MARKETING specialist Communisis reported a strong second half to 2011, helped by the award of further work from the UK’s biggest building society Nationwide.
The Leeds-based group said the additional work will result in a fourfold increase in annual revenues to around £10m in 2012.
The group’s shares rose 9.4 per cent on the news to close up 2.5p at 29p.
Under the terms of the contract, Communisis has assumed responsibility for 15 on-site staff at Nationwide’s facility in Swindon, delivering creative and marketing communication services.
Analyst Michael Parkinson at Brewin Dolphin said: “This highlights a trend towards outsourcing following earlier success with Barclays, P&G and Virgin Money providing Communisis with attractive recurring revenue streams.” Brewin Dolphin said it is keeping its ‘buy’ recommendation on the shares with a 52p price target.
“We view double digit margins over the medium term as the key attraction of the investment case alongside continued positive news flow as management seeks to improve performance through contract wins, further cost base reduction and bolt-on mergers and acquisitions,” said Mr Parkinson.
Communisis said that trading for the full year to December 31 was in line with the board’s expectations.
Chief executive Andy Blundell said that the strong second half performance reflected the progress which was being made by the sales team in developing and commercialising the Marketing Services Provider proposition, together with tight operational control.
At the end of last year Communisis was awarded Gold Certification by the Chartered Institute of Purchasing and Supply. CIPS described the company’s sourcing processes as “world class”.