St Ives PLC (LON:SIV) saw its market value jump by 25% this morning after the marketing services group delivered a reassuring trading update and said it continues “to review strategic options” for both its Marketing Activation and Books businesses.
In a statement, the small cap firm said: “Following a challenging first half of the financial year, the first four months of the second half have, as anticipated, delivered a much improved performance; our expectations for the full year remain unchanged.”
In reaction, St Ives shares were 25%, or 9.5p higher at 47.0p in early morning trading.
St Ives said revenue for its Strategic Marketing segment for the first four months of the second half year was approximately 12% above the equivalent period in the prior year, with like-for-like revenue growth approximately 7%.
Grocery sector pressures weighing on Marketing Activiation
But, it added, trading conditions within the Marketing Activation segment continue to be very challenging due in large part to the ongoing pressures within the grocery retail sector, the segment's largest single market.
St Ives said revenue for its books business in the first four months of the second half was approximately 12% ahead of the equivalent period in the prior year, compared to an increase of 15% in the first half, with continued pressure on operating margin.
The firm said that having unveiled a review of strategic options for Marketing Activation and Books with its interim results in March, this process is ongoing and it will provide further updates on its progress in due course.
Long term growth opportunities
St Ives concluded: “The Board remains confident in the strategy currently being pursued, and in the long term growth opportunities open to the Group."
“The balance sheet remains sound and we have the necessary cash flow capabilities to support our investment priorities and to further reduce debt.”
Analysts said that a better second half suggests slightly firmer momentum into 2018, and this alongside the recent property sale should be helping St Ives share price.