However, structural change in the publishing industry has again hit sales at book wing Clays.

The PLC released its final results for the year to 1 August today.

Group sales rose 3% to £327.6m and underlying pre-tax profit jumped 17% to £29.4m. Underlying operating profit increased by 15% to £31m.

Fresh chief executive Matt Armitage said the results provided "clear evidence" of the success of its strategy to move into marketing services through a major M&A push. 

He also highlighted the benefits of collaboration across the group.

“We are gaining significant traction through collaboration and cross-selling,” he said. St Ives now works with more than 80 clients across the group, up from 50 last year.

Armitage said the restructuring of its print operations was “now complete”. Despite the focus on marketing buys, St Ives is still investing in its print businesses. It spent £11.7m on capex, which included new digital kit for Clays, Service Graphics and SP Group.

And in a revamp of the management at part of the print wing, Nick Cole has become joint managing director of both SP Group and Service Graphics. Former Service Graphics managing director Steve Parkin has left the business.

Acquisitions have propelled turnover at the group’s marketing services division to almost £100m, and St Ives is aiming to expand its international reach via these businesses. It has already grown in this way by setting up offices in the USA and Singapore.

It is aiming to expand the operations of consultancy Incite by setting up its first office in China. “We are planning to open a Shanghai office in the first half of the financial year, subject to finding the right MD to run it,” Armitage added.

The group also acquired the office of data marketing business Response One as part of its capex spend.

For the first time St Ives has provided a more detailed breakdown of the performance of the operations within its divisions.

At its £229.5m turnover print services wing, sales classified as “marketing print” were up 3% excluding the effect of the disposal of the St Ives Direct Bradford business in September 2013.

Marketing print encompasses exhibitions and events at Service Graphics, SP Group’s point-of-sale operations, and print management operation St Ives Management Services.

The St Ives Direct Bradford business subsequently failed under its new owner, meaning St Ives did not receive £4.2m of the original £8m purchase price.

St Ives also had to pay out £462,000 as a result of guarantees given by the group to some of Bradford’s creditors.

Turnover at book printing business Clays was down 5% at £67.4m, although St Ives said market share was “maintained” and Clays has grown its share among academic publishing clients.

Armitage said that it was difficult to say whether the decline would continue at a similar rate in future, as predicted by some analysts, while at the same time there are reports that e-reader penetration has plateaued. “We could see the market stabilise. Clays is busy and is having a good autumn. We’re very pleased.”

It has also begun servicing the “fast-growing” self-publishing sector, although this is at a “nascent” stage. 

Armitage, who took over from Patrick Martell at the beginning of August, described the print wing overall as “profitable and cash generative”.

Operating profit at the division was static at £19.3m, which meant margins improved from 7.7% to 8.4%.

Print is effectively providing the platform for the group’s £200m splurge on the acquisition of a raft of marketing businesses. Armitage said the group remains on the lookout for further acquisitions in complementary, “high growth” areas of marketing services.

St Ives is pinning its future on these operations. The marketing services division is split into data marketing, digital marketing, consultancy services and field marketing. All grew with the exception of field marketing, which slipped 8.7% to £11.6m due to “increased competitive pressure”.

Overall, revenues from marketing services grew by almost 50% to £98.1m from £65.9m, boosted by recent buys Realise and Hive Health Group.

Operating profit at the division jumped 52.6% to £11.6m.

The group’s net debt increased to £42.7m from £15.2m, but chief financial officer Brad Gray said the balance sheet remained “robust”. Its bank credit facilities have been increased from £70m to £90m, of which it had drawn down £55m at the year-end.

“We are relaxed about the debt. The outflows are all investment-related,” Armitage added.

Last year the group’s defined benefit pension scheme had a small surplus, but after the valuation carried out earlier this year it now shows a £9.8m deficit, caused in part by changes to the rates used to value the scheme’s liabilities. The firm will continue to pay £2m per annum into the scheme.

St Ives has increased its total dividend by 10% to 7.15p. Its shares rose 2.53p in early trading to 202.53p (52 week high: 224.75p, low: 169p), but subsequently slipped back to 198.5p.