Communisis full-year trading “in line with expectations”

By Richard Stuart-Turner, Thursday 19 January 2017

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In a trading update released today (19 January), Communisis has said its trading for the year to 31 December 2016 finished in line with expectations.

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Blundell: "The 2016 performance was solid"

In its Customer Experience division, which includes the firm’s former Produce segment and the rest of its Design services, Communisis announced a significant new contract win in November 2016 with HMRC for all its outbound customer communication. The company said implementation planning for this is well in-hand for the go-live date in mid-2017.

The group's Brand Deployment division, which encompasses the former Deploy operation and shopper marketing, has won a new contract with Sony Europe, for a range of customer communication services.

The three-year agreement went live on 1 October 2016 with activities including management of the supply chain for marketing collateral and POS across Europe.

The firm also extended its presence in Germany by opening in Berlin to complement existing operations in Frankfurt and Düsseldorf.

Communisis chief executive Andy Blundell said: “The 2016 performance was solid and the simplified dual-divisional structure helped us to focus successfully on the major growth opportunities: Long-term contract wins such as HMRC and Sony Europe will help deliver against our targets for 2017 and beyond.”

Strong free-cash flow helped reduce the firm’s net debt by approximately £9m to £30m. Additionally, accounting deficit related to the Defined Benefit pension scheme reduced from £57m at 17 October 2016 to approximately £55m at the end of December.

The company had proposed a capital reduction in October to enable it to continue to pay dividends in the face of its ballooning pension deficit, which had increased by £13m, or nearly 30%, to £57m between June and October due to falling corporate bond yields.

Communisis will issue its preliminary 2016 annual results on 9 March.

For the year ended 31 December 2015 it recorded a sixth consecutive year of growth with turnover of £354.2m.

The group's share price rose by 1.66p to 45.66p in early trading following the announcement (52-week high: 49p; low: 34.5p).

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