The share price of St Ives (SIV) all but halved after the strategic marketer revealed that its underlying pre-tax profit for the year to July would be "materially below" current expectations. More worryingly, management indicated that deteriorating market conditions were likely to also impact the group's next financial year.
Although trading in the eight months to the beginning of April had been "broadly in line", matters have deteriorated significantly over the past few weeks. This is borne out by the performance of the group's Marketing Activation arm, where revenue is running approximately 11 per cent below the comparable period in 2015. St Ives pointed to increased caution on the part of clients, which has stalled the allocation of marketing budgets, resulting in significant projects being deferred or cancelled.
