Communisis in warning on profits

PRINTING group Communisis has issued a profits warning after admitting that “challenging market conditions” are continuing to affect its business.

In a trading update following the end of its half year on June 30, the Leeds-based group said that its bigger customers have delayed decisions on its higher margin services such as data analysis projects, business change initiatives, cheque rebranding and personalised marketing campaigns.

Its shares fell by, 2.75p – more than 12% – last night to 19.5p.

In its interim management statement in May it said that its lower margin business had also seen a reduction in volumes and this has also continued and earlier this month it said profits would be hit by a planned Govenrment ban on credit card cheques which it prints for major financial customers.

The group said that it expects these poor trading conditions to continue during the second half of its financial year although believes profits in the second half will be better than those achieved in the first half.

Communisis said it intends to maintain its interim dividend at the same level as last year.

Steve Vaughan, Communisis chief executive, said: “There is no question that our customers are keen to move towards a model which allows them to achieve a more profitable and effective marketing approach, but the downturn has meant that decisions around buying these services are being delayed.

“Although volumes have been more encouraging in recent weeks, the impact that customer delays are having on our revenues and margins has led us to take a more cautious view of the outcome for the year as a whole.”

Communisis will announce its half year results on August 27, 2009.