The former St Ives group has written off nearly £19m related to the disposals of its printing businesses, a figure that was dwarfed by a further £49.6m of write-downs and acquisition costs related to its continuing marketing operations.
The PLC was renamed and rebranded as Kin + Carta earlier this month under new CEO J Schwan.
During the 2017/18 financial year St Ives cut all ties with its print heritage, selling SP Group, Service Graphics and Tactical Solutions to SelmerBridge; Clays to Elcograf; and print management wing SIMS to Paragon Group.
There was a net cash inflow of £32.4m and operating profit of £3.9m from the disposed of print operations, which have been classified as discontinued in the Kin + Carta results for the 53 weeks to 3 August.
The subsequent administration of SP Group means that a warehouse valued at £5.3m that had been occupied by the Redditch business is now being marketed for sale.
Kin + Carta has retained the Bungay site that is home to book printer Clays, which is classified as an investment property at £4.5m.
Sales on continuing operations increased by 9% to £178.4m, while operating profit margins excluding adjusting items increased from 10.1% to 11.8%.
Group sales last year were £393.2m.
An impairment charge of £18.8m was made against discontinued operations, while a major restructuring at the group’s core “digital transformation” businesses contributed to the £49.6m charge for adjusting items related to its continuing businesses.
Occam, Response One, Amaze One and Branded 3 have been merged into “a new communications proposition” called Edit.
“This move has allowed us to diversify away from GDPR impacted service offerings. I'm happy to say the new proposition is resonating in the market with some recent large global customer wins,” said Schwan.
“We've also merged our two digital design and build agencies, Amaze and Realise into one firm, AmazeRealise, now the largest agency of its kind in the UK. This move has allowed us to more easily position AmazeRealise for international expansion.”
Retail property consultancy FSP has also been merged into strategy firm Pragma.
Healthcare communications firm Hive, acquired in 2015 for up to £50m, “struggled” over the year, and is being "realigned" with Kin + Carta’s new digital focus.
The £49.6m in adjusting items included redundancy costs of £2.7m, an £8.7m write-down of intangible assets, a £12.1m impairment in goodwill and intangibles, and nearly £24m in contingent consideration relating to past acquisitions that is required to be treated as remuneration.
There was also a £3.1m increase in the deferred consideration related to the acquisition of Schwan’s former business Solstice Consulting, in a variance to the original deal terms that was agreed last year.
Schwan said the reshaped group could now potentially be on the lookout for further buys. “With a recently strengthened balance sheet, we are confident we can both grow organically and by acquisition. I believe the future for Kin + Carta is very bright,” he stated.
There was a bright spot for St Ives pensioners, as the scheme showed a small surplus of £1.9m compared with the prior year’s £16m deficit.
The statutory loss before tax on continuing operations increased to £31.2m from £19.2m.
The bottom line loss after tax on both continuing and discontinued operations was £29.2m (2017 loss: £43.4m).
An industry source commented: "Lots of accounting adjustments, which make the numbers meaningless until you get through this year. I would imagine they have a year to demonstrate progress of the core business and organic revenue growth."
In early trading Kin + Carta shares fell by 5.9p, or 5.84%, to 95.10p (52-week high: 110p, low: 66p).
The new visual identity for Kin + Carta was created by London design agency Carter Wong.