01 December 2017


Marketing services company St Ives PLC has said that its contract with J Sainsbury PLC had not been renewed.

The contract, which was part of St Ives marketing activation segment, was for the production of in-store marketing materials. The current contract will end on December 2 and will not be renewed by Sainsbury's, the FTSE 100 supermarket chain.

The contract represents approximately 3.5% of St Ives total annual revenue. In the financial year that ended July 29, 2016, St Ives reported GBP367.5 million in total revenue, making the contract worth about GBP13 million per year.

"Management will be initiating actions to reduce the cost base of the segment to mitigate the impact of the non-renewal, with associated one-off cash restructuring costs of approximately GBP1 million within the financial year ending August 3, 2018", the company said.

St Ives said it doesn't expect the non-renewal of the contract to have "any impact" on its trading outlook for financial 2018, due to a "stronger than expected trading outlook within the group's strategic marketing businesses."