Communisis cuts dividend

A downturn in spending on direct mail promotions hit print management and data analysis services provider Communisis in 2009 and this led to it cutting its dividend. Communisis has always been attractive to ivnestors seeking income - particularly from investments in their ISAs. The interim dividend was unchanged at 0.86p a share. The final has been slashed from 1.635p a share to 0.43p a share. The total dividend has been reduced from 2.495p a share to 1.29p a share. Revenues fell from £257.73m to £190.19m, while profits slumped from £12.73m to £2.6m. That is after exceptional costs rose from £589,000 to £2.65m. The bright spot was the technology and services division which increased revenue and profit. Communisis has invested £30m in technology in the past three years. Recently appointed chief executive Andy Blundell is shaking up the management team and has made two high level appointments. Blundell wants to diversify away from the financial services sector and for the company to become involved in replacement technologies for traditional products, such as cheques. Net debt was £16.8m at the end of 2009. There is a £40m deficit on the company's pension scheme, although the balance sheet figure is done on a different basis and that is a deficit of £17.5m . Communisis has a plan to pay down the deficit over 14 years. Communisis is seeing signs of higher levels of marketing activity but trading conditions remain tough. Panmure Gordon forecasts a further decline in underlying earnings per share from 3.48p to 2.71p.