St Ives shares soar as trading remains positive

Shares in marketing company St Ives soared 25% on Thursday as it said, despite cancelling and deferring a number of projects in the final quarter, trading continued to be positive.

In a trading update for the year ending 29 July, the company said it cancelled and deferred a number of projects in the final three months of the financial year in its strategic marketing segment due to growing economic uncertainty, but it said trading was 30% above the previous year. Organic growth was 11%.

The AIM-listed company said it remains alert to the economic uncertainty created by Brexit but it is still committed to growth plans in the strategic marketing segment in the UK and abroad.

However, the marketing activation segment continued to be challenging due to the ongoing pressures within the grocery retail market, as revenue is about 7% below the prior year.

St Ives said it aims to diversify its client base to reduce dependency on the grocery sector as it was recently appointed partner for Whitbread on a long term contract to support all of their brands.

"The Whitbread work, along with additional services now being provided under our contract with HSBC, will help to reduce our dependency on the grocery retail sector in the long term but they have, in the short term, led to contract transition costs being incurred in the final quarter of our financial year."

St Ives’ books segment won business from Penguin Random House and reported that revenue was about 2% above the prior year.

Full-year results will be released on 4 October.

Shares in St Ives were up 25.6% to 123.40p at close.