St Ives pays out despite caution

Shares in St Ives rose almost 30 per cent after the printer of the Economist and Vogue maintained its dividend amid warnings that its markets were deteriorating.

St Ives will give shareholders a total dividend of 17.1p, the amount it has consistently paid since 2001.

Simon Davies, an analyst at RBS, the company’s broker, said the share price had risen sharply on relief buying after the dividend was not cut. “But I don’t think that was ever likely as they have dividend cover of 1.23 times,” he said.

The company, which prints books and magazines, said it was seeing some volatility in demand, shorter print runs and the closure of some magazine titles as customers tightened their belts.

Brian Edwards, chief executive, warned that economic uncertainty meant it would be “hard to achieve progress in the short term”. Conditions in almost all of St Ives’ markets were “extremely challenging”.

RBS cut its full-year 2009 pre-tax profits forecast from £33m to £25m, assuming a 13 per cent decline in underlying revenue.

Sales and profits at the company’s media products business, which prints books and magazines, were flat.

The commercial products division, which accounts for half of group sales and includes commercial and multimedia printing, saw revenues rise 14 per cent. Profits rose marginally to £7.3m (£6.5m).

The company’s net debt increased to £33.1m (£23.3m). Revenues rose from £425m to £439m and pre-tax profits from £27.5m to £32.3m. Earnings per share were 15.75p (19.8p)

The shares closed up 23¼p at 101½p.