Printing specialist increases global presence

The Leeds-based communication services company, which has signed contracts with Lloyds Banking Group and Yorkshire Building Society, is also gearing up to make acquisitions.

In the six months ended June 30, the company’s profit from operations, before exceptional items, rose 19 per cent to £5.1m.

Turnover was eight per cent higher at £121.2m. Overseas revenues grew to 13 per cent of total revenues. In the same period last year, overseas revenues accounted for just five per cent of sales.

The interim dividend was also nine per cent higher at 0.60p.

Communisis revealed that £20m had been raised as growth capital for investment in new contracts, restructuring costs and small acquisitions.

The bank debt was refinanced in July, with a £55m revolving credit facility committed until March 2018.

Significant new contracts included a nine-year deal with Nationwide Building Society. The company said its restructuring was ongoing, and it was being combined with site consolidation.

Communisis chief executive Andy Blundell said yesterday: “Communisis has continued to execute its strategy for profitable growth, delivering results that give the board confidence for the remainder of the year.

“There have been a number of very significant developments during the first half of 2013, especially the long-term contract wins with Lloyds Banking Group and Nationwide Building Society together with a substantial geographical expansion of our services to P&G.

“The group is well placed to take advantage of fast developing market opportunities, due to its strengthened financial position and its reputation for production excellence and innovation.”

Apart from the UK, Communisis is active in 14 countries. In recent months, it has delivered projects in places as far afield as Turkey and North Africa.

Cheque production at the group’s Trafford site in Manchester will cease by the end of 2013, and production will move to the Communisis facility in Leeds.

Yesterday, Mr Blundell said Communisis had a “reasonable pipeline” of potential acquisitions.

Analysts from Cenkos said: “The six months to June has been a period of outstanding progress for Communisis with new contract wins, strong overseas expansion and a refinancing of bank debt. The business has significant momentum and management is buoyant with regards to the group’s prospects.

“Reflecting today’s results and the significant contract win announced last month, we are upgrading our underlying 2014 earnings forecasts by six per cent and release new 2015 forecasts indicating further earnings growth of 26 per cent. We reiterate our buy recommendation.”

Analysts from N+1 Singer were also impressed with the trading update. In a note, N+1 Singer said: “Communisis has continued to make strong progress during the period with restructuring and contract wins implemented and secured. The third prong of strategy (merger and acquisitions) is being actively pursued. The focus on higher value, better quality revenue streams will continue to drive a re-rating of the stock.”

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