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Interim results for six months ended 30 June 2018

Company news • 02 August 2018


Leading provider of integrated business services, Communisis plc (LSE: CMS) reports interim results for the half year ended 30 June 2018.

Commenting on the results Communisis Chief Executive, Andy Blundell, said:

“Communisis traded positively in the first half of 2018 and total sales were up 9%. Outbound statement volume grew with an increasing digital proportion but the volume of marketing communication has seen an initial reduction as an effect of the introduction of the General Data Protection Regulation (GDPR) in May. The Group won two significant contracts; the first with Zurich, a new insurance client, and the second with an existing client in Fast Moving Consumer Goods (FMCG) for a major expansion of services. Trading saw good free cash flow and net debt materially lowered. There was also a marked reduction in the pension deficit. Overall expectations for FY 2018 are unchanged.”


Positive trading

  • Total revenue of £188.6m (H1 2017 £173.5m).
  • Overseas revenue at 34% of total (H1 2017 33%).
  • Adjusted profit before tax of £6.5m (H1 2017 £6.4m).
  • Profit before tax of £4.0m (H1 2017 £4.8m).
  • Adjusted earnings per share of 2.5p (H1 2017 2.4p).

Good free cash flow and net debt materially lowered

  • Net operating cash flow at £8.4m (H1 2017 £7.5m).
  • Free cash flow at £5.5m (H1 2017 £6.5m) after increased capital expenditure of £2.9m (H1 2017 £1.0m).
  • Net debt reduced to £23.7m (H1 2017 £28.3m).
  • 5% proposed increase in interim dividend to 0.93p (H1 2017 0.89p).

Marked reduction in the pension deficit

  • Pension deficit reduced to £32.4m from £42.0m at 30 June 2017.

All financial comparatives have been restated to reflect the changes as a result of the transition to IFRS 15 Revenue from Contracts with Customers (IFRS 15).



H1 2018

H1 2017


Total revenue (£m)




Adjusted operating profit (£m)*




Adjusted profit before tax (£m)*




Profit before tax (£m)




Adjusted earnings per share (p)*




Proposed interim dividend per share (p)




Net operating cash flow (£m)**




Free cash flow (£m)**




Net debt (£m)




# The 2017 figures are restated to reflect the changes as a result of the transition to IFRS 15.

* Adjusted metrics are stated before exceptional items and the amortisation of acquired intangibles to give a better understanding of the underlying performance of the Group. Adjusted earnings per share is diluted and excludes the after tax effects of exceptional items, amortisation of acquired intangibles and certain tax items in respect of prior years.

 ** Net operating cash flow represents net cash flows from operating activities before investments in new contracts. Free cash flow represents net operating cash flow less net capital expenditure.



Encouraging progress has been made against the Value Enhancement Programme launched in March 2018:


  • We continue to transform our clients’ customer communications, with the emphasis primarily on digital within a multi-channel delivery. As an example, Communisis has won a five-year contract with Zurich Insurance in the UK for the provision of these services.
  • During H1 2018, 14% of outbound communications were delivered via digital channels vs 9% in H1 2017.
  • New technology partnerships in place with the company Striata to further enhance our digital transactional delivery and with Idomoo for personalised video.
  • Implementation of the cloud-based software platform Noosh is progressing to support the next phase of growth in Brand Deployment. The system will be ready for launch and rollout from September through to Q4 2018.
  • Further rollout of our proprietary digital fraud prevention technology, eUCN, in our security printing business – now adopted by the majority of major UK retail banks.


  • New contract: Communisis has won a major expansion of its relationship with a global FMCG brand owner for a three-year term. Existing coverage in Poland, Portugal and Spain will now expand to include Italy and the Middle East, the latter serviced from our Dubai hub. Sales will start to increase from the second half of this year and we expect this client account to scale rapidly.
  • A contract has been renewed with Bacardi for a further three years, operating in nine European countries, expanding our scope of services to include permanent point of sale.
  • Editions Financial, the content marketing agency, continues to grow US clients from its New York base, with recent wins in the banking sector.
  • The Hong Kong operation is now live for the direct sourcing of Premiums (gifts with purchase), with a local team recruited and a direct supply chain established.
  • Overseas revenue now represents 34% of Group revenue (H1 2017 33%).


  • We have significantly reshaped our approach to marketing insight and commercial decision making with a number of senior hires and the appointment of third parties in support.
  • A more rigorous approach has been adopted to the way we manage our new business pipeline and we have established a detailed process for managing prospects through to award.


Overall, the strong order book of long-term client commitments plus the new contract wins we are announcing, give us good visibility for the second half. Expectations for the full year are therefore unchanged.


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