Communisis to restructure production facilities to cut costs

17th Jun 2013 08:38

Communisis, which provides customer communication services, has announced plans to restructure production facilities and reduce indirect overheads in an effort to cut costs. The group will end cheque production at the Trafford Wharf site in Manchester by year end. Production will move to the Communisis site in Leeds which will be reconfigured with a substantial amount of the more commoditised direct-mail print being outsourced and managed instead through the third party supply chain.The more specialist, higher margin direct mail and other production will remain in Leeds. Communisis said the changes will provide the capacity needed to accommodate the cheque production transferred from Trafford Wharf and the printing of other transactional communications, acting as a supplementary facility for the group's operations in Liverpool.The changes are expected to yield annual cost savings of £4.0m from 2014 and give rise to a net exceptional charge of £3.5m in 2013, with a cash cost of £2.8m in the second half of 2013 and £0.7m in the first half of 2014. "These plans are aligned with the group's strategy to reduce its exposure to the more commoditised sector of the print market by focusing on higher margin specialist production and to improve margins by reducing costs and improving capacity utilisation," said Chief Executive Andy Blundell.Shares rose 0.46% tyo 54.50p at 09:18 Monday.RD