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Walstead Announces Positive Financial Results for 2011

Tuesday, July 03, 2012

Press release from the issuing company

Walstead Investments Limited (“Walstead” or “Group”), owner of Wyndeham Group and now incorporating the former St Ives Web businesses, announces its financial results for the twelve months ended 31 December 2011. Helped by the acquisition of St Ives plc’s magazine printing division in April 2011 and subsequent restructuring, audited Group turnover increased to £128.0 million (2010: £83.0 million) and EBITDA (earnings before interest, tax, depreciation, amortisation and exceptionals) rose from £1.4 million to £6.9 million.

These results were heavily impacted by an extensive planned restructuring programme during the year which involved the closure of three web offset sites - Wyndeham Impact in Basingstoke, Wyndeham Apple in Warrington, and Wyndeham Plymouth, and the rationalisation of Wyndeham Roche and the former St Ives Web head office. Trading was also affected by a fire at Wyndeham Heron in July 2011. Overall headcount at the Group has fallen from a peak of 1,501 in April 2011 to 1,145 now. Restructuring resulted in exceptional costs of £9.6 million which, together with a £9.6 million depreciation charge, a loss of £7.7 million on the disposal of fixed assets, an impairment charge on fixed assets of £1.3 million and interest charges of £1.7 million, contributed to a total loss of £19.5 million. Capital expenditure in the period was well below the depreciation charge: this should remain the case for years to come owing to the substantial investment in plant and machinery made by Walstead companies in recent years.

Walstead has also been busy improving its balance sheet by paying down debt. In April 2011 it entered into a three-year £41.6 million asset-based lending facility with The Royal Bank of Scotland Group which provided funding to acquire St Ives Web for £20 million and to maintain ongoing working capital. Net debt owed to RBS at the end of 2011 was £28.5 million.

Trading for the current year shows improvement following the cost reduction programmes of 2011. Unaudited turnover in the first five months of 2012 was £50.2 million (2011: £45.5 million) and EBITDA was £5.6 million (2011: £1.1 million). Looking ahead, the Group anticipates another year of solid progress.

Mark Scanlon, Walstead’s chairman, comments: “We have no illusions about the future of our industry in the face of the digital threat: it’s in long-term decline. The industry needs to adapt fast to structural change. That’s why Walstead has single-handedly been consolidating and rationalising the commercial web offset sector in the UK, while our key competitors have been totally supine.”


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