December 12 2013 Latest news:
Duncan Brodie, business editor
Tuesday, October 1, 2013
Marketing services and printing group St Ives today reported a 10.7% increase in underlying annual profits despite a dip in revenue as it continued to realign its business.
St Ives, whose printing division includes Bungay-based book printer Clays, said profits excluding restructuring costs and discontinued operations totalled £26.8million in the 53 weeks to August 2, up from £24.2m the previous year.
Revenues fell by 3.2% on an underlying basis, from £327.4m to £317.0m, and by 2.0% in total, from £329.5m to £322.7m, but bottom line pre-tax profits still came in 10.5% ahead, at £7.1m against £6.4m.
St Ives has spent the last three years expanding its higher margin marketing services operations, which now account for around 35% of group operating profits, and exiting low-margin commodity print operations.
This process was effectively completed on Monday this week with the sale of its direct response business, following previous disposals involving magazine, corporate report, CD/DVD insert and direct mail printing.
The group has also been acting to increase profitability within its continuing print businesses which, apart from Clays, largely consist of marketing print.
In the year to August 2, the print division saw underlying operating profits dip by 3.5% to £19.7m on underlying revenue down 9.8% at £253.0m.
Clays accounted for 28% of print revenue, with books revenue down by 5% compared with the previous year at £71.3m, although St Ives said the business had maintained its market share.
In the marketing services division, underlying revenue grew by 36% to £64.1m, boosted by both organic growth and two further acquisitions, with underling profits 89% ahead at £7.6m.
Group chief executive Patrack Martell said: “Our marketing services segment has hit its target of contributing over 30% of the group’s operating profit, on an annualised basis, ahead of plan, and now generates more operating profit that the entire group four years ago.
“In addition, we have significantly improved the overall performance of our retained print businesses and will continue to selectively invest in them to broaden the offering and maintain their market leading positions.”