Packaging business Encore Envelopes impacted by drop in mailings

A decline in UK mailings has led to a drop in sales and profits at Encore Envelopes.

Russell Croisdale managing director of Encore Envelopes
Russell Croisdale managing director of Encore Envelopes

A nationwide decline in mailings knocked sales at a North East packaging firm by 10.5% in the year to November 2013.

Washington-based Encore Envelopes is the largest privately-owned printed envelope manufacturer in the UK and, together with its sister company Encore Packaging Solutions, produces nearly four billion of the 15 billion envelopes and packages delivered by Royal Mail every year.

The firm Encore produces envelopes and packaging for businesses including print management companies, automotive companies and retail giants such as Tesco, and has won a number of global awards for its print processing.

However, a drop in the amount of post being sent around the UK has led to a £3.2m drop in sales from the £30.48m post in the year to November 2012, bringing sales to £27.26m.

Operating profit was also heavily impacted, dropping by 24.9% to £1.3m from the previous period’s £1.73m, while pre-tax profits topped £1.23m, down from £1.65m and a drop of 25.4%.

Managing director Russell Croisdale said the dip in sales reflected an overall decline in mailings in the UK and a consequential pressure on pricing through over capacity for the production of printed envelopes.

Despite the drop, he said production levels are higher than market averages, showing the business has grown its market share.

He said: “Our fall in turnover has been as a consequence of cheaper prices in the market.

“However, production is down just 3.7%, much less than the 6% contraction in the size of the market, demonstrating that market share has actually increased once again.

“Our 25% fall in profitability was partly due to maintaining our valuable workforce in anticipation of acquisition and growth.”

The privately-owned company, now in its 30th year, has undergone a period of inward investment including the acquisition of the UK division of Spanish competitor Tompla Envelopes earlier this year, which saw all production move from Europe to the North East.

The deal made Encore the largest producer of envelopes in the UK while also securing the future of its 230 strong Washington workforce.

Encore packaging business, Encore Packaging Solutions, has allowed the firm to further expand into the postal delivery product sector and both divisions are soon to announce further investments.

Croisdale added: “The strength of our business is built on the knowledge and expertise of our workforce and our expansion has enabled us to secure jobs in the North East.

“Many of our team have been with Encore for over 20 years, and we’re working hard and investing in our business to ensure we can celebrate with them again in a further 20 years.”

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer