The move is part of the actions to restore profitability announced last November after the group issued a profits warning.

Wyndeham plans to more closely align the two companies in order to strengthen their responsiveness to customer requirements, to share and make better use of existing resources and to apportion work between the two businesses more effectively.

Group managing director Paul Utting added: "We want to bring the whole group together in working more closely from a manufacturing and sales and marketing point-of-view. These two businesses are a logical place to start and there is some duplication, for example financial management can be done from one site."

Utting said some products, such as low pagination stitched publications, could be done at either factory.

Heron is based in Maldon, Essex, while Impact is based in Basingstoke. Herons products include weekly and monthly magazines and catalogues; while Impact is renowned for its magazine cover printing.

An interim management team headed by Heron production director Ray Lesnik and finance director Mike Edwards will manage the transition. The move will result in redundancy for three of Impacts senior management team, and consultation has begun on this. Sales director John Crouch, one of the founders of the Impact business, will remain with the company. It's not clear how, or if, the restructure will affect Impact managing director Peter Gubb.

In a statement to the Stock Exchange Utting said: We believe Wyndeham Herons management team will be invaluable in both strengthening our web offset offering and further reducing the cost base of the combined businesses and we look forward to updating the market on further progress in due course.

Although the move will result in cost savings during 2004/5, Wyndeham will incur some exceptional restructuring costs as a result and is likely to issue a further trading statement prior to its year end in March.

Story by Jo Francis