Double trouble cuts St Ives profits by two-thirds

St Ives, the printing group, blamed overcapacity in the industry for a sharp fall in profits as it warned it saw "no sign" of an upturn.

The company, which prints books, magazines and corporate literature, has suffered from the double blow of the toughest advertising market in decades and a dearth of activity in the City as corporate deals have dried up.

Miles Emery, the chairman, said it remained "very difficult to say" when trading would improve. He added: "One can draw solace that things don't seem to be getting any worse."

St Ives said pre-tax profits in the year to 2 August plunged by nearly two-thirds to £24.3m from £60.5m. This included £9.5m of exceptional items relating to the restructuring programme that saw nearly 700 staff lose their jobs and a printwork in Leeds closed down.

The one bright spot, Mr Emery said, was the group's books division, which has gained market share on the back of the collapse of a competitor. In the past year it has printed autobiographies by Victoria Beckham, Roy Keane and John McEnroe as well as five of the six novels shortlisted for this year's Booker Prize for literature.

The group, which issued a profit warning in January, said that significant overcapacity in the industry had exacerbated the fall in demand from magazine groups and big corporates, prompted by a "sharp reduction" in advertising expenditure.

St Ives also said that trading in its overseas divisions in Germany and the US was also difficult. But the group maintained its dividend and said it would operate a "prudent" policy going forward.

Group turnover fell to £467m from £498m. Its shares rose 6.5p to 305p.