Shake-up at print group to save £4m per year

The company also said that at its Leeds site at Cross Gates, where it employs around 400 people, “a substantial amount” of the remaining, more commoditised direct mail print is to be outsourced and managed instead through the third party supply chain. It said this work will be outsourced within Yorkshire.

The more specialist, higher margin direct mail and other production will remain in Leeds, Communisis added.

Speaking to the Yorkshire Post, Andy Blundell, chief executive, said the plan to restructure its production facilities represented “quite a major strategic change”.

“We are re-purposing the Leeds facility because previously it has been wholly reliant on direct mail as a market. What we are doing is reducing that reliance and making it more specialist in terms of some direct mail but also involvement in the security work which is coming across from Trafford and also transactional work where it will act as a contingency site to other locations.”

At the Manchester site, 120 people are currently employed, of which 90 are “at risk”, subject to consultation. Mr Blundell said: “Of the 90 or so positions at risk that will be partly offset by the fact that we are establishing a small representative office in Manchester and we are offering some relocations opportunities both to Liverpool and to Leeds.”

Asked whether there will be any reductions in headcount at the Leeds site, Mr Blundell said: “We haven’t at this point indicated any change in structures or the numbers that are being employed but there will be further announcements down the line.

“But we have a strong presence in Leeds and we intend to keep a strong presence in Leeds, but what we’re trying to do is keep the engine of Communisis appropriate to the market that it serves.”

Communisis claims to be at the forefront of high-speed colour digital technology following the installation of state-of-the-art printers in Leeds and Liverpool. In Leeds, the printers are playing a major role in Communisis’ direct mail operations.

Two HP T300 lines were installed in the Leeds facility during 2010 and 2011.

Communisis, which is now headquartered in London, but still has its registered office in Leeds, said that the plan is for cheque production at the group’s Trafford Wharf site in Manchester to cease by the end of 2013, subject to consultation. The group also said that indirect overhead costs will be further reduced as “processes and support services are streamlined to improve efficiency”.

Mr Blundell said that cheque production is still a long-term market for the group, adding: “Obviously, the demand for cheques is reducing overall, but people tend to get the wrong end of the stick, because particularly younger people, who tend to write less cheques, assume that the decline is far greater whereas in fact the usage of cheques is still reasonably high.”

The changes are expected to yield annual cost savings of approximately £4m from 2014 and give rise to a net exceptional charge of £3.5m in 2013, with a cash cost of £2.8m in the second half of 2013 and £700,000 in the first half of 2014.

Earlier this year, Communisis announced improved annual profits for the third year running. Pre-tax profits rose 62 per cent to £6.8m in the year to December 31, 2012. Turnover rose from £25m to £30m.

Before exceptional items, profit from operations grew 23 per cent to £11.6m.

The company revealed in November that it was closing a cheque personalisation plant in Lisburn, Northern Ireland, with the loss of 46 jobs, while it was to cut 16 jobs at its Leeds plant.

Communisis also restructured in Leeds in 2009 as recession, meltdown in the financial sector and a sharp fall in bank marketing hammered profits and sales and forced it to cut jobs. Mr Blundell said yesterday that the headcount in Leeds has “been broadly constant” over the past year.

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