St Ives suffers margin pressure

St Ives, which prints the Economist and Vogue, has plunged into the red for the first time since it listed on the London Stock Exchange 24 years ago.

Miles Emley, chairman, said conditions were “the toughest in the history of St Ives as a public company” and had resulted in a “dramatic downturn in customers discretionary spend”.

Revenue in the year to July 31 was broadly flat, falling from £391m to £387m but pre-tax profits tumbled from £30.6m to a loss of £7.2m, including a £14m charge relating to site closures.

The impact of the recession had changed customers’ buying patterns, the company said. St Ives has also been affected by structural change within the publishing industry, which has seen advertising move online.

Sales in its media products division, which prints books and magazines, fell 10.8 per cent to £154.5m, while profits more than halved to £12.3m.

The magazines business was hit hard amid lower paginations, shorter run lengths and titles closures. St Ives said that fluctuating demand had made it difficult for the business to operate efficiently and that the division had seen “significant losses”.

The books operation scored a number of new contract wins, but the collapse of distributor EUK last November caused disruption to the supply chain.

Sales in commercial products rose £14.2m to £232.3m, but the division incurred a £2m loss as margins were hit by a mixture of increased outsourcing, overcapacity and price erosion.

During the year, St Ives disposed of its remaining overseas interests in the Netherlands and North America, and also closed its Crayford and Andover facilities.

Losses per share were 14.13p (earnings of 15.76p) and the final dividend is cut to 0.5p (12.15p), bringing the total to 2.25p (17.15p). The shares dipped 1¼p to 70p.