Communisis losses overshadow underlying progress

Despite the announcement of a major new contract and strong underlying progress, marketing communication services Communisis saw its shares decline on Thursday as it slipped into full year losses.

Despite revenues rising 27% to £343m, profits before tax of £6.27m in 2013 turned into losses of £13.26m in 2014 due to an exceptional goodwill impairment of £21m.

Overseas revenues grew 36% to £66.5m driven by its Deploy segment.

Showing confidence in the business, Communisis hoisted its dividend by 11% to 2p per share for the year.

Also on Thursday, the group revealed it secured an extended six-year contract with AXA, where it will provide creative, print, digital and postal distribution and document management services.

During the full-year, the company has entered a partnership with Lloyds Banking Group, providing the imaging and processing of incoming mail from customers during the next ten years.

Chief executive Andy Blundell said: "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."

N+1 Singer brokers remained positive with the outlook, saying the shares continued to trade at an "unjustified discount to it peers". The analysts added that Communisis is making "good progress in delivering its strategic objectives".

Shares fell 5.33% to 57.75p on Thursday at 14:37.