The effects of the recession, together with the impact of structural changes within the industry and in the buying patterns of customers, were writ large in the group’s results for the year to 31 July, announced this morning.
Group sales were effectively static, down 1.1% at £386.8m, but underlying pre-tax profits slumped by 75% to £7.3m, resulting in a £7.2m pre-tax loss for the year (2008 profit: £30.6m).
Chairman Miles Emley described market conditions as "the toughest in the history of St Ives as a public company", and cited the magazines business as being particularly badly hit.
Sales in its media products division, which includes books and magazines, were down 10.8% to £154.5m, while profits more than halved to £12.3m.
The books operation of the business scored a number of new contract wins, although the collapse of distributor EUK in November 2008 caused disruption to the supply chain.
In magazines, however, the impact of lower paginations, shorter run lengths, and title closures resulted in a 12% reduction in sales, while fluctuating demand from publishers made it difficult for the magazine business to operate efficiently. This resulted in a "significant loss".
Sales in commercial products grew by £14.2m to £232.3m, but the division posted a £2m loss as margins were impacted by a mixture of increased outsourcing due to the print management element of the business, overcapacity and price erosion in direct response and commercial print, a reduction in net margins in point-of-sale, and a loss in its exhibitions and events wing.
There were also one-off start-up costs associated with its Sainsbury’s contract win.
During the year, St Ives disposed of its remaining overseas interests in Holland and North America, and it also closed its Crayford and Andover facilities, resulting in significant restructuring costs and writedowns.
Chief executive Patrick Martell, who officially took up the reins in April, reiterated his belief in the group being well-positioned to capitalise on any upturn.
St Ives’ share price was unchanged at 71.25p at the time of writing.
