Print ops remain challenging for St Ives

By Jo Francis, Thursday 30 November 2017

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St Ives has issued a trading update ahead of its annual general meeting of shareholders.

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St Ives: AGM was held today (30 November)

The PLC described overall trading in the three months to 3 November as “positive and ahead of management expectations” and highlighted like-for-like sales up 22% at its Strategic Marketing division, which had sales of £163m in the 2016/17 financial year.

Group sales overall are up by around 4% on the same period last year.

At large-format wing Marketing Activation, which learned that it was losing its large contract with Sainsbury’s two months ago, trading conditions remained “challenging and highly-competitive”, while margins were in line with expectations at the £153.7m turnover business unit. The division includes SP Group and Service Graphics. 

“Targeting customers that value service and innovation as opposed to those focused on price alone, remains a priority,” the group said.

It will continue to print for Sainsbury’s until the end of the year.

Sales at the group’s Books division, Clays in Bungay, fell by around 12% following the loss of its £11m contract with HarperCollins, which ran until the end of June.

“Operating margins were in line with expectations and we continue to focus on managing the cost base proactively”, St Ives said of the books business.

There was no update in the statement regarding any progress with the strategic review instigated in March, which could result in the sell-off of its printing operations.

The group also asserted that its net debt to underlying EBITDA ratio of 1.6 times was “comfortably within” its banking covenants.

St Ives posted a bottom line pre-tax loss of £44.1m on sales of £393.2m in its last financial year. Adjusted pre-tax profits fell by 21% to £24.1m.

The share price rose by 5%, or 3.75p, on the announcement to 77.75p (52-week high: 134p, low: 37.5p).

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