The group said the sales growth in the six months to 30 June was fuelled by print management wing Centurion and new contract wins.

Print management sales leapt by 344% to 61.6m thanks to a full first-half contribution from Centurion, and sales in personalised products increased by 1.8% to 58.9m. But sales fell in the groups other divisions, document services and color solutions, where margins also halved.

A 500,000 charge for the 5m contract premium paid to Barclays, which is being written off over the life of the contract, and a pension charge of 500,000 reduced operating profits to 12.2m (2002: 13.7m).

The results were below analysts expectations, and Numis Securities has now downgraded its full-year profit forecast from 25.8m to 24m. Communisis shares fell 7.6% to 113.5p.

The 16.6m turnover color solutions business, which includes Waddington Labels in Gateshead, has been subject to a strategic review and is now being considered for disposal. Industrial action at Waddington Labels has been suspended, after Communisis made an offer of a bonus payment of 10 per week per GPMU member, backdated to April. If things turn around at the company then we would be looking to consolidate this into the basic, said GPMU national officer Mike Griffiths. This action has opened up a lot of issues for the group.

Centurion has recruited Tony Massey from rival print management firm Alistair McIntosh.

Communisis half-year results
SalesReturn on sales
Print management61.6m (13.8m)5.8% (4.3%)
Personalised Products58.9m (57.8m)14.7% (14.1%)
Document Services32.6m (38m)5% (10.1%)
Color Solutions16.6m (19.9m)5% (11.8%)
Note: 2002 figures in brackets. Divisional operating profits exclude 1.5m of central costs.

Story by Jo Francis