St Ives bosses are chasing down an even larger slice of marketing services budgets – despite ditching the group’s direct mail print operation – after meeting their first target a year ahead of schedule.
Speaking exclusively to DecisionMarketing following the group’s latest results announcement, chief executive Patrick Martell (pictured) said the higher margins achievable through marketing services made the sector highly attractive to the former print giant.
This is evidenced by the fact that marketing services operating profit of £7.6m is now more than the operating profit of the entire group back in 2009. Overall, underlying revenue was down 3.2% to £317.0m, but underlying profit before tax went up 10.7% to £26.8m.
St Ives had originally set a target of marketing accounting for 35% of business by next year, but with that figure already met, it now wants marketing to account for the majority of profits by 2016.
And despite claims from some observers that by selling off St Ives Bradford it was ditching direct mail print, Martell stressed that, due to the commoditised nature of the market, it made more sense for the company to buy in print services. It retains three print divisions, in book publishing, instore materials and large-format poster printing.
Martell also hinted that there could be further expansion overseas on the back of two new offices – in Singapore and New York – which have been set up to service existing clients. However, he was keen to stress this growth would only be driven by client demand.
Martell told the City: “Our focus is on converting growth opportunities within marketing services. This will be achieved through increased cross-selling, developing new sector based propositions, continued investment in our existing businesses, client led international expansion, and further carefully chosen acquisitions. We are confident that the group is well positioned for future growth.”
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