PRINTING specialist Communisis has signed two long-term contracts with The Post Office and Government outsourcing firm Liberata, which it said would boost operations in its key target markets.
The Leeds-based company has been reappointed by The Post Office to source and provide IT and stationery to The Post Office's network of 11,500 branches.
It has also entered an exclusive partnership with Liberata, which is now owned by Leeds-based private equity firm Endless, to produce statement and billing services for over 10 local authority clients in a deal worth 2m a year.
Communisis said that both agreements will run for five years.
The company has separately secured a contract extension with Barclays until 2015.
Communisis said trading in the year to December 31 was in line with management expectations.
It said that both the Intelligence Driven Communications (IDC) and Specialist Production and Sourcing (SPS) divisions have shown good momentum during the second half, with solid commercial progress made by the sales team.
The group is continuing its investment programme and has ordered a second state-of-the-art T300 web press from Hewlett Packard to go live in Leeds in the second quarter of 2011.
Communisis said that this investment will increase its ability to produce high volume personalised direct mail.
The company will announce results for the year to December 31 on March 3.
Analysts at Panmure Gordon said the trading update was in line with expectations, with progress in 2010 solid and further momentum in the second half. They said the long-term agreements suggest ongoing faith from a number of important customers.
"However it is early days to suggest progress may be above and beyond expectations and with no change to forecasts or target price, our recommendation moves from buy to hold," they said in a research note.
"There appears little external help at present from marketing budgets, with little concrete signs of pick-ups in the market," they added.
Analysts at Brewin Dolphin said they are forecasting 2010 pre-tax profits of 5.8m and net debt of 15.9m.
"The restructuring plans which drove upgrades to our forecasts in late November are on track. We are currently forecasting EBITA of 9.8m in 2011 and 11.0m in 2012," they said.
Brewin remains a buyer of the stock and set a target share price of 39p. "With the new strategy gaining momentum, we continue to see scope for this to increase as the year progresses," it said in a research note.
The group's shares closed down 1.5p last night at 31.75p.