19th Jan 2006 07:00
Embargoed for release 7.00 a.m. on 19 January 2006St Ives plc - Trading UpdateAs stated last October in the announcement of our results for the fifty twoweeks ended 29 July 2005, most of our markets continue to experienceover-capacity and fiercely competitive pricing.We announced on 28 October 2005 that our two plants in South Floridaexperienced significant interruption to their business because of HurricaneWilma. As a result the Hollywood and Miami plants were out of operation for asignificant period; costly steps to place customers' work elsewhere werenecessary and management resources were diverted towards the production ofexisting work, meeting immediate customer needs and restarting the plants. Thebusinesses of a number of our locally based customers were also disrupted. Ourplants are now completely recovered from the immediate effects of thehurricane. However, sales of non-recurring work require rebuilding, against abackground of further price competition in web offset markets in the USA.In the UK, since mid-December web offset markets have experienced a sharp andsignificant reduction in demand, which has affected both media and commercialproducts; pricing pressure has intensified further. In the second half of ourfinancial year, we shall lose some work, where we have been unwilling to reduceour prices to unsustainable levels.Demand for personalised, direct mail products remains subdued; demand from thefinancial services sector has been lower and price pressure continues.While corporate financial activity has increased, there has not been acorresponding increase in requirements for printed documentation, as manytransactions do not require the circulation of printed documents toshareholders or involve AIM listed companies, where the regulatory requirementsare less.Music and multimedia markets were busy, but we experienced a significantreduction in activity shortly before Christmas. As always in these markets,forward visibility is extremely limited.Our book business continues to perform well and is maintaining market share andvolume albeit in an increasingly competitive market. Term contracts are inplace with our major customers.Our point-of-sale business continues to make progress following recentinvestment in new facilities at Redditch and Burnley.The strong performance of our book and point-of-sale businesses demonstratesthe benefits of our strategic focus on the provision of added value services inaddition to print.We continue to focus on cost control and to keep our cost base under review.The Group's balance sheet remains strong and modestly geared. The Directorsexpect to be able to report non-recurring income in excess of ‚£2.5 millionmainly arising in the first half of the financial year on the disposal ofsurplus properties, which will generate a cash inflow of ‚£6.5 million.The effects of hurricane disruption will be reflected principally in theresults for the first half of the year. However, in the light of the tradingconditions outlined above, it is expected that the results for the year ending28 July 2006 will be significantly below current market expectations.A further announcement will be made on 31 January 2006 to provide detailedinformation on the effects of adoption of International Accounting Standards onthe historic results of the Group. The Group's Interim Results for the twentysix weeks ending 27 January 2006 will be announced on 11 April 2006.Press enquiries:-St Ives plc 020 7928 8844 Miles Emley Chairman Brian Edwards Managing Director Ray Morley Finance Director Smithfield 020 7903 0665 John Antcliffe ENDST IVES PLCRelated Shares:
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