Bungay: Increased underlying half-year profits for Clays owner St Ives

THE parent group of Suffolk-based book printer Clays today posted increases in underlying sales and profits for the first half of its financial year, following a hectic period of restructuring and acquisition.

Marketing services and print group St Ives reported a pre-tax profit of �11.1million from on-going businesses for the 26 weeks to January 27, up 8.7% from �10.2m in the equivalent period a year earlier, while revenues were 11.7% ahead on the same basis, rising from �149m to �166.4m,

The period included two acquisitions on the marketing side, Response One and Pragma, and a minority investment in Evolved Group, a provider of e-book conversion software to the publishing industry.

St Ives also announced the closure of its Westerham and Blackburn manufacturing sites, which printed company reports and CD/DVD inserts, as part of a “strategic repositioning” of the group.

At the bottom line, pre-tax profits fell to �2.55m, down from �12.65m at last year’s half-way stage, with the declined largely reflecting one-off charges of �8.53m relating to the restructuring. The interim dividend is being held at 1.75p per share.

St Ives said that although the wider economic situation continued to affect its print business, its exposure to commoditised print markets had been “significantly reduced” as a result of the restructuring and it continued to seek further efficiencies and cost savings to offset pressure on margins.

The books business had “performed well”, with Bungay-based Clays consolidating its position as the UK’s leading book printer, helped by new contracts with organisations including publisher Random House. The investment in Evolved Group would also allow Clays to develop further its e-book strategy, the group said.

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St Ives added that its point-of-sale and exhibition and events businesses had also continued to win market share while the marketing services division was now generating around 20% of underlying profit despite the full benefit of the latest acquisitions not yet being reflected in the figures.

Patrick Martell, chief executive of St Ives, said today: “These half year results reflect the significant progress we have made in implementing the strategic repositioning of the group, improving our financial performance and creating a complementary range of digital and marketing services that will enable the group to add further value to existing and new clients.

“We fully expect the proportion of profit generated by marketing services to increase further as we move forward.

“We do not see an immediate improvement in the general economic climate in this financial year and margins within our print businesses will remain under pressure. Nonetheless, the growth and development of our Marketing Services business gives us confidence of achieving further overall progress for the group.”