14th Jun 2006 12:10
St Ives plc - Trading UpdateIn the Interim Statement released in April, we said that most of the Group'smarkets continued to experience over-capacity and fierce price competition.This has particularly been the case in the direct mail market and in longer-runmagazine and commercial markets on both sides of the Atlantic especially formore commoditised products.Since that time there has been no sign of improvement in any of our markets.Recently, demand for direct mail and commercial web offset products, for whichvisibility is always limited, has weakened further and as a result ourbusinesses supplying these markets in the UK and USA are now performing belowearlier expectations. We have maintained our share of the market for companyannual reports, but low levels of activity and pricing in the market forcorporate financial print continue.The performance of the other parts of our business overall is in line withexpectations, although everywhere we face rising energy costs. Our book andpoint-of-sale businesses continue to do well. In April we launched St IvesGroup Sales, a new facility enabling customers to access all the Group'scapabilities through a single portal, fully supported by on-line systems forthe management of workflow, pre-press, artwork creation and archiving, orderprocessing and inventory control. The early results are encouraging and we havewon substantial new business, much of it on term agreements, which will notcome through until the next financial year.As a result of these factors taken together, we now expect the Group's profitbefore taxation for the year ending 28 July 2006 (on a "normalised basis"before restructuring costs and provision releases) to be approximately15 per cent lower than the market currently expects.A credit in respect of restructuring costs and provision releases of ‚£1.0 to ‚£1.5 million will be recognised in respect of profit on disposal of surplusassets and the release of provisions no longer required on previous businessconsolidations. The credit is net of further restructuring costs, the benefitsof which will accrue in the new financial year.The Group has a robust balance sheet and continues to generate strong cashflow.Net debt at the year end is likely to be lower than previously expected ataround ‚£25 million. Capital expenditure for the current year will be around ‚£40 million. As previously indicated future capital expenditure is expected torevert to more normal levels.Press enquiries: St Ives plc 020 7928 8844 Miles Emley Chairman Brian Edwards Managing Director Ray Morley Finance Director 14 June 2006ENDST IVES PLCRelated Shares:
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