In its interim management statement published this morning, the company said that an expected decline in print revenue of almost 10%, resulting from exiting non-profitable markets, had caused a £4.6m decline in group revenue compared to the £110m reported in same period last year.
The decline in revenues was partially offset by the performance of St Ives’ marketing services, which experienced growth of 30%.
Revenue and underlying profit across the marketing services division were reported to be “significantly ahead” of the equivalent period last year.
The company said: “We continue to make good progress with our strategy to reposition the group and build an extended range of added value marketing services whilst exiting commoditised print markets.”
It said that the figures been bolstered by the recent acquisitions of digital marketing agencies Amaze and Branded3, which the company said had integrated well and created a significant digital marketing offering that complemented and strengthened its existing capabilities.
Progress and investment was reported in the development of the group’s consultancy service businesses with the relocation of retail consultancy Pragma to the group’s London head office to make room for planned growth.
Additionally market research firm Incite, which was acquired in February 2012, made the division’s first move overseas with the opening of offices in Singapore and New York.
Meanwhile St Ives’ exhibition and events and point of sale businesses were also reported to have performed well.
In its book printing business Clays, the company said the effect of shrinking run lengths and more frequent reprints was being mitigated by implementing flexible working across the business and investing in digital technology.
The group’s direct mail operation, St Ives Direct, continued to battle with a challenging market, “where excess capacity continues to exert downward pressure on prices”.
The company said: “We keep the cost base of our remaining operation in Bradford under close scrutiny and will take further action to reduce costs should it become necessary.”
The company said that despite ongoing investment in acquisitions and restructuring, the group’s balance sheet remained strong and underlying free cash flow continued to be robust.
It added: “Whilst there is no sign of improvement from the difficult trading conditions across our print markets, our marketing services businesses are performing well, growing and combining to offer a unique and compelling customer proposition.”
Share price dropped 8.5p during morning trading to 140.5p, at the time of writing.