IG Design Group PLC Post Close Trading Update (8261W)
20 Abril 2023 - 1:00AM
UK Regulatory
TIDMIGR
RNS Number : 8261W
IG Design Group PLC
20 April 2023
20 April 2023
IG Design Group Plc
('Design Group' or the 'Group')
Post Close Trading Update
IG Design Group plc, one of the world's leading designers,
innovators and manufacturers of Gift Packaging, Celebrations, Craft
& Creative Play, Stationery, Gifting and related product
categories, provides an update on its financial performance for the
year ended 31 March 2023, which is ahead of expectation.
The Group expects to deliver revenue for the year of
approximately $890 million, down 4% year-on-year at constant
currency (c. 8% on a reported basis). At constant currency, the
Group's smaller International division grew approximately 10%, with
increased revenue across all businesses, with particular strength
seen in continental Europe. The Group's larger Americas division
experienced a drop of approximately 10%, resulting from a
combination of the strategic decision to exit loss-making business,
and lower volume across a number of categories, especially in the
second half of the financial year. All businesses, save for those
operating in continental Europe experienced year-on-year sales
decline in the second-half of the year. This reflected the
challenging macroeconomic and consumer environment post-Christmas
2022, particularly so in the United Kingdom.
Group operating margins are expected to be approximately 1.8%, a
recovery of some 140 basis points on the previous year. This better
than expected margin performance is expected to deliver a Group
adjusted profit before tax of some $9m, which is ahead of
previously communicated market expectations, reflecting continuing
stronger than anticipated trading performance in continental
Europe, as well as benefits from the turnaround initiatives
initiated in the Americas division exceeding earlier
expectations.
Due to the recently deteriorated trading, and very limited
pricing expectations for Christmas 2023 in the United Kingdom, the
Group is likely to incur a one-off, non-cash write-down to the
historic goodwill value associated with certain businesses in that
market. The Directors expect this to significantly impact the
reported results for the year.
Financial position
The Group closed the year with a net cash balance of some $50
million, a significant year-on-year increase, reflecting stronger
working capital management despite inflationary impacts.
The Group is at an advanced stage with its re-financing, with
new facilities that should run to spring-2026. It is expected that
this will be completed in the near term.
Board appointments
Following the recent appointment of Paul Bal as Group CEO, the
search for a new Group CFO is well advanced. It is expected that
this will be completed shortly.
Outlook
The financial performance as set out above is consistent with
management's aspiration to restore pre-Covid operating profit
margins by the end of FY25. This year's delivery is ahead of the
Board's expectations, and reflects significant efforts in the
Americas division to restore profitability, and to grow revenue and
extend margins elsewhere.
The Board expects FY24 to present demand and pricing challenges
given widespread consumer caution. Nevertheless, it expects to make
progress towards its FY25 aspiration. With margin recovery
underway, management is developing a growth-focused strategy that
will also better leverage the Group's scale and capabilities to
further underpin delivery.
The Group intends to announce its full year results on 20 June
2023.
Stewart Gilliland, Chair, commented:
"On behalf of the Board, I would like to thank all of our
colleagues across the Group for their dedication and strong efforts
to restore the Group to profitability, especially so in the
Americas.
There is no doubt that the continuing uncertainty in the global
retail consumer goods sector provides a challenge. However, the
initiatives already underway in the Americas, coupled with the
recent strategy work across all regions will position the Group
well to navigate these challenges and emerge stronger once the
external environment becomes less challenging."
For further information, please contact:
IG Design Group Plc Tel: +44 (0)1525 887310
Stewart Gilliland, Chair
Paul Bal, CEO & CFO
Canaccord Genuity Limited (Nomad Tel: +44 (0)20 7523
and Broker) 8000
Bobbie Hilliam
Alma PR Tel: +44 (0)20 3405
Sam Modlin 0209
Josh Royston designgroup@almapr.co.uk
Pippa Crabtree
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END
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April 20, 2023 02:00 ET (06:00 GMT)
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