Trading update and change in segmental reporting

Wednesday 7 July

Communisis plc

Trading update and change in segmental reporting

Marketing Services Provider Communisis plc, (LSE: CMS), is releasing an update on trading for the half year ended 30 June 2010 in advance of its interim results announcement on 26 August 2010 and also announces a change in segmental reporting to reflect better the company's strategy and demand drivers.

Trading

The Board advises that trading has met its expectations for the first half of the current financial year. The Group's balance sheet remains strong with net debt better than management expectations and at similar levels to those reported at 31 December 2009. Plans to re-purpose our Leeds Direct Mail business have progressed to schedule. The new Hewlett Packard high-speed colour digital platform has now produced several live projects for customers. The plan to remove legacy printing equipment has been completed within budget, unlocking cost savings on an on-going basis.

Change in segmental reporting

Communisis' strategy is to help clients improve the effectiveness and profitability of their customer and prospect communications and to optimise their marketing investments. This is done by providing a range of integrated marketing services. The acquisition and subsequent integration of Absolute Intuistic in 2009, coupled with the earlier disposal of the business forms operation, supports this strategy. The Group's activities are therefore now predominantly focused in two main areas which are:

·; Intelligence Driven Communications (IDC) and

·; Specialist Production and Sourcing (SPS)

Intelligence Driven Communications (IDC) helps businesses to increase revenue from their customer base by utilising data to deliver more targeted and relevant multi-channel marketing communication programmes.

The key components of IDC are data and analytics, where an organisation's customer or prospect database is segmented based on a combination of lifestyle and credit data so that businesses understand exactly what their customers would like to buy, how much they are likely to spend and whether they will pay, even before they are targeted. Communisis also provides solutions to manage content, images and assets, to ensure that these are used consistently across integrated campaigns. Document composition and output technologies are used to construct communications, which can be delivered effectively through a variety of paper-based and electronic channels, such as targeted direct mail or transactional documents, dynamic emails with an embedded link to online sites and mobile devices. Furthermore, the IDC offering also provides feedback on how a particular communication performed, using sophisticated response analysis and information management tools. This ensures that subsequent marketing communications programs are modified and improved appropriately.

Specialist Production and Sourcing (SPS) helps businesses to improve the efficiency and quality of their supply chains at reduced cost. Our specialist production facilities deliver technical expertise and sustainability in mission-critical areas.

The key components of SPS include well developed business process improvement tools to generate efficiencies across the entire supply chain, supported by specialist production and sourcing capabilities that can deliver mass communications, whether they contain a marketing, compliance or customer service message, in the form of a statement, e-mail, invoice, bill or direct mailing.

While components of IDC and SPS represent strong independent businesses, it is the combination of the two segments, delivering a fully integrated solution to customers, which provides real business benefit for them and a unique competitive position to Communisis.

The Group is close to completing an internal reorganisation aligning our activities and people around these two core value propositions. In parallel with these changes, we have been re-evaluating how we should report the Group's business to better reflect the company's strategy and demand drivers. Reflecting the business model we have created, we will now report the business in two segments: Intelligence Driven Communications (IDC) and Specialist Production and Sourcing (SPS).

The key changes to our previously reported segments are:

·; Absolute Intuistic and the other activities of our previously named Technology & Services segment are included under the new IDC segment.

·; Our Print Sourcing revenues are now subdivided between the SPS and Pass Through segments. Our core Print Sourcing will be categorised in SPS.

·; Pass Through is defined as those revenues representing print and/or postage that is passed onto clients at cost and will be reported under Print Sourcing.

·; The revenue and profit associated with data and response handling previously included within our Direct Mail segment is included within IDC. The remainder of our Direct Mail business which is associated with specialist output is included within SPS. Factory overheads have been attributed to both segments.

·; Our Cheque, Statement and Billing businesses (previously Transactional) have been included within SPS.

·; Costs previously described as 'Central Costs' which comprised marketing, IT infrastructure, Group procurement and Group Sales have now been allocated between the two operating segments - IDC and SPS. We have retained an element of Central Cost now classified as Corporate Costs as these represent the cost of our head office, main board and other plc related costs.

Financial results for the two previous financial years will be presented in the new format for clarity. Segmental information for the two previous financial years (31 December 2009 & 31 December 2008) and for the six months to 30 June 2009 will be restated. This restatement will be presented as comparative financial information in our interim announcement on 26 August 2010 and in our Annual Report for the year to 31 December 2010. Full disclosure of segmental net assets and other required information will be provided in those reports. In advance, we are publishing today restated summarised segmental information to enable users of our financial statements to understand the impact of the changes we have made. The change in reporting segments does not have any impact on previously reported consolidated profits or net assets or earnings per share of the Group.

For further information please contact:

Communisis plc 0113 277 0202

Andy Blundell / Peter King / Alistair Blaxill

Financial Dynamics 020 7831 3113

James Melville-Ross / Ed Bridges / Matt Dixon / Nicola Biles

Brewin Dolphin 0845 213 1000

Richard Jones

Sean Wyndham Quin