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St. Ives Reports Significant Decline in Print Demand: Will Cut 7% of Workforce

Press release from the issuing company

St. Ives says “demand for corporate financial print remains exceptionally subdued and we have seen no indication of any material improvement in activity levels. Lower levels of advertising expenditure, especially by the leisure and travel sectors, in addition to the reduction in internet and technology advertising experienced earlier, have had a significant impact on magazine paginations and led to the closure of a number of titles. The same factors have also resulted in reduced demand for all forms of commercial and promotional print in the UK, Europe and, particularly, the USA. Demand for music and multimedia products remains weak and volatile. For these reasons, and because markets were already over-supplied, the Group is experiencing reduced volumes and continuing pricing pressure. “In these circumstances, it has become necessary critically to review the cost base of all the Group's businesses and to intensify our cost reduction programme. “As part of this review, St Ives Direct in the UK is today announcing plans to cease web offset printing at its Leeds site, which will take effect following the expiry of the appropriate consultation period. As part of this rationalisation, it is regrettably proposed to make some 125 jobs redundant. In future, the Leeds facility will accommodate St Ives Red Letter, whose operations at Bradford are being transferred to the site, as well as perfect binding and other finishing activities. “In this financial year to date, a total of about 430 jobs, including those referred to above, (representing approximately 7 per cent of the total workforce) will have been made redundant throughout the Group at an aggregate cost of approximately £4 million. “If conditions in the markets which we serve remain subdued, we currently believe that the results for the present financial year as a whole (before taking into account the non-recurring rationalisation costs already referred to) will be somewhat below the lower end of the range of current market expectations. We continue to keep the cost base of all our businesses under active review and further steps in our rationalisation programme may well become necessary. “In the longer term, we remain confident that the Group's competitive position in its principal markets continues to be unrivalled and that, by virtue of its financial strength and our policy of sustained investment in the most modern, flexible equipment, we shall be able to respond rapidly to any upturn in our markets when it occurs.”