St. Ives PLC Trading Statement (9998H)

TIDMSIV

RNS Number : 9998H

St. Ives PLC

14 June 2017

14 June 2017

St Ives plc ("St Ives" or the "Group")

Trading statement

St Ives, the international marketing services group, provides the following trading update.

Following a challenging first half of the financial year, the first four months of the second half have, as anticipated, delivered a much improved performance; our expectations for the full year remain unchanged.

Strategic Marketing

Revenue for the Strategic Marketing segment for the first four months of the second half year was approximately 12% above the equivalent period in the prior year. Excluding the effects of currency movements, like-for-like revenue growth was approximately 7%.

As previously reported, we experienced a number of project cancellations and deferrals in the last quarter of the previous financial year, which also impacted revenue growth and operating margin within the first half of the current financial year. We are encouraged by the fact that the segment has now returned to delivering like-for-like revenue growth and also that the operating margin has improved significantly.

Marketing Activation

Trading conditions within our Marketing Activation segment continue to be very challenging due in large part to the ongoing pressures within the grocery retail sector, the segment's largest single market. Revenue was flat in the first four months of the second half (compared to a 3% decline in the first half) and the pressure on operating margin remains intense.

The cost reduction measures initiated within the segment have been implemented and the benefits are helping to mitigate this margin pressure.

Books

Within our Books business, revenue for the first four months of the second half was approximately 12% ahead of the equivalent period in the prior year (compared to an increase of 15% in the first half) with continued pressure on operating margin.

The previously announced cost reduction and restructuring measures will be implemented as planned before the end of the financial year.

Balance Sheet

We continue to look for opportunities to further strengthen the Group's balance sheet following the recent sale of a non-core property in Roche for GBP4.2 million, which successfully reduced debt and created further headroom against our banking covenants. The Group currently has one further non-core property held for sale.

Outlook

As discussed at our interim results in March, we continue to review strategic options for both the Group's Marketing Activation and Books segments, taking decisive action to improve efficiencies and reduce costs. This process is ongoing and we will provide further reports on its progress in due course.

The Board remains confident in the strategy currently being pursued, and in the long term growth opportunities open to the Group. The balance sheet remains sound and we have the necessary cash flow capabilities to support our investment priorities and to further reduce debt.

- Ends -

For further information contact:

   St Ives plc                                                          020 7928 8844 

Matt Armitage, CEO

Brad Gray, CFO

   MHP Communications                                      020 3128 8100 

John Olsen / Giles Robinson / Gina Bell

This information is provided by RNS

The company news service from the London Stock Exchange

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June 14, 2017 02:00 ET (06:00 GMT)