Embargoed for release 7.00 a.m. on 19 January 2006
St Ives plc - Trading Update
As stated last October in the announcement of our results for the fifty two
weeks ended 29 July 2005, most of our markets continue to experience
over-capacity and fiercely competitive pricing.
We announced on 28 October 2005 that our two plants in South Florida
experienced significant interruption to their business because of Hurricane
Wilma. As a result the Hollywood and Miami plants were out of operation for a
significant period; costly steps to place customers' work elsewhere were
necessary and management resources were diverted towards the production of
existing work, meeting immediate customer needs and restarting the plants. The
businesses of a number of our locally based customers were also disrupted. Our
plants are now completely recovered from the immediate effects of the
hurricane. However, sales of non-recurring work require rebuilding, against a
background of further price competition in web offset markets in the USA.
In the UK, since mid-December web offset markets have experienced a sharp and
significant reduction in demand, which has affected both media and commercial
products; pricing pressure has intensified further. In the second half of our
financial year, we shall lose some work, where we have been unwilling to reduce
our prices to unsustainable levels.
Demand for personalised, direct mail products remains subdued; demand from the
financial services sector has been lower and price pressure continues.
While corporate financial activity has increased, there has not been a
corresponding increase in requirements for printed documentation, as many
transactions do not require the circulation of printed documents to
shareholders or involve AIM listed companies, where the regulatory requirements
are less.
Music and multimedia markets were busy, but we experienced a significant
reduction in activity shortly before Christmas. As always in these markets,
forward visibility is extremely limited.
Our book business continues to perform well and is maintaining market share and
volume albeit in an increasingly competitive market. Term contracts are in
place with our major customers.
Our point-of-sale business continues to make progress following recent
investment in new facilities at Redditch and Burnley.
The strong performance of our book and point-of-sale businesses demonstrates
the benefits of our strategic focus on the provision of added value services in
addition to print.
We continue to focus on cost control and to keep our cost base under review.
The Group's balance sheet remains strong and modestly geared. The Directors
expect to be able to report non-recurring income in excess of £2.5 million
mainly arising in the first half of the financial year on the disposal of
surplus properties, which will generate a cash inflow of £6.5 million.
The effects of hurricane disruption will be reflected principally in the
results for the first half of the year. However, in the light of the trading
conditions outlined above, it is expected that the results for the year ending
28 July 2006 will be significantly below current market expectations.
A further announcement will be made on 31 January 2006 to provide detailed
information on the effects of adoption of International Accounting Standards on
the historic results of the Group. The Group's Interim Results for the twenty
six weeks ending 27 January 2006 will be announced on 11 April 2006.
Press enquiries:-
St Ives plc 020 7928 8844
Miles Emley Chairman
Brian Edwards Managing Director
Ray Morley Finance Director
Smithfield 020 7903 0665
John Antcliffe
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