(Source: Daily Mail)
By Geoff Foster, Daily Mail, London
March 15--Mention the name of St Ives to any old market professional and he or she will
immediately wax lyrical about Bob Gavron.
The multi-millionaire and philanthropist founded the specialist printing
group in 1964, took it public in 1985, retired as chairman in 1993 and sold
out in 1998. He was the group's driving force and put it into the FTSE 250 at
one stage. He was a hard act to follow and it has certainly been a uphill
struggle for management to keep the group in profit during and after the
recession.
Buyers chased the shares 9.5p higher to 108.5p after the company
announced the sale of its loss-making magazines business, which prints titles
such as Time Out and the Economist, to private equity company Walstead Newco3,
owner of rival Wyndeham, for £20m -- £15m in cash and 5m in loan notes. The
division lost £5.1m on revenues of £70.5m in 2009/10.
Chief executive Patrick Martell had warned many months ago that its
magazines business was in a decline that would continue long past the end of
the recession. Advertising is being increasingly lured to the internet,
particularly in the area of classified ads.
He repeated yesterday that the company had continued to experience tough
conditions in the magazines unit's markets in recent years, where excess
capacity has exerted significant downward price pressure, resulting in poor
levels of profitability.
The cash proceeds of the sale will not only strengthen its balance sheet
but help it invest in the fast-growing segment of its business, direct
marketing. This involves the printing of leaflets, newspaper inserts and
direct mail products.
Imagination Technologies was another special situation which helped take
dealers' minds off the depressing events on the other side of the world.
Shares of the microchip designer shot up 23.18p to 459.38p in anticipation of
a trading update tomorrow. RBS lifted its target price to 590p from 470p,
saying the group could command 10pc of the notebook market in 2015.
Despite the Nikkei's overnight collapse of 6pc following the disastrous
Japanese earthquake and tsunami which has left thousands dead and homeless,
the Footsie dug its heels in. It traded only 10 points or so lower for most of
the morning with investors obviously reassured to hear that the Bank of Japan
had injected a record 15 trillion yen into money markets and expanded its
asset purchase programme to 10 trillion yen. However, London drifted when Wall
Street opened 115 lower and closed 53.43 points off at 5,775.24. It stands
5.4pc below its February 52-week high.