Better than expected net debt helps figures at Communisis

The Leeds-based group said that plans to reorganise the Leeds Direct Mail business are progressing to schedule.

The business, which employs about 500 people, has been hit particularly hard by the recession with around 50 job cuts.

"The Leeds Direct Mail business was the largest factor in the reduction of group profits, but it remains a critical part of our business and we will invest in it," said chief executive Andy Blundell.

He believes the division will see an improvement this year.

Following the redundancies in Leeds, Mr Blundell is keen to take the business forward.

"This is a Leeds-based business and we'll keep a big presence in Leeds. We are reshaping the business as for our long term survival we have to shift it," he said.

Communisis also announced plans yesterday to change the way it reports its results. In future it will have two divisions – Intelligence Driven Communications and Specialist Production and Sourcing.

Under new chief executive Mr Blundell, Communisis is keen to target direct mail to "an audience of one".

In essence, these are mailshots that recipients want to open because they offer money off or a good deal.

"Most consumers complain about the amount of unwanted mail," said Mr Blundell. "What we are doing is saying 'Dear so and so, here is something targeted at you and only you'. That's the marketer's holy grail. They are putting a lot of time and effort into it."

The new approach has helped the company move away from the beleaguered financial services sectors into more lucrative markets.

Over the past year, the group has signed up a number of new customers outside of the financial sector, including Tesco, T-Mobile, William Hill, Ogilvy and Wolseley.

Mr Blundell said the group was hit hard by the collapse in the financial sector which accounted for about 60 per cent of the group's business when the recession caught up with the financial services sector in 2009.

"HBOS was doing a lot of acquisition mailing in 2008, but that tap was turned off completely, " he said, referring to the bank's bail-out by the Government and rival banking group Lloyds.

"We were about 60 per cent financial services, but it's probably heading towards 50 per cent now," he said.

But the group has no intention of giving up on its big banking clients which include Barclays, HSBC, parts of Lloyds and Santander.

Once the economy drags itself out of recession these are likely to become lucrative areas once again.

'Perfect storm'

Earlier this year, Communisis chief executive Andy Blundell blamed a "perfect storm" of recession, meltdown in the financial sector and a sharp fall in bank marketing for a plunge in 2009 profits.

But despite the difficulties, all parts of the group stayed profitable in 2009.

The group, which has diversified from traditional printing to specialise in marketing campaigns, targeted mailouts and email marketing, made operating profits of 7.2m in 2009, down from 15m in 2008.