St Ives has issued a profits warning and is ceasing web printing at its Direct plant in Leeds with the loss of 125 jobs after being hit by falling demand and pressure on prices.

The group said market conditions had deteriorated further since it announced its year-end results last October. Demand for corporate financial print remained exceptionally subdued, it said. Magazine paginations had also been hit by the fall in internet and technology advertising, as had commercial and promotional print particularly in the US. But chairman Miles Emley said the book printing sector continued to be resilient and that more targeted direct mail was holding up.

The group is actively reviewing the cost base of all of its businesses and, if necessary, could introduce more cost-cutting measures.

The former Hunters Armley site in Leeds will now house St Ives Red Letter, which is moving there from Bradford, plus perfect binding and finishing. St Ives has made 430 staff redundant in the current financial year, including the 125 at Leeds, at a cost of 4m. It has cut 200 UK jobs, 140 in the US and 90 in Europe.

It said that profits for the year would be somewhat below the lower range of market expectations (42m) if the markets it serves remain subdued. The Leeds plant used two MAN Roland Rotoman webs, a 16pp and 32pp. It also houses eight folding systems, five saddle stitching lines, in-line shrink-wrapping and two binding lines.

St Ives Directs printing requirements will mainly be split between its Edenbridge site, which houses a new 16pp six-unit MAN Roland Rotoman, and Bradford.

The Leeds plant will employ 130 staff, some of whom will transfer from Red Letter in Bradford along with mailing, laser printing and enclosing kit.

St Ives share price fell 21.5p to 402.5p on the news but had risen to 407.5p by the time PrintWeek went to press.

Story by Gordon Carson