St Ives’ decision to invest more than £200m in building a major marketing services operation has been more than justified after the group’s latest results show the unit delivered more than three times the underlying operating profit achieved by the entire group in 2009.
In the firm’s preliminary results for the 52 weeks ended August 1 2014, underlying revenue for the group is up 3%to £327.6m compared to £317.0m last year, while pre-tax profits are up 118% to £11.9m, compared with £5.5m in 2013.
Like-for-like revenue increased in both segments but marketing services – up 12% – has far outshone the company’s traditional print services, which rose just 1%. The company decided to diversify into marketing services back in 2009, after recording the first loss in its history for the year before.
Marketing services now accounts for 46% of group underlying operating profit, including profit from acquisitions which have this year included healthcare and pharmaceutical agency Hive and digital business Realise.
Group chief executive Matt Armitage, who succeeded Patrick Martell in July, said: “We are very pleased to report another strong set of results, in which our marketing services segment delivered more than three times the underlying operating profit achieved by the entire St Ives Group in 2009, demonstrating clear evidence of the ongoing success of our strategy and of our ability to collaborate across our individual businesses.
“We now have a profitable and cash generative Print Services businesses, and a substantial Marketing Services proposition which has been successfully expanded and strengthened through acquisition over the past year. Our strong balance sheet gives us the ability to acquire further marketing services businesses that meet our stringent selection criteria. Taken together, these create an excellent platform from which to pursue our strategy for future growth.
“The current year has started well and in line with our expectations, with our Marketing Services segment benefiting from the UK economic recovery, from increasing marketing spend by our UK and international clients, and from our own organic growth initiatives.
“Overall we are confident that St Ives will make further strategic and financial progress this year.”
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