Trading Statement

RNS Number : 8547G

St. Ives PLC

11 August 2016

 

11 August 2016                                    

St Ives plc ("St Ives" or the "Group")

Year end trading update

St Ives, the international marketing services group, is today providing a year end trading update ahead of the announcement of its results for the year to 29 July 2016, which will be released on 4 October 2016.

The board reports that the overall results for the year are expected to be in line with current market expectations.

Strategic Marketing

Despite the cancellation and deferral of a number of large projects during the final quarter of the financial year (as reported in our 25 April trading statement), trading across our Strategic Marketing segment has continued to be positive and significantly ahead of the equivalent period last year. It remains our view that the issues we encountered in the final quarter were short term and we are encouraged with the progress that is being made to replace the projects which were cancelled.

Revenue for the segment is approximately 30% above the prior year. Organic growth, at approximately 11%, has been very strong reflecting the high quality of our businesses.

The integration of The App Business (a mobile-led consultancy specialising in strategy, product development and business transformation, acquired in January 2016), is progressing well.

Whilst remaining alert to the possible impact from Brexit on business confidence and having carried out targeted cost savings we continue to support the growth plans of this segment both in the UK and internationally.

Marketing Activation

Trading conditions within our Marketing Activation segment continue to be challenging due in large part to the ongoing pressures within the grocery retail market, with revenue approximately 7% below the prior year. Diversification of the client base to reduce this segment's dependency on the grocery sector remains a priority; to this end, we were recently appointed as print and fulfilment partner for Whitbread plc on a long term contract to support all of their brands. We continue to target other contracts of this nature although we recognise that it will take time and investment to win and transition such work. The Whitbread work, along with additional services now being provided under our contract with HSBC, will help to reduce our dependency on the grocery retail sector in the long term but they have, in the short term, led to contract transition costs being incurred in the final quarter of our financial year.  

Books

Within our Books business, revenue is approximately 2% above the prior year. We have finalised the transition of the additional work won from Penguin Random House. The de-stocking experienced in the final months of our financial year, due to a reduction in publisher warehousing capacity, appears to have run its course and we do not expect the warehousing reduction to cause further volume reductions in the coming financial year.

- Ends -

For further information contact:

St Ives plc                                                        020 7928 8844

Matt Armitage, CEO

Brad Gray, CFO

MHP Communications                                     020 3128 8100

John Olsen / Giles Robinson / Gina Bell

 

END

 

 

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