And the group doesnt expect to see much of a recovery in the next six months, although it is confident in the long term.

Sales for the half-year to 1 February were up 3.3% to 241.1m because of St Ives acquisition of Avanti Press in February 2001, but managing director Brian Edwards said underlying sales were down 12%.

The group was also hit by exceptional charges of 9.4m, taking pre-tax profits, also accounting for goodwill, to 6.1m. The exceptional costs came from redundancies and the proposed closure of its Gillingham web offset plant.

The one bright spot was its book printing operation, Clays, which benefited from printing best-sellers related to film releases. St Ives direct response businesses suffered from weak demand in the UK, US and Germany, although specialist products were more resilient.

Corporate financial activity was exceptionally quiet in Europe and the US, although St Ives has maintained its share as well as in report and accounts.

The groups magazines business was hit by falling advertising, particularly in the travel, leisure and dotcom sectors, but fashion and lifestyle titles held up. However, title closures have prompted its plans to close Gillingham and consolidate magazine printing at its five other UK web offset plants.

In multimedia, demand fell and prices were under pressure, while the DVD market was not at commercially significant levels.

St Ives cut, or proposed to cut, 625 jobs in the period, leaving its workforce down 11% on the same time last year. The groups net capital expenditure was 16.67m. St Ives share price fell 6.5%, or 30p, to 430p on the results.


The group has declined the BPIFs invitation to attend a meeting on 16 May about a DTI-approved industry forum (PrintWeek, 28 March).

Story by Gordon Carson