Interim Management Statement

2 June 2009

                  St Ives plc - Interim Management Statement                   

St Ives is today publishing its Interim Management Statement covering the
period since its half yearly statement for the period ended 30 January 2009
which was issued on 31 March 2009.

Total sales for the 39 week period from 2 August 2008 to 1 May 2009, on a
continuing business basis, were 2.7% greater than for the equivalent period for
the previous year. Sales from the previously announced contract wins for Royal
Mail and Sainsbury's went some way towards offsetting the deterioration of
revenues in other areas. However, the mix of sales was less beneficial as the
bought in elements of materials and outwork increased disproportionately,
resulting in lower added value. The US Division was sold on 22 January 2009 and
has been treated as a discontinued business. Sales from the US operations for
the current period and comparatives for the prior period have been adjusted
accordingly.

Overall market conditions continue to be extremely challenging, visibility
remains short, prices are under severe pressure and net margins are depressed
by under utilisation of capacity. Against this background we are making
significant progress with our actions to reduce costs and improve labour
flexibility in order to meet the very demanding market conditions.

Since 31 January, demand for books has been modestly ahead of the same period
last year as we continue to increase market share and sell more added value
services. However, net margin percentage has fallen slightly as publishers
reduce specifications to lower their costs.

In magazines, we continue to gain new titles but these wins have been
insufficient to overcome reductions in paginations, closure of titles and
continued price pressure, in a market that has shown further significant
deterioration since our announcement on 31 March. The outlook remains extremely
challenging, with no prospect of improvement in the short term. Consultation is
underway at our Andover plant to close its total production capacity which
involves a proposed headcount reduction of approximately 100. This is in
addition to the reduction in manned capacity announced in January which has
already reduced headcount by a similar amount.

Demand for direct response and commercial products remains volatile and subject
to price pressure. Sales to multimedia markets, particularly music customers,
continue to fall. Sales of commercial printing arising from group sales efforts
and cross selling to existing group customers have been beneficial but, in
total, these have been insufficient to offset volume and price reductions.
Sales continue to increase from our print management offering. However, whilst
useful, the majority of these are for bought in products and not for our own
manufacture. Consequently, consultation is in progress to close the site in
Crayford which, if implemented, will reduce headcount by around 110.

Exhibition and outdoor media sales remain somewhat below last year in volume
and price as customers continue to moderate this area of discretionary spend.
Our central London operations have been consolidated into the Wandsworth site.
This, together with actions already taken, will lower headcount by around 40
and reduce associated costs.

Overall demand for point-of-sale services continues to run ahead of last year
although net margin percentages are being squeezed due to market overcapacity,
pricing pressure and shorter lead times, making optimal utilisation a
challenge. Customers' campaigns have tended to be smaller but more frequent as
marketeers seek ways to stimulate sales.

Operating cash flow remains robust. In the short term there will be a cash
requirement to fund the cost reductions referred to earlier, the benefits of
which are expected to be realised within an 18 month period, mainly in the next
financial year. Any surplus property and plant will be sold although in the
current economic environment these sales may take some time to realise.


The economic outlook is likely to adversely affect volume and margins,
particularly in magazines, exhibition and events and general commercial
printing. Consequently, we now expect that the operating results for the year
ending 31 July 2009 will fall substantially below market expectations. However,
while we continue to keep all aspects of the business under review, management
actions already taken and those in progress, as outlined above, together with
our strong balance sheet and well invested facilities, will enable us to tackle
the current challenges and stand us in good stead when market conditions
improve.

For further information please contact:

St Ives plc 020 7928 8844

Patrick Martell, Chief Executive

Matt Armitage, Finance Director

Smithfield 020 7360 4900

John Antcliffe

Rupert Trefgarne