IG Design Group PLC Trading Update (3204K)
August 28 2019 - 1:00AM
UK Regulatory
TIDMIGR
RNS Number : 3204K
IG Design Group PLC
28 August 2019
28 August 2019
IG Design Group PLC
(the "Company", the "Group" or "Design Group")
Trading Update
IG Design Group plc, one of the world's leading designers,
innovators and manufacturers of Gift Packaging, Celebrations,
Stationery and Creative Play products, Giftware and related product
categories, is pleased to announce positive trading to date in FY20
with revenue and profit showing strong year on year growth
reflecting a mix of organic progress and the full year effect of
the Impact Innovations Inc. ('Impact') acquisition, which was
completed in August 2018.
The Company's order book and production volumes are both ahead
of this time last year and in line with Directors' expectations.
The Group also continues to expect average leverage(1) for FY20 to
continue to reduce to circa.1.1 times Adjusted EBITDA(2) (FY19 -
1.3 times).
In the US, the integration of Impact continues on plan with the
restructuring of the manufacturing operations into Memphis now
fully supporting the production and conversion activities of the
combined US business. This will be further enhanced by the
introduction of a new ultra-high speed printing press on site in
November 2019. The press is expected to be fully commissioned in
time for manufacturing in FY21, in line with the Group's strategy
to enhance domestic US production capacity and capability.
The Company continues to focus on cross selling and product
development activities, with positive outcomes including the
success of combined teams within the US recently reaching agreement
with one of the US's largest retailers for the supply of all year
round themed and seasonal 'Impulse' gifting products, to over 1500
stores nationwide. This new agreement is expected to generate
significant incremental revenues in FY21 and beyond. Further growth
opportunities within the Food and Drug retail channel have also
been secured, reflecting focus on great value 'Impulse' gifting
products.
In the UK, the Company has secured a number of new character
licenses across the Gift Packaging categories which represent
excellent additions to the broad existing portfolio. The Directors
are also greatly encouraged with the enthusiastic response to FY20
key licensed product launches, including Frozen 2 and Toy Story
4.
The Group remains focused on its overall environmental
responsibility commitment and developing its holistic approach to
sustainability. The Directors were therefore pleased that the UK
business recently received the accreditation of the 3 Trees score
by the World Wildlife Fund, as a result of the its use of paper
only from sustainable forestry and from sustainable suppliers.
The Company continues to make selective investments which
satisfy its fast payback criteria. Recent projects include:-
-- A second paper bag manufacturing production line to go 'live'
in the UK during the second half of FY20. The expansion of the
production line recognises the success of the initial investment
and the order book in this category. Such is the progress with
this initiative that further investment is now being evaluated.
-- Investment in automating gift wrap manufacturing facilities in
Europe to deliver significantly enhanced converting capability
in time for FY21.
Opportunities to leverage scale and Group-wide expertise across
the supply base has been further enhanced through investment in
both people and technology. This is particularly important when
addressing changing local, regional and international trading
conditions.
Paul Fineman, Chief Executive said:
"Our strong performance to date illustrates our ability to drive
organic growth whilst also integrating a large acquisition and
delivering the associated operational and financial benefits. The
momentum throughout the business continues apace alongside good
forward visibility of our order book going into the remainder of
the year.
"The investments made in the Group are continuing to deliver and
this, alongside the benefits of the Group's scale and ability to
cross sell, stand the Group in good stead to continue to deliver
growth in the coming period and beyond."
1 - Average Leverage is calculated as the 12-month average debt
dividend by Adjusted EBITDA
2 - Adjusted EBITDA for the purpose of the average leverage
calculation is based on a pre-IFRS 16 basis
For further information:
IG Design Group plc 01525 887310
Paul Fineman, Chief Executive
Giles Willits, Chief Financial
Officer
Canaccord Genuity Limited 020 7523 8000
Bobbie Hilliam - NOMAD
Alex Aylen - Sales
Alma PR
Rebecca Sanders-Hewett 020 3405 0205
Susie Hudson designgroup@almapr.co.uk
Sam Modlin
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END
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