work there and their families and takes satisfaction in providing employment. He says: “I’m quite controlling and paternalistic, loyal to the people and I expect it in return.” He is also direct, adding: “I have been standing on pallets briefing people directly when times have been tough. It’s about being better, faster, stronger. They know the way I feel about the business and the people and they know how much I fight for them.”

It is not about walking around talking to people all the time. “I don’t get involved in the day to day,” he says. “I’m the captain of the ship – the heartbeat of the business.”

It is a ‘we’re all in this together’ culture that has transferred to the shop floor. “If a particular machine is quiet, the press operator will go and do something creative rather than polish the machine,” Cornford says.

As captain on the bridge, one of the piles of paper represents the navigational charts used to steer the company. These are the details of companies that Integrity or its CEO might purchase. “Ninety percent of my time is looking at business. I reckon I will look at 10-12 a year and buy one or perhaps two. In the case of the other eight or so, the cultural fit is not right.” Most recently this has brought medical specimen bag business Tressanda. This provides the means of moving diagnostic samples from department to department for NHS Trusts, along with the printed form or label that identifies the sample and patient.

Integrity has moved two specialist finishing lines to Midsomer Norton along with the staff to operate them and a sales manager who knows the products and the customers. Deals like this are about bringing print volumes into the plant, where the skills and equipment might cross pollinate with what already exists. For example, Integrity also provides NHS Trusts with print means so there is a clear crossover opportunity.

Sales director Andrew Law says: “This gives our clients the opportunity to source a wide range of products more effectively through a single supplier. Our business strategy is to diversify our print offering, enabling us to add more value to our clients.”

He has had the responsibility for replacing the diminishing sectors with new types of work that uses the existing machinery and skills. But not always. Integrity is now a significant label printer with start up breweries on the roster, but the majority of labels are strictly functional and there is a close connection to traditional forms. Is a delivery note stuck to a courier delivered box an address label or a form for example?

Integrity produces these by the million, supplying one of the country’s leading online retailers with return forms for consumers to use when sending back goods that do not fit or are the wrong colour.

And now there is a focus on expanding the transactional print operation, with big plans for redevelopment and investment. And equally big expectations for the revenue transactional will bring in.

This is part of the continuing development of the business as it sheds the low margin commodity work in search of more lucrative sectors where Integrity can earn a better margin. Cornford reckons that there is £20 million of this older style work that needs still to be replaced. And once that is done “it’s all gravy,” he says.

“When I bought the business in 2008, we were a £60 million turnover company. We are still, but the work that made up the turnover we had then has shrunk to £20 million and we have replaced that with £40 million of new work. At the time we were also a 100% trade printer. We still do 65% of sales to the trade, but we now have a direct sales force,” says Cornford.

Trade work includes jobs for print management companies that could not place jobs while the company was part of Communisis. These will now trade with Integrity for forms and door drop style work. The label printing business has grown to £7.5 million and growth is accelerating; transactional print brings in a similar amount and is also on a steep growth path; security print has grown from £3 million in sales to £14 million. The target is to turn each of these into £20 million turnover operations.

“These three engines are the future,” says Cornford. “It is about growing them while managing the decline in the legacy business. Each shares a common culture.” The legacy work includes printed pay slips as well as computer listings paper, products that most other companies have moved away from.

There is also a shared approach to achieving sales. Integrity is creating a direct sales force which is still in its formative stages. More interestingly, there are a number of customer facing niche print management consultancy businesses sitting above the production facilities. These provide direct services to customers with complex needs: say a housing association that needs to communicate with tenants both as individuals and en masse, or a charity or organisation that needs to send members communications, invoices and matched identity cards.

The ultimate buyer is dealing with people that understand his or her issues, who can propose innovative ideas and solutions not tied to filling specific production capacity. This is about re-engineering established products to improve how these brands and buyers communicate with their end customers. This consultancy approach attracts a far greater margin than running presses.

Work is naturally directed to the factory, though not exclusively so. And should demand for a certain type of product grow, the factory can invest with reduced risk. And offer the service to a different set of customers.

For example, one part of the 16-acre site produces parking tickets for a London borough council, each a secure document in itself. This leads on to connections with the Licensed Cab Drivers Association, and now Integrity is delivering membership badges to London’s black cab drivers, each matched to details of the qualified and registered taxi driver. In turn this is the foundation of the print and data services a members’ association needs.

This type of work is complex and is handled by Membership Plus, one of three specialist print management businesses that fall under the corporate umbrella. Others specialise in the social housing sector and security print.

“This is not about someone just buying and selling print. It’s offering a service to companies that do not want or lack the expertise to do this themselves,” says Cornford. The small volume plastic card unit is sure to become a higher volume machine as demand increases for membership cards or redeemable gift cards.

The company aims to build this type of work with Integrity providing as much of the print and mailing requirement as possible. Another example of this comes with degree certificates issued by universities. The university used to deploy its own desktop printers to personalise the base certificate with the name of the graduate. It was cumbersome as students, in particular from Sri Lanka and other parts of Asia, might have names longer than the space allocated to them, resulting in wasted time, resource and a sometimes compromised result.

This has been changed to an online portal where the university can proof each certificate online. The customer saves time and aggravation and the printer is ensured a trouble-free file which is then printed to the approved base stock and given the correct seal to validate it.

This is the sort of value added approach that is prevalent through the business now. But at the point of the management buyout, there were more pressing priorities, Law recalls. “No print management company could trade with us while we were part of Communisis,” he says. “Immediately we were independent we could work with print management companies which meant for a couple of years we got off to a flyer.”

In the long term this would not be enough, nor would a strategy of waiting until competitors fell by the wayside. Integrity has been constantly moving developing new products and taking opportunities.

As an example of the first, it created a form for identity applications that require the inclusion of a photograph. These have been stapled to the form, affixed with a paper clip or taped in place, all of which make the form more difficult and costly to process.

Now a clear flap is lifted, the passport sized photo placed in position and the flap closed to hold the picture in place. Integrity had to work on choosing the right materials, the adhesive that would peel back and then continue to hold a photo in place, and how it could be produced. The form instantly acquires greater value than a standard piece of static print.

Shortly after the MBO, Integrity took the chance to buy Topflite, a label company that had hit the buffers. Integrity brought its equipment to Midsomer Norton. It is now occupying part of the factory identified as Label Land (the production hall for forms is called Forms Force), and with two Xeikons and flexo presses, and finishing lines. The labels area is set apart from the rest of the plant and has been awarded BRC certification to handle food labels. A second acquisition brought short run specialist Alliance Labels which remains in Cardiff and can provide some level of disaster recovery for the main factory as well as serving its own customer base. And also in 2016, Integrity bought the assets of Coleborne & Partners, including a second Xeikon and GM finishing line, when the print division was closed down.

Investment in labels continues: a second ABG finishing line was purchased last year and runs 24 hours a day, spitting out rolls of printed labels and a new Edale flexo press with fast makeready technology addresses longer production runs.

Labels has grown from a £1 million when Topflite was acquired to more than £7.5 million today. If it achieves the growth that Cornford wants it will become a £20 million operation. Integrity will then be a top ten player in label converting in the UK.

And where printed forms have been lost to the online version, packaging is largely safe from digital substitution. “When you walk around a supermarket in 20 years’ time, there will still be printed labels,” says Law.

So far the company has grown organically in transactional print. The existing operation is built around Xerox Versant and Nuvera mono and Sedona continuous feed machines and a Riso ComColour. Standard mailings are joined each afternoon by Clarity Mail, the company’s brand for its hybrid mail offering. It has expanded to send out 30,000-40,000 packs a day timed to be sorted for maximum postal discounts. Today this generates sales of £2 million a year from what was a standing start.

Law says: “We had started with an Océ continuous laser printer when we were part of Communisis, explaining that because we were producing cheques it was needed as part of secure site registered to produce cheques by APACS. It led us to start to build our own data handling which improved with the recruitment of an experienced data manager from Topflite.”

Transactional had grown to be a £7 million business before Chris Walton joined Integrity from DST Output in Bristol in November. “I can bring procedures, understanding SLAs, secure production from the previous job,” he says. And he brings vast experience and reputation across the sector, the sort that gives customers confidence that Integrity is serious about transactional print.

He has had an immediate impact on the business, sales have risen 35% compared to last year and waste levels have shrunk. And his profile in the industry was underlined at Hunkeler Innovation Days this year. Cornford says he was there to meet people, not understanding enough about the technology to contribute properly to discussions. Instead he could see the high regard in which Walton is held.

There were two purposes to the visit, firstly to seal an investment in a Hunkeler roll to cut sheet line together with MBO folder and Herzog + Heymann transfer unit and secondly to continue talks about investment in a high speed inkjet line.

The decision on which one of three possible inkjet presses Integrity will install has still to be made. The strategy, however, is clear as it fits with the overall aim of avoiding purely commodity print and doing something slightly different. “Transactional is growing, but we are not after huge runs from the utilities or banks. It’s about mid range runs where we can add value,” Walton says. “And the efficiencies introduced through reorganisation of the production management team are working well for us.”

Walton has already planned the installation within the factory that will house this investment. It will be self contained area, painted white with mezzanine offices overlooking the production floor. This is where what he calls the Buro Team will be housed. The training to prepare staff for Walton’s way of working and the new technology is ongoing. “Even on a slow day crews need to run at the speed they do when the business is busy,” he says.

The Hunkeler line is not necessary for transactional work, but an investment to make the most of its narrow web forms capacity by printing commercial print work for the growing door drop sector. The company is well endowed with Muller Martini and Goebel forms presses that are capable of four-colour printing. The strategy is “support the legacy product to extend the life of the kit we already have and can make it more efficient and more competitive.” It may also be ideal for producing inserts for transactional statements where needed.

At the moment the key products are flyers and leaflets that spew from the machine in folded and strapped stacks at 20,000 an hour. The Hunkeler has also been used for European election ballot papers where the number of candidates and so the length of the ballot paper changes. In six months it has already attracted £1 million of new turnover, says Law.

The greater value will come with using variable data to marry quality print and personalised print – the transpromo argument. “That never took off because until recently customers didn’t have a handle on their data. Responsibility for statement runs is held by the finance managers rather than marketing. But done well, transpromo can be really effective,” says Walton.

One area that it can be brought to bear is in social housing where the group’s print management business has redesigned newsletters and statements. “There can be much more value added using geographic and demographic splits, localised newsletters and so on to provide more meaningful messaging for the householders,” says Walton.

As much as the press and finishing equipment, investment will be in the software developers able to massage the data and to write the portals that enable customers to engage with us online.” This points the way to an omnichannel communications approach, to the archiving, to call handling, to development of apps that is part of the extended service that transactional work requires.

Cornford draws a triangle to illustrate how the three print management operations sit on top of the production equipment. The print management will design and implement complex projects in security, social housing and membership associations, staffed by experts in each field. These can generate greater margins than any print operation alone can achieve. The print value of tickets for the nearby Glastonbury Festival, for example, is dwarfed by the complexities of handling sales and ensuring that tickets get to the right people in time and with the features needed to prove their integrity.

This job joined the group with the purchase last year of a company in Derby. For Cornford though it is also a highly local job. He lives close to the Festival site and knows the organisers. “It’s a job we had to get right,” he says.

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Mark Cornford

Mark Cornford

Mark Cornford acquired Integrity in a management buyout from Communisis and has transformed a forms business into an operation with a value added focus as the traditional business areas have declined.

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Andrew Law and Chris Walton

Andrew Law and Chris Walton

Chris Walton joined the business in November 2018 to join sales director Andrew Law in day to day charge of operations. He will be leading growth in transactional printing with substantial investment in white paper inkjet planned.

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