Martell and the group’s board were quizzed about the performance of Occam and the nascent marketing services division, which accounted for just 2% of operating profits at the year-end, at the PLC’s AGM this week. "We are not totally satisfied [with Occam], but we want to support it, it’s in the right marketplace," Martell said.
"The market for data-driven insight is absolutely critical to the business going forward. We are looking at a broader marketing services play. For example, we didn’t secure the HSBC contract because of our printing ability, we secured it because of marketing services," he added.
St Ives acquired Occam in June 2010, in a deal worth up to £12.6m. At the time its sales were £8.3m and it made EBITDA of £2m.
In a trading update issued on the same day as the AGM (29 November), St Ives said that group sales in the first quarter of its new financial year were up about 10% year-on-year.
It also reported some indications that the market for large-format graphics is "improving" ahead of next year’s London Olympics. The group’s Service Graphics operation recently carried out a high-profile contract to apply a giant London 2012 message on the side of GSK’s west London headquarters.
In books, Clays continues to perform strongly. "We have produced the vast majority of the key titles that are expected to be Christmas bestsellers," Martell said. "What happens between now and Christmas on the high street will determine whether reprints are required."
St Ives shares rose 2.42% to 90p.
After making five acquisitions in 18 months, most recently a 15% stake in e-book specialist Evolved Group, the cash-rich group remains on the hunt for further possible buys.
- St Ives is "confident" that Walstead Investments will resume payments this month of the deferred £5m Walstead owes after its purchase of the magazine division. "We have an obligation to pay them and we will abide by the agreement," said Walstead chairman Mark Scanlon.
St Ives’ acquisition spree
Jun 2010 Occam DM: up to £12.6m
Feb 2011 Tactical Solutions: up to £24m
Sep 2011 Response One: up to £19m
Sep 2011 Pragma: up to £6m
Nov 2011 Evolved: (15.75% stake) £1.5m
