Walstead results: 'optimism tempered by caution'

Walstead has released its first results detailing how things are shaping up at the now cross-continental group.

The results for Wyndeham Group owner Walstead UK (formerly Walstead Investments) are for the year ending 31 December 2015, and pre-date the subsequent collapse of major rival Polestar.

In his chairman’s report, Mark Scanlon stated: “2015 was good for Walstead… although I suspect when we look back in future years it will be overshadowed by the year that followed.”

He also highlighted the ongoing challenges facing the business due to declining demand from magazine publishers.

“This is of course beyond our control – and largely beyond our customers’ control. It is therefore imperative that we offer the best possible package to customers, which in our view means a combination of the highest quality service and reasonable pricing.”

Sales at Walstead UK were down £14m, or 12.6%, to £97.3m primarily due to the previous loss of its Time Inc UK contract, to Polestar, and the closure of its Print Direct operation in Stockport.

Sales on continuing operations were £96.2m (2014: £109.2m).

EBITDA margins (prior to exceptionals) increased from 11.2% to 14.2%, and the operating profit on continuing operations grew from £5.5m to £5.9m. Net debt was up £7.2m at £40m.

It was an eventful year for the group, which made its first major overseas acquisition with the purchase of Spain’s Rotocobrhi and Euroheuco from Bertelsmann in a £4.6m deal in May 2015 through related company Walstead Capital, now renamed Walstead Iberia.

In the UK, it also bought Artisan’s bindery assets after the Leicester web offset printer went into administration.

Walstead subsequently went on to acquire Austria-headquartered Leykam Let’s Print, which is yet to file its maiden results under Walstead ownership.

The Iberian business has benefited from the insolvency of Spanish gravure printing rival Heliocolor. In the eight months of trading to 31 December Walstead Iberia posted a profit of £8.2m on sales of £56.2m.

Scanlon described it as “all in all a good start”.

“In recent years some of our competitors in Spain and elsewhere have place more emphasis on cutthroat pricing than on quality of service,” he stated.

“Some of them are competitors to this day; others have gone to the corporate graveyard. We do not intend to follow them and we will take whatever measures are necessary to remain healthy.”

He said Polestar “had achieved the remarkable feat of going bankrupt twice in six weeks”, but despite events that followed, including Walstead buying Polestar Bicester’s equipment and winning back the Time Inc work, he was cautious in his 2016 outlook.

“While the exit of Polestar should result in a positive rebalancing of supply and demand within the UK commercial printing market, we are told by most economists that Brexit will result in an economic slow-down which is likely to affect the printing industry as well as may others. Optimism for the UK market is therefore tempered by caution,” he said.

The filings also reveal that Rutland Partners acquired a 53% stake in the Walstead holding company, with senior management retaining the other 47%.

Scanlon said the management team was “highly motivated to ensure the success of the enlarged group”.

Walstead now has a new ultimate holding company – Walstead Holdings – for its printing interests in the UK, Iberia, and the central Europe operations of Leykam Let’s Print that now fall under Walstead CE.

Most of the overall group’s sales and profits now come from outside the UK, and it has an expected combined turnover of circa €518m (£450m).



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