The owner of Wyndeham Group described 2014 trading thus far as “broadly in line with expectations”.
Sales in the January to August period were down 5.8% to £69.6m, which Walstead said was mainly due to the IPC loss. The publisher (recently renamed Time Inc UK) had been its single-biggest customer, and moved its work at short notice over the summer.
In a statement, chairman Mark Scanlon said that the group had subsequently made “excellent progress” in aligning capacity to the market and “will review this situation regularly.”
Scanlon said the business had subsequently gained new commercial work, but declined to go into specifics. “In 2014 our challenge has been to offset the loss of volumes following Time Inc’s unexpected decision to single-source its UK magazine printing from July,” he said.
“We have secured new contracts in the catalogue and commercial markets including work from online retailers where print is becoming more-and-more accepted as a cornerstone of their multi-channel marketing programmes.”
For the full year to 31 December 2013 Walstead had actually improved its profitability and reduced its debt, on slightly reduced turnover.
Operating profit jumped 19.5% to £5.5m on sales down 3.7% to £120.2m, while EBITDA increased by 4.9% to £11.7m.
The business made a pre-tax profit of £4.4m after exceptional costs of £1.8m for redundancies and restructuring. In 2013 headcount fell from 1,126 to 993.
Walstead said its balance sheet had been “significantly improved” as the firm continues to pay down its debt. Term debt at the year-end was £12.2m (2012: £16.3m) and at 31 August that had been further reduced to £10.4m. Its total net institutional debt last year was £23.3m, down £6.1m on 2012, and has since fallen to £21.5m at 31 August.
The institutional debt figure excludes the £14.6m owed to Cigala LLP, which is controlled by Walstead directors Mark Scanlon, Richard Fookes and Stephen Hargrave.
In July this year it completed the deferred payments for the purchase of Poole-based Southernprint, which it acquired from Newsquest in 2009.
Workers at Southernprint accepted reduced hours and reduced pay for a period of up to a year in June, in a move aimed at keeping the plant open after the Time Inc work moved.
Walstead declined to give specific details about the comparative volume of the new work won thus far.
However, Scanlon said the group expected 2014 profits to be on budget, and was “confident of achieving another good result this year.”
Wyndeham also confirmed the closure of its Stockport-based continuous stationery operation Print Direct, with the loss of around 20 jobs. The plant’s equipment has been sold to Integrity Print. See separate story here.
It is continuing to invest in its web offset platform, and recently-confirmed that the 32pp short-grain press from Global MP would be moved to Wyndeham Peterborough in a £2m spend.
Wyndeham also described its digital operations, including pre-media operation Rhapsody, as “performing strongly” with Rhapsody’s automated cross-platform solution E-Publish finding favour with large publishers.
In April Wyndeham set up a new digital wing when it took over a team of data specialists from Volume Group, and the new operation was described as “trading according to plan”. It is still in the process of assessing an investment in digital print kit for its Roche site for the new division.
