Interim Management Statement

    RNS Number : 7004U
  Litho Supplies PLC
  19 May 2008
   

    Litho Supplies Plc

    Interim Management Statement

    19 May 2008

    Since the beginning of this financial year we have seen a slight decline in the sales of our core litho products which confirms the
challenging market conditions in the printing sector in the UK.

    The impact of more difficult access to funding has caused some of our customers to delay orders for equipment which again has slowed
down sales in the last few months. As a result margins on equipment sales have been under pressure.

    The current lack of confidence in our market and fierce competition has resulted in a number of customers going into liquidation and the
level of bad debts has been higher than anticipated with the obvious effect on profitability.

    On 24th January 2008 we acquired the whole of the issued share capital of Payrite Services Limited and its trading subsidiary Graphic
Arts Equipment Limited ( GAE ) and the remaining 49% of the share capital of Shinohara (UK ) Limited.

    Business at GAE has exceeded our expectations during the period since the acquisition and this, together with new business generated
from Graphica Plus Limited trading as Andersons, which we acquired on 23rd October 2007, has enabled us to increase our turnover by over 13%
in the first four months of this year.

    As part of our ongoing reorganisation on 31st March 2008 we amalgamated our business in the West Midlands with our Head Office at
Breaston, near Derby  as a result of which we have reduced the number of people employed by 12.

    The effect of this together with the benefits of the reorganisation of the Andersons business will come through in the second half of
the year.

    We are relocating our central administration and accounting function at Bristol to the Head Office in Breaston later this year and Mr
Gerry Mitchell, our Finance Director, will be leaving the business when this takes place and in an agreed orderly manner.

    The installation of our new computer system is progressing in line with our plans so that there is no disruption to the business at any
of our branches.

    At the end of April 2008 we exhibited under the Andersons name at Sign Digital UK at the NEC and there was a lot of interest in our new
wideformat equipment and consumable products.

    We will be following this up with representation on several of our major suppliers stands at the forthcoming two week Drupa exhibition
in Dusseldorf at the end of May 2008.

    Contacts:

 Michael Hammond, Chief Executive, Litho Supplies Plc  01332 873921

 John Wakefield, Blue Oar Securities Plc               0117 9330020

This information is provided by RNS
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