Wyndeham Group owner Walstead Investments has filed its first set of full-year results since the group lost its largest-single contract, with chairman Mark Scanlon stating that the firm “will not chase unprofitable business”.
Sales in the year to 31 December 2014 were down 7.4% at £111.3m.
The IPC Media (since renamed Time Inc UK) magazines formerly printed by Wyndeham were moved to rival Polestar in a single-source deal at around the half-year stage, and Walstead subsequently closed the Wyndeham Heron web offset plant as a direct result of the loss.
It also shut its Print Direct continuous stationery business because of declining demand in that market.
Sales on continuing operations fell 6% to £109.2m. The group posted a £2m reduction in operating profits at £5.5m (2013: £7.6m), prior to an exceptional charge of £826,000, also on continuing operations.
EBITDA (earnings before interest, taxes, depreciation and amortisation) on continuing operations was £9.8m (2013: £11.9m).
Exceptional costs of £7.3m comprised £3.2m for restructuring, £2.5m for redundancies and £1.7m for impairment of fixed assets. The bottom line loss was £3m.
Scanlon described it as “a very creditable performance in trying circumstances”.
“We made steady progress towards our aim of creating the country’s most solid and well-financed large-scale printing group,” he stated.
Walstead also paid down £5.2m of its debt, leaving net debt of £32.8m, and renewed and extended its finance facilities with RBS “on very favourable terms”.
“We were able to renew early and take it as a sign that RBS is pleased with our trading prospects,” he said.
Scanlon’s chairman’s statement also included a thinly veiled reference to Polestar and the Time Inc decision when referring to “the loss of a major contract”.
“Unlike some of our competitors we will not chase business to the point where it is unprofitable for us and disruptive to our clients,” he stated.
Despite the blow, the group has also made some significant investments and and additions to its equipment line-up, including the relocation of a 64pp Manroland Lithoman from Heron to Roche, and the installation of a 32pp short-grain Lithoman at Peterborough, which came from the failed Global Media Production business in Bradford at Peterborough. A 10-colour Speedmaster with CutStar from the same factory is now installed at Roche.
It also closed the Wyndeham Gait factory in Grimsby in April, while in May last year sister company Walstead Capital made a major expansion move onto the continent with the purchase of Be Printers’ £100m turnover Spanish web offset and gravure operations.
The following month Walstead Investments acquired the former Artisan bindery in Leicester after that competitor failed.
Chief executive Paul Utting described the past 12 months as “a year of significant change” and said the group was now in the process of finalising its 2015 results.
“We expect our operating result in the UK to be ahead of 2014,” he said. “Putting Time Inc aside, our volumes are up year-on-year. The marginal decline in the markets we operate in is nothing like the decline in newspapers or the weekly mass market magazines.”