St Ives struggles as clients slash marketing spend

Shares in book printer and marketing group St Ives tanked 40% to a three-year low after it issued a stark profits warning just six weeks after its half-year results.

It said its largest division — strategic marketing — had been hit by several major clients cancelling or putting off spending, particuarly on digital campaigns because of global economic uncertainty.

The point-of-sale marketing division has been hit by the supermarkets price war. Revenues are down 11%.

Its traditional book-printing arm, Clays, saw revenues down 1% on a year ago as publishers shorten their print runs and slim down warehouse space. The business printed Girl Online by Zoella which was the fastest-selling debut novel, according to publisher Penguin.

Matt Armitage, chief executive, said: “It is disappointing to have to report this marked deterioration, but we remain clear on our long-term growth priorities and have the financial strength to continue to support our strategic ambitions.”

House broker Numis cut this year’s profit forecast from £38.3 million to £30.4 million and next year’s from £42.5 million to £32.4 million. Shares fell 87.55p to 137.7p.