St Ives plc

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St Ives plc

St Ives House
Lavington St
London SE1 0NX
United Kingdom
Telephone: (+44) 171 928-8844
Fax: (+44) 171 633-9116
Web site: http://www.st-ives.co.uk

Public Company
Incorporated: 1964
Employees: 5,124
Sales: £452.2 million (US$718 million) (1999)
Stock Exchanges: London
Ticker Symbol: SIV
NAIC: 323119 Other Commercial Printing; 323111 Commercial Gravure Printing

St Ives plc is one of the United Kingdom’s leading commercial printers and that country’s leading printer of financial documents. St Ives and its subsidiaries provide printing services for book and magazine publishers; the direct response market; multimedia products, including CD and CD-ROM sleeve art; and the financial community. The company specializes in just-in-time and last-minute orders, making it especially popular among magazine publishers. The company prints such well-known U.K. magazines as the Sunday Telegraph, the Economist, Vogue, Heat, Computing, and Top Gear. In all, St Ives prints more than 600 magazine titles for such publishers as VNU, Reed Business, EMAP, and others. Magazine contracts account for some 30 percent of the company’s sales. St Ives’s strength as a printer for the mergers-and-acquisitions market, IPOs, annual reports, and prospectuses, has enabled the company, through subsidiary Burrups, to capture the lead in the United Kingdom’s financial printing market. In the multimedia market, the company has printed the CD sleeve art for such artists as Cher, Madonna, Aerosmith, Tina Turner and Boyzone. While music printing remains a limited part of St Ives’s sales, the company has made stronger inroads in printing for the computer and CD-ROM markets. Book printing also plays a key role in the company’s sales, and the company, particularly through subsidiary Clays Limited, prints books for much of the United Kingdom’s major publishers, and the company regularly prints such prestigious (and best-selling) titles as the winners of the Booker and Whit-bread awards. The fast rising segment of St Ives is its direct-marketing division, which prints leaflets, newspaper inserts and direct-mail products. The company has targeted this division not only for growth in the United Kingdom, boosting its operations with the acquisition of rival Hunters Armley in 1998, but also overseas: St Ives has established strong positions in the U.S. market, particularly through the acquisition of Perlmuter Printing in the mid-1990s, giving the company a base in Florida; and in the German market, with the acquisition of Johler Druck in 1995. Direct-mail printing accounts for approximately one-third of the company’s revenues. St Ives’ willingness to invest heavily not only in acquisitions but also in modernized technology has long set it apart from its rivals.

The Formative Years: 1960s–80s

St Ives was founded by Robert Gavron in 1964. Gavron, a lawyer and barrister, had entered a small London-based printing company in 1955 as an assistant. By the early 1960s, Gavron’s experience led him to make an offer to buy the company. With a loan of £5,000, Gavron bought the company, and renamed it after one of its printing plants, which was located in the seaside resort town of St Ives.

Gavron began building St Ives into a strong regional printer, achieving much of the company’s growth internally. In the 1980s, however, Gavron decided to make the leap into the leading ranks of printers. Taking St Ives public in 1985, Gavron raised the capital to begin making a series of acquisitions, buying up many of its smaller rivals in order to build up its market position.

These acquisitions propelled St Ives to the top of its market, making the company the United Kingdom’s largest commercial printer. One of the company’s most important purchases came in 1986, with the acquisition of the Clays Limited, a strong player in the book printing market located in Bungay. The following year, St Ives added to its printing portfolio when it acquired financial printer Burrups Limited, which had been in business since the early 17th century and which counted among the United Kingdom’s most prominent financial printers. In this way, St Ives gained a strong share of the bustling financial printing sector—at a time when the financial community was undergoing a wave of mergers and acquisitions.

By the end of the 1980s, St Ives began eyeing other markets, and particularly the vast commercial printing market of the United States. In 1989, the company acquired A.D. Weiss Printing, located in Hollywood, Florida. This acquisition brought the company into the U.S. direct-mail market, a printing category that rapidly grew into one of the company’s most important revenue sources. After the purchase, the Florida subsidiary was renamed St Ives Inc. and became the basis for the company’s further growth in the United States.

Back home, however, the recession of the early 1990s caught up with the company. By 1991, St Ives was experiencing a cut in its profits. The entire printing industry was under pressure, with many of the company’s competitors struggling to stay afloat. Despite its own financial difficulties, St Ives maintained its steady investment program, and began concentrating especially on modernizing its equipment. These investments were later credited with helping the company recover more quickly from the recession than its competitors, enabling St Ives to build an even stronger position in its home markets.

Roughing It in the 1990s

In the meantime, the company continued to face profit pressures. The company’s financial printing activities were crimped by the nervousness of the stock market—which saw many IPOs, a primary source of St Ives’ financial printing activity, put on hold. At the same time, the worldwide cutback in advertising spending—one of the more immediate results of the recession—led to a sharp decrease in the company’s magazine printing business. As publishers cut back on pagination, St Ives’ revenues in the sector, one of its largest revenue producers, also began to shrink. The company’s troubles in the United Kingdom were mirrored in its operations in the United States, which began losing money in the early 1990s.

Robert Gavron retired from his position as company chairman in 1993, taking a non-executive directorship while still holding a sizable share in the company he had built over 30 years into the foremost U.K. commercial printer. Gavron maintained his shareholding through the middle of the decade, finally selling the majority of his interest in 1998.

Gavron was replaced by Miles Emley, who continued to lead the company into the new century. By 1994, the worst of the recession seemed to have passed. St Ives was once again seeing a rise in its contracts—particularly in the crucial magazine markets, as advertisements once again began to fill out pagination. The company was also helped by the award of contracts to print documents relating to a new round of company privatizations in France. Despite rising paper costs—which caused the magazine sector to stagnate for a time in 1995—St Ives began to see renewed profit growth. The company’s strong investment program, which saw St Ives invest more than £125 million over the first five years of the decade, had succeeded in modernizing the company’s machine park—allowing them to keep printing costs low.

As St Ives came through the end of the recession in the mid-1990s, it began to take steps to lessen its exposure to the cyclical nature of its core markets—books, magazines and financial printing. The company targeted two new areas for future growth: direct mail, a market which was growing strongly in the United Kingdom at mid-decade; and multimedia, particularly printing the inserts for CDs and CD-ROMs, a sector that saw double-digit growth in the second half of the decade. At the same time, St Ives continued to profit from its ongoing investment program, establishing its leading position for turnaround times—supplying overnight delivery to the new boom in mergers and acquisitions, takeovers, and IPOs.

In 1995, the company stepped into new territory when it acquired Johler Druck, of Germany. This acquisition not only gave St Ives its first entry onto the continent, it also strengthened its direct-mail activities. By the end of the decade, direct mail became one of the company’s top revenue regenerators, with as much as one-third of annual sales provided by this sector. Nonetheless, the United Kingdom remained the company’s chief base of operations, producing some 75 percent of sales.

One year after the Druck acquisition, the company moved to bolster its U.S. business, acquiring Ohio-based Perlmuter Printing, further strengthening the company’s direct-mail position there. Back home, the United Kingdom and Europe as a whole began to see steady increases in the number of mergers and acquisitions, and particularly so-called megamergers, as well as hostile takeovers, as the European Union moved closer toward the single currency market. These developments gave a boost to St Ives in 1997, as it was called on to print many of the related financial documents. The deregulation of the U.K.’s building societies (a form of cooperative banking), which allowed the building societies to convert to publicly listed status, proved a windfall for St Ives, as the company won the contracts to print the documents for some of the largest of the converting building societies.

Company Perspectives:

We have continued to strengthen our competitive position in our principal markets. This has been achieved through consistent investment in people, systems and equipment to an extent unrivaled by our competitors. The investment planned for the coming years will further consolidate our position. Our commitment to customer service is of paramount importance in retaining and growing our business.

In the late 1990s, St Ives continued to build its direct marketing business. In 1998, the company acquired rival U.K. printer Hunters Armley. While the move was greeted with acceptance by industry analysts, by the end of the decade the company’s increasing reliance on direct marketing had begun to raise flags. The rise of the Internet and growing belief in a coming Internet-based economy suggested that direct mailing would soon become a thing of the past—as more and more marketers turned to the Internet, rather than printed mailings.

If technology appeared to threaten St Ives from one side, it held out promise from another. By the end of the 20th century, St Ives was preparing to move fully to next-generation digital printing systems, promising more flexibility and still quicker turnaround times. Having built a leading position in the rapidly maturing British market, St Ives began to look toward the United States and Europe for future growth, promising new acquisitions in the early years of the century. At the same time St Ives announced its continued commitment to investing in its future, promising some £100 million in investments through the year 2002.

Principal Subsidiaries

Bryer & Spencer Limited; Burrups Limited; Burrups Japan KK; Clays Limited; DisplayCraft Limited; Harlequin Colourprint Limited; Hunters Armley Limited; Johler Druck GmbH (Germany); Red Letter Marketing Services Limited; Smiths Colour Printers Limited; St Ives Data Management Limited; St Ives Graphics Media Limited; St Ives Multimedia BV (Netherlands); St Ives Multimedia Limited; St Ives Inc. (U.S.A.); Sevenoaks Print Finishers Limited; The Perlmuter Printing Company (U.S.A.); Westerham Press Limited.

Principal Competitors

Banta Corporation; Experian Inc.; Bertelsmann AG; Merrill Corporation; Big Flower Press Holdings, Inc.; Quebecor Inc.; Bowne & Co., Inc.; R.R. Donnelley & Sons Company; Times Publishing.