TIDMIGR
RNS Number : 4008L
IG Design Group PLC
30 April 2020
30 April 2020
IG Design Group plc
("Design Group", the "Company" or the "Group")
Post Close Trading Update
IG Design Group plc, one of the world's leading designers,
innovators and manufacturers of celebrations, craft, gifting,
stationery and creative play products, today issues a post close
trading update for the financial year ended 31 March 2020.
Post close trading update
The Group finished the financial year with revenues
approximately 10% up year on year, including four weeks of trading
from CSS Industries Inc. ('CSS'), following the completion of the
acquisition on 3 March 2020. The Directors believe the revenues of
the Group for the financial year ended 30 March 2020 were impacted
by at least GBP7 million as a result of COVID-19.
As at 31 March 2020 the Group had net cash of GBP42 million
supported by effective cash management during March and good cash
generation from CSS since acquisition. The Group expects to report
average leverage for FY 2020 below 1x Adjusted EBITDA. The
Company's banking facilities remain in excess of GBP220
million.
The Group expects to report a significant increase in
exceptional costs in the year ended 31 March 2020. This is as a
result of the impact of COVID-19 (primarily in relation to year-end
inventory and account receivable provisions), alongside the CSS
acquisition related costs, and the previously announced
integration, restructuring and related costs in our US businesses,
following the acquisition of Impact in 2018.
The Company is continuing to review its final dividend payment
for the financial year ended March 2020 and will provide further
clarification at its full year results. The Directors are committed
to the payment of dividends, however, believe that the maintenance
of a strong balance sheet during this period of instability is of
the upmost importance.
Operational update
Despite the various restrictions in place around the world, our
businesses continue to operate with stringent employee safety
protocols within each location, albeit at a reduced capacity. Our
regional distribution facilities continue to take and fulfil
customer orders and our manufacturing sites in the US, UK, China
and Europe have now recommenced production, after a short
suspension in order to implement appropriate health and safety
protocols. Our office-based teams are continuing to work from home
where possible. The Directors are confident that the Group is well
positioned to continue to meet customer demand as it increases,
once restrictions globally begin to ease.
Integration of CSS
The integration of CSS continues, with the programme for synergy
realisation running ahead of schedule, delivering run rate cost
savings above original estimates.
Looking ahead to FY2021 and beyond
Looking ahead, the Group has prepared detailed operational plans
by region that aim to ensure that it emerges from the Coronavirus
crisis strong and positioned to return to pursuing growth
opportunities. In developing these plans each business unit has
taken a view on a range of outcomes for FY2021 based on the impact
of Coronavirus in each region. The Company continues to work with
customers to understand their expectations, importantly including
confirming orders where possible for the crucial Christmas trading
period.
Assessing the range of outcomes above, the Directors believe
that although revenues will remain ahead of FY2020 as a result of
the full year effect of the CSS acquisition, there will be a
material reduction in expected Group revenue for FY2021. The Group
continues to forecast operating within its current banking
facilities. Assuming a return to more normal sales volumes by the
end of the FY2021, the Board would expect significant year on year
growth in both revenues and earnings in FY2022.
The Company notes the recent comments published by the FCA and
FRC regarding full year reporting. The Company expects to announce
the date for the release of its financial results for the year
ended 31 March 2020 in due course.
For further information, please contact:
IG Design Group plc Tel: 0152 588
7310
Paul Fineman, Chief Executive Officer
Giles Willits, Chief Financial Officer
Canaccord Genuity Limited (Nominated Adviser Tel: 0207 523
and Broker) 8000
Bobbie Hilliam, NOMAD
Alex Aylen, Sales
Alma PR Tel: 0203 405
0205
Rebecca Sanders-Hewett
Susie Hudson
Sam Modlin
About IG Design Group plc
IG Design Group plc, the largest consumer gift packaging
business in the world, is a designer, innovator and manufacturer of
products that help people celebrate life's special occasions.
Design Group works with more than 11,000 customers in over 80
countries throughout the UK, Europe, Australia and the USA.
Its products are found in over 210,000 retail outlets, including
several of the world's biggest retailers, for example Walmart,
Target, Amazon, Costco, Lidl and Aldi. Its brand, Tom Smith, also
holds the Royal Warrant for the supply of Christmas crackers and
Christmas wrapping paper to the Royal family. Design Group is a
diverse business operating across multiple regions, categories,
seasons and brands.
Its five major product categories are: Celebrations, Craft,
Stationery and Creative Play, Gifting, and Not-for-resale
consumables. It offers customers a full end-to-end service from
design through to distribution, offering both branded and bespoke
products from the value-focused through to the higher-margin ends
of the market.
The Company was admitted to the Alternative Investment Market of
the London Stock Exchange in 1995 under the name 'International
Greetings plc' and rebranded to IG Design Group plc in 2016. For
further information please visit www.thedesigngroup.com.
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END
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