A printing business, with major interests in the Midlands, and involved in providing all of Marks & Spencer's point-of-sale material, disclosed "serious" accounting errors yesterday.
St Ives, one of the UK's largest printing firms, said annual profits would be £2.8 million lower than current market forecasts, reflecting the problems at the company's point-of-sale printing division.
It said costs were not prop-erly expensed, while the errors also resulted in over valuation of work-in-progress and in unrecoverable debts. The financial controller of the division has left the business, it added.
Shares fell 11 per cent as investors digested the latest round of bad news from the company, following a profits warning in June. The group, which has been hurt by over-capacity and fierce competition, prints documents for about 30 per cent of the UK's FTSE 100 companies, as well as magazines including Investors Chronicle and House & Garden. St Ives said the errors mostly impacted on the first half of the financial year, covering the period to the end of January.
In half-year results published in April, St Ives said revenues for the point-of-sale division grew significantly, partly as a result of winning a contract to supply Marks & Spencer with all of its point-of-sale requirements last year.
There had also been increased levels of business undertaken for existing customers. St Ives achieved substantial scale in point-of-sale work following the 2004 acquisition of SP Group, which was formed in 1999 out of five family-owned print related business in the Birmingham area. The M&S contract involved taking on a printing plant owned by the retailer at Burnley, to add to SP's facilities at Redditch and Birmingham.
The problems, which came to light at a year-end review, will wipe £2.8 million from market forecasts for the year to July 28, which stood at £24.5 million prior to the announcement. The company will post results on October 10.
St Ives is the latest business to disclose accounting problems, amid ongoing investigations at software supplier iSoft and services group Interserve.
The company owns Clay Books, Suffolk, which has an estimated 25 per cent share of the UK trade and general book market and has printed bestsellers including Harry Potter and the Half-Blood Prince.
Shares closed down 21p at 191p.