Interesting to see Communisis bouncing back with a big increase in interim profits announced last week. The City obviously liked what it heard, and the group's shares rose by just over 7%.
Communisis still has a way to go in chief executive Steve Vaughan's three-phase revamp and refocus plan, and by the looks of it further positive progress could well be made by the year-end. His comments in the accompanying statement made noteworthy reading, too. Despite the doom and gloom all around us the group hasn't seen any significant change in customer spend (as yet) and the challenging conditions may even spur clients into using more sophisticated mailings in order to win more business - with its DM wing back on form and punching its weight, Communisis should be well-placed to capitalise on this. And against a backdrop of ever thinner margins across the industry, I did a double-take when noting that the group's technology and services wing (including digital asset management and IT tools) is returning a margin of 48% - hoorah for added-value services that add value to the printer for once.
Vaughan also made some pertinent comments about the difficulties clients face when trying to adopt sophisticated transpromo statementing - identified by many as an important potential growth area and one of the hot topics at this year's drupa. But there are numerous hurdles to overcome and he highlighted the fact that statement formats are generally hard-coded into client computer systems and are thus difficult to alter. Communisis has partnered with HP-Exstream to come up with a solution, and hopes to capitalise by providing a service whereby customers can easily change their statement format without having to ditch existing computer systems. Sounds like that really could turn into a winning proposition.
*I have edited my original post where I compared the operating result in H108 against the equivalent two years ago, because the group has changed the way it reports restructuring costs. These are now included as normal operating costs, which is the way it should be. In 2006 that wasn't the case.
