Communisis confirms positive FY outlook although job cuts loom

Communisis confirmed its full year outlook and hinted at upcoming contract awards in its Q3 statement this morning (19 November) as it announced more capacity reductions in its cheques business.

The London-headquartered marketing services provider will close its Lisburn, Northern Ireland cheque personalisation facility in January with the loss of 46 jobs, with the majority of production moving to Crewe.

Chief executive Andy Blundell said the move was "a reflection of the reducing demand in the cheque market" adding that the company no longer needed the amount of cheque printing capacity it had across its Crewe, Lisburn and Liverpool sites.

The group has also announced 16 redundancies at its 375-staff Leeds direct mail facility, which Blundell said would be across a range of positions and was not linked to the decommissioning of any kit.

"Leeds is moving more towards the specialist end [of the DM market], with more emphasis on digital and on statutory, quasi-transactional communications," he said, adding that the cuts, which represent less than 5% of the Leeds workforce, reflected that evolution.

Blundell was keen to highlight investment in staffing in growth areas of the business, such as the Liverpool transactional site and Managed Services division, as he pointed out that there had been a "slight" net increase in group headcount over the past year.

Communisis said that it expected to incur a £1.5m exceptional charge in the second half of 2012, arising from the combined 62 job cuts, which are expected to result in annualised cost savings of £1.3m.

The job cuts were the one sour note in an otherwise positive Interim Management Statement, in which the group confirmed its full year outlook of around a 23% increase in operating profit. "The consensus is an operating profit of £11.6m compared with £9.4m in 2011 and we are reasonably positive that we can deliver on that," said Blundell.

He declined to comment on recent contract rumours, both positive and negative for Communisis, although the group's IMS made reference to a "strong pipeline of bids" and included a quote from Blundell, which said: "[We] look forward to announcing further new multi-year contract awards in the near future."

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