Sales in the 27 weeks to 1 February were down 2.8% to £161.7m, although if acquisitions and print closures are removed from the figures St Ives said this actually equated to an increase of 2.9% on a like-for-like basis.

Underlying pre-tax profit increased by 10.1% to £12.2m.

Print sales fell by 8.6% to £131.3m, but margins improved to 6.5% (2012: 6.1%). The group consolidated its Yorkshire direct response business from two sites to one during the period, after closing its Westerham Press and Blackburn sites in the prior year.

Turnover at St Ives’ marketing services division grew by 36.4% to £31.1m, driven by previous acquisitions in this area as well as organic growth. St Ives announced a further acquisition in this space yesterday (11 March), with the purchase of digital marketing agency Amaze.

The results were complicated by changes to international financial reporting standards (IFRS), which meant St Ives has had to change the way contingent considerations related to its string of marketing services acquisitions are reported.

Because of this, a £4.8m charge against the marketing services wing resulted in a £992,000 loss for the division. Underlying profit was £3.8m (2012: £2.2m), with margins increasing from 9.7% to 12.5%.

The accounting changes do not have any affect on cashflow.

Chief executive Patrick Martell said the group was "pleased to report another strong set of results" along with further progress in its plan to re-shape the business.

Across its print operations, St Ives said the new Timsons/Kodak digital book production line at Clays would help mitigate the change in work mix as publishers switch to shorter run lengths.

Service Graphics and SP both performed well, with Service Graphics benefiting from the Paralympics and SP renewing contracts with a number of important point-of-sale customers. The consolidated Direct Response business "improved significantly".

Martell said: "We have completed the rationalisation of our print businesses by exiting commodity markets. The print businesses we still have remain integral to the group and are an important part of the offering alongside marketing services."

New contract wins for the group overall included Innocent Drinks, Johnston Press, JD Williams and Pizza Hut.

In a major turnaround, St Ives is also showing a £4m surplus on its pension scheme obligations, after reviewing the investment strategy and scheme assumptions regarding liabilities.

"Five years ago the deficit was in excess of £50m, so this is quite significant," said finance director Matt Armitage. "We have worked very proactively with the trustees on our investments, and this has paid dividends."

The group’s net debt was reduced from £13.4m to £7m.

Shares rose to a 52-week high of 138.63p in early trading, and were up 6p on yesterday’s close at 136.5p at the time of writing.

See this week’s PrintWeek for more details.