Print and marketing services group St Ives, parent company of Suffolk-based book printer Clays, today reported a 6pc increase in sales but warned that margins remained under pressure.

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St Ives said sales from continuing operations in 18 the weeks from January 28 to June 1 had totalled £110m, with growth led by the marketing services division

“We have experienced further deterioration across our print markets, as demand remains weak and trading conditions fiercely competitive; we have taken further action to reduce costs and continue to win and retain contracts albeit at lower prices,” the group said.

Within marketing services, early trading from Incite, its recently acquired research and consultancy business, had been “very good” and there had also been strong performances from Pragma, its specialist retail consultancy business, and Tactical Solutions, its field marketing business.

“Within Data Marketing, new business performance has been strong although, due to the general economic environment, we have experienced some reduction and deferral of marketing spend, particularly associated with larger projects, across the existing client base,” St Ives said.

On the print site, the books business remained strong and had continued to win market share.

“Margins are being negatively impacted by the publishing industry’s shift towards ordering a greater number of smaller print runs, a dynamic that our recent investment in digital production is targeted to mitigate. This investment is due to come on line within the next three months,” the group said.

The exhibition and events business had started to see some increased activity ahead of the London Olympics, which was helping to deliver an improved performance, and point of sale activity levels remained strong but with “very difficult” conditions in retail markets continuing to drive margins down.

“The market for direct response remains challenging but we have benefited from the closure of our loss-making businesses that produced company reports and CD/DVD related print and continue to seek further efficiency improvement opportunities,” St Ives added.

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