Communisis makes £10.6m investment in West Yorkshire

ROLLING out a £10.6m investment in a West Yorkshire partnership was a key part of a busy year for marketing group Communisis.

However the Leeds-based company, which employs around one-third of its 2,200 staff in Yorkshire, took on a £21m goodwill impairment that resulted in a pre-tax loss of £13.3m.

Communisis has developed a centre of excellence within Lloyds Banking Group’s (LBG) site at Copley, near Halifax, and spent £9.2m during 2014, including £3m on buying capital equipment from LBG. A further £1.4m will be spent during the current year. It handles more than 30m incoming documents a year for LBG and its brands, including TSB, Halifax and Scottish Widows.

However the group made further cuts at its Leeds facility which, on top of previous restructures, cost £3.3m. It also took the decision to incur a £21m goodwill impairment on acquisitions made more than 10 years ago, based on “a prudent view taken by management of the long-term reduction in demand for these more mature product lines”.

Before taking these exceptional items into account, Communisis achieved a 21% increase in its adjusted operating profit, which rose to £16.0m, as turnover jumped 27% to £343.0m. However, after exceptionals, it made a pre-tax loss of £13.3m.

Net debt increased £10.2m to £35.9m, because of acquisitions and investments, which included December’s purchase of shopper marketing agency Life Marketing Consultancy in a deal that could rise to £23.3m.

Communisis chief executive Andy Blundell said: “Communisis has delivered another substantial improvement in adjusted operating profit and an average annual growth rate of 20% over a five year period.
 
“2014 has been a successful year during which we have built and launched a new digital agency, continued to win important contracts for outsourced customer communication services and expanded rapidly overseas.”