Walstead Interim Results: Further Progress in a Diminishing Market

Press release from the issuing company

LONDONWalstead Investments Limited, owner of Wyndeham Group, the leading UK magazine and commercial printing group, announces its unaudited financial results for the six months’ trading to 30 June 2013.

EBITDA rose 1.1% to £4.4 million (2012: £4.3 million) on turnover down by 4.9% to £56.1 million (2012: £59.0 million). The sales result was caused principally by a 5.6% decline in web offset volumes which were partially offset by a 1.0% increase in prices. Comparative turnover in 2012 was flattered by contracts associated with the London Olympics.

Operating profit was £2.0 million (2012: £2.2 million) and profit before tax was £0.8 million (2012: £0.4 million) after incurring £0.6 million of interest charges (2012: £0.8 million) and £0.6 million of exceptional charges (2012: £1.0 million).

The Group continued to reduce its outgoings: internal direct costs fell by 7.7% (£1.7 million) despite energy prices increasing by 6.9%. Overheads decreased by 9.1% to £7.2 million (2012: £7.9 million). The number of full time employees (FTEs) dropped by 8.9% to 1,018 at 30 June 2013 and the gross labour cost was 11.1% lower at £17.0 million (2012: £19.2 million).

Productivity continued to improve with key performance indicators of manufactured turnover per FTE and added value per FTE increasing by 3.3% and 2.8% respectively.

Capital expenditure in the period consisted of adding new services and products to supplement the Group’s core printing and binding faculty. Investment included a new Sitma mailing line at Wyndeham Heron.

Cash management and debt reduction were on budget: net debt owed to the Group’s bankers at 30 June 2013 was £27.7 million (30 June 2012: £30.5 million) after payment in April 2013 of the final instalment of the £5.0 million deferred consideration for the St Ives Web acquisition.

Mark Scanlon, Walstead’s chairman, said: “I am pleased to report that during the period we renewed and extended a number of prestigious print contracts including Condé Nast (to end 2017), The Economist (2017), The Spectator (2016) and The Financial Times (2016). Our contracted customers now represent 73% of net turnover and endow the Group with a stable platform from which we believe we can develop a successful long-term business.

We remain sanguine about our prospects in this sector despite the interminable market contraction. The 5.6% decline in our web offset volumes was encouragingly less than the 8.5% drop in consumer magazines recently reported by the ABC. Our full year EBITDA and net earnings should be similar to the 2012 result when both turnover and profit were stronger in the cyclical second half.”


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