Communisis: sale story is 'gossip'

Communisis chief executive David Jones has dismissed as gossip a newspaper report that he is under pressure to put the business up for sale.

The Daily Mail reported on Tuesday (14 December) that "activist" shareholders including JO Hambro's North Atlantic Value Fund (which owns a 9.2% stake) and Active Value Capital (7.2%) were "desperate" for Jones to extract value for shareholders by selling the 300m-turnover print and print management plc.

"Well, they've not actually said that to me," said Jones. "I just think it's Daily Mail Support Services gossip. There's nothing out there in the market and the City that says that."

The article, which called Jones' group an "unexciting print-managing business", went on to say that "cash-rich private equity groups are circulating like vultures". But having branded print management dull, the article then went on to say that it was the opportunity presented by print management that made the print services sector attractive to potential investors.

Jones said he recognised Communisis needed to improve share price performance but said the claim that the group was "unexciting" was "the most annoying thing of all".

"In the long haul Communisis' share price has been disappointing but that is down to the sector being disappointing," Jones said. "If you look at what we've done and where we're going we think we're breaking ground but people outside the industry sometimes don't see that."

Rumours persist that Communisis is about to sign a major print management contract along the lines of its 250m five-year deal with Barclays with another big bank, thought to be HSBC. Jones declined to comment.

[o] In a trading update released this morning (15 December), Communisis announced that it is to make a one-off payment of 10m into its pension scheme, which has a deficit of 19m under FRS17. The payment will be made early next year.

This follows plans outlined in September's half-year interim report for a one-off 1.5m contribution, although it is unclear whether this would be in addition to or part of the 10m announced today.

The company also reported that business in the fourth quarter was consistent with expectations published in September's interim results. In that report, the company stated: "Weak demand and over-capacity continue to be issues for our industry and we therefore remain cautious on the outcome for 2004, and in particular the fourth quarter."

The firm's share price fell from a closing price of 116p last night and is now trading at 112p.Communisis was unavailable for further comment on today's statement.




Communisis timeline
Feb 2000 John Mansfield buys Waddington print arms for 319m
Apr 2000 buys Rexam printing division for 85m
June 2000 Rebrands as Communisis
Jan 2001 Disposes of non-core businesses including Howitt
May 2002 Buys print manager Centurion for 42m
Sept 2002 Wins 50m-a-year Barclays contract
April 2004 Sells off Colour Cards arm
Sept 2004 Buys print manager Dataform for 22m
Nov 2004 Plans closure of loss-making label arm in Gateshead
Dec 2004 Pledges 10m to shore up pension fund deficit

Story by Lauretta Roberts