Trading Update

RNS Number : 3331J

St. Ives PLC

17 December 2015

 

17 December 2015                                

St Ives plc

Trading update

St Ives, the international marketing services group, is today providing a trading update covering the first four months of its 2016 financial year.

Trading overall was in line with management expectations, with Group revenue running approximately 4% ahead of the equivalent period in the prior year.  As such, our expectations for the full year remain unchanged.

Trading across our Strategic Marketing segment was strong and significantly ahead of the equivalent period last year, with organic growth of 15% driven by a combination of international expansion and greater collaboration across our businesses, combined with acquisition-driven growth of 20%. The segment continues successfully to extend its range of services, primarily through acquisition. The integration of the recently acquired businesses, Solstice Consulting (a Chicago based digital consultancy focussing on mobile-first product design and engineering services, acquired in March 2015), and FSP (a specialist retail property consultancy, acquired in August 2015), is progressing well. As planned, we continue to invest in additional headcount, both in the UK and internationally, to support our plans for growth in this segment over the medium term.

Trading conditions within our Marketing Activation segment continue to be challenging due to the ongoing pressures within the grocery retail market. As a result, revenue within the segment was 10% lower than the prior year although margin was maintained as new business wins, cost reductions and efficiency improvements helped to mitigate this pressure. Diversification of the client base to reduce this segment's dependency on the grocery sector remains a priority.

Within our Books business revenue was slightly behind (3%) the prior year as trading in November dropped below expected levels, although we have yet to see the full impact of the Christmas trading period. We expect to experience significant incremental volume in the business from January as part of the additional market share secured through the previously announced Penguin Random House contract win.

Our balance sheet remains in a strong position, giving us the capacity to invest further in our existing businesses and, where appropriate, to acquire further Strategic Marketing businesses that meet our stringent financial and cultural criteria and enhance our client offering.

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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

 

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