Alongside its interim results, chief executive Matt Armitage gave the clearest indication yet that the struggling PLC was prepared to exit print altogether in order to focus on its Strategic Marketing offering.

In a statement, Armitage said: “We recognise the effect that the legacy businesses are having on our overall performance and on our ability to generate value for shareholders.  We are reviewing strategic options for both our Marketing Activation and our Books segments whilst taking decisive action to improve efficiencies and reduce costs and to diversify our Marketing Activation sector focus. This is a priority for us in the months ahead and we will continue to report on its progress."

Details of what the restructuring measures will entail were unavailable at the time of writing, but Armitage is understood to be travelling to Bungay later this week to brief the workforce at Clays.

The group’s share price has been battered by bad news of late, it issued its third profits warning within the space of a year last month after it lost its Harper Collins contract, resulting in the share price falling to a new 52-week low of 65.75p at the time. Armitage said the board was “acutely aware” of how disappointing the group’s performance had been for shareholders. The interim dividend has been slashed by 72% to 0.65p.

Marketing Activation had sales of £154.8m last year and includes point-of-sale and large-format specialists SP Group in Birmingham and Service Graphics in Chessington, as well as field marketing agency Tactical Solutions and print management wing SIMS. The Books business comprises the £68.6m turnover Clays in Bungay.

A well-placed industry source said: “The problem is that others are also up for sale and the in-store marketing market for physical displays is in decline – you can't get product placed in FSDUs. No one wants to catch a 'falling knife' but the two divisions are decent and would benefit from a new home and some TLC.”

Industry sources also questioned the likelihood of St Ives being able to find a single buyer for the “mixed bag of businesses” in Marketing Activation.

In addition to the strategic review, St Ives has also put the Roche and Peterborough sites occupied by Wyndeham Group up for sale.

Wyndeham owner Walstead Group acquired St Ives’ web printing business in 2011, with St Ives becoming its landlord. It’s not known if the highly-acquisitive Walstead team would potentially be interested in buying the factory sites, or the Books or Marketing Activation businesses. No-one at Walstead was available for comment at the time of writing.

St Ives described the first six months of its financial year as “very challenging”. Group sales in the period to 27 January rose by 5% to £195.1m, but the group posted a loss of £26.8m after £36.3m of “adjusting items” including a further hit on the value of its print assets with a £23.9m impairment charge at Marketing Activation and £3m at Books.

Book sales jumped by 15% to £41.4m, while the operating result at the division slipped from £3.7m to £3.2m. Sales at Marketing Activation were down 3% at £77.9m and adjusted operating profit fell from £4m to £1.9m. The bottom line loss was £21.8m in Marketing Activation, and £673k in Books.

The Strategic Marketing division, which has been created through a string of expensive acquisitions, posted sales up 9% at £75.8m. However, this growth was only due to the effect of its most recent buys. Adjusted operating profits at the wing fell from £9.7m to £6.2m. It made a statutory loss of £2.5m after £8.7m of charges.

Armitage said it was taking longer than expected to replace marketing work that was deferred or cancelled last year.

Net debt was reduced from £80.8m to £70.4m, and the group has also brought down its £125m revolving credit facility to £95m by taking out a loan of £30m. However, due to its recent financial performance its risk rating has been increased from low to medium.

There was at least one bright spot in that the PLC’s pension deficit has come down to £18.5m (2016: £26.4m).

St Ives’ share price, which had slipped even further to just 52p in recent weeks, rose by 0.5p on the announcement.