Communisis in Leeds has warned that its profits will be lower than expected, because of the performance of its new acquisition, Life.
The Leeds-based group made the announcement this morning and its share price fell to a record low for the year.
It acquired Life Marketing Consultancy in January this year, with chief executive, Andy Blundell saying at the time that the shopper marketing company would “broaden our agency proposition” and “benefit our fastest growing and higher margin business segments.”
However, this morning, the blame for the profits warning has been placed entirely on the new addition.
In a statement, it said that Life was “taking longer than anticipated to contribute its projected earnings, due to some reduction or deferral in spend by existing clients and to the phasing of certain new business opportunities.”
It did add that the pipeline for 2016 and the “strategic rationale” for its acquisition “remains clear.”
In spite of the warning, Communisis expects “double-digit” growth in operating profit.
“Communisis will show good growth overall and increased cash generation in 2015, despite being held back in the short term by a slower than expected start at Life. Recent contract wins and renewals together with the health of our pipeline, provide positive indicators of the Group’s prospects for 2016,” stated Blundell.