St Ives sells book production business Clays to Italy's Elcograf

Marketing services group St Ives has sold its legacy book production and distribution business, Clays, to Italian printing company Elcograf for £20m.

St Ives has retained the freehold to Clays' operating site in Bungay, Suffolk, which Clays will continue to lease from the group on a long-term basis, and will also retain the pension liabilities associated with the business. It has agreed to make a £2.5m contribution from the proceeds of the disposal to the St Ives Defined Benefits Pension Scheme, while the balance of the proceeds will be used to reduce debt.

In the year to 28 July 2017, Clays - which prints monochrome and colour books and provides associated distribution services to UK and overseas publishers - reported revenues of £77.7m and a pre-tax loss of £1.6m.

Chief executive Matt Armitage said: "Today's sale of Clays is a major milestone for St Ives, which will allow our senior management team to focus entirely on growing the group's strategic marketing businesses, both in the UK and internationally.

"Over fifty years ago, St Ives was founded as a print business. But as our markets and customer preferences changed, we too evolved, reducing our exposure to the commoditised print markets while embracing the digital world, becoming a leader in the marketing services industry through acquisition and organic growth.

"This transformation began in 2010 and, following the recently announced disposals of our legacy print businesses, we are now a more focused strategic marketing group, well equipped to deliver the exciting next stage in St Ives' evolution."

At 1020 BST, the shares were up 6.6% to 92.10p.