The company, which earlier this week struck a deal to buy digital agency Amaze for £23.4m, has already overtaken marketing services group Cello in terms of size, and now has Creston in its sights.
Speaking to DecisionMarketing, finance director Matt Armitage claims this has been achieved through a complete overhaul of the business, not just adding on services to its print operation.
He added: “Print has become commoditised. We have transformed our business to become a marketing services provider which can also offer print, rather than the other way round
In terms of future acquisitions, Armitage ruled out the purchase of a pure creative business, insisting Amaze can already offer that. Instead, he hinted that the company was looking to move further into web optimisation and search.
He said: “We have a team looking at the market but not many businesses match our requirements as they have to have a strong management team in place. All acquisitions have to integrate into the group – and our client profile – but also maintain autonomy.”
Most of its deals so far have been a combination of 70% cash and 30% equity, meaning its £55m slush fund is worth £71.5m in real terms.
Its half-year results show a slight fall in revenue from £166.4m to £161.7m, however, underlying profit before tax was up 10.1% to £12.2m compared to £11.1m last year.
Marketing services revenue was also up, 36.4% to £31.1m, and now accounts for 31% of underlying operating profit. The Amaze acquisition – still subject to approval – will bump this figure up another few percentage points.
And chief executive Patrick Martell said St Ives’ target of getting marketing services up 40% of group profit should be reached “within 12 to 18 months”.
With 50 of its largest clients now using more than one business within the group, Martell is keen to see more referrals across the group.
He added: “Two of our most recent wins – the RAC and Johnston Press – were the result of a collaboration between Occam and Response One. That is a great example of our joint approach.”
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