TIDMIGR
RNS Number : 4023C
IG Design Group PLC
19 October 2020
19 October 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 period ended 30 September
2020.
Trading update
The Group's trading for the six month period to 30 September
2020 is expected to deliver a 40% year on year increase in reported
revenue to approximately $435 million(1) (including $149 million
from CSS Industries Inc. ('CSS')), with better than expected
performances across both of our divisions; Americas (DG Americas
and CSS) and International (previously UK, Europe and Australia)(2)
. Group revenues, excluding CSS, were 8.3% down year on year
reflecting the impact of Covid-19, particularly in the first
quarter, with the second quarter showing a strong recovery. CSS
revenues in the first half were marginally down year on year as a
result of the impact of Covid-19 in the first quarter, however,
second quarter sales ended up on the same period in the prior
year.
The focus on cost management across the Group, including the
realisation of initial synergies from the CSS acquisition,
alongside the inclusion of CSS results for the first time in the 6
month period to 30 September 2020, is expected to deliver an
increase in Group Adjusted profit before tax compared to the same
period in the prior year with both segments of the Group; Americas
and International showing year on year growth.
At 30 September 2020 the Group delivered a significant year on
year reduction in net debt to $23.2 million compared to $106.1
million in the prior year. This very strong performance reflects
effective cash management across the Group during the first half of
the year with the team remaining focused on all aspects of working
capital including inventory which was lower than last year
(proforma), and reduced receivable balances reflecting the focus on
managing credit risk and collections. The Group expects to report
average leverage for the full year FY 2021 below 0.8x Adjusted
EBITDA. The Company's banking facilities remain in excess of $275
million with the Group's annual debt peak forecast to be
substantially below this level.
Operational update
Despite the various restrictions which continue to be in place
around the world as a result of Covid-19, our regional businesses
continue to operate and serve our customers around the world.
During this key peak trading period all our manufacturing and
distribution facilities continue to service customer requirements
on schedule with fulfilment and Christmas order deliveries fully on
track, while our office-based teams continue to work from home, as
required. The Directors remain confident that the Group is well
positioned to continue to meet increased customer demand.
Customer orders are now in excess of 80% of the full year
revenue forecasts for the year with strong ongoing momentum in
Everyday business particularly in the Americas.
Integration of CSS
The integration of CSS continues to deliver synergy savings
ahead of schedule and with the US business now fully integrated in
terms of the commercial, operational and back office teams there is
a clear programme of priorities focused on delivering further sales
opportunities and cost savings ahead of original estimates.
Looking ahead to the second half of FY2021
The Group continues to review the development of Covid-19 and,
whilst ensuring the safety of its teams and customers, will take
all necessary actions to maximise trading opportunities in the
second half, working with all our customers to ensure strong
service delivery throughout the critical Christmas period. The
Board note that performance in the first half of the financial year
is ahead of management expectations but it remains cautious in
relation to the full year outlook, particularly in the context of
Covid-19. A further update will be provided at the interim results
announcement. The Company expects to report its interim results at
the end of November and will announce its interim reporting date in
due course.
(1) As previously advised, following the acquisition of CSS the
Group has changed its reporting currency to US dollars
(2) The Group will be reporting its divisions as Americas (DG
Americas and CSS) and International (previously UK, Europe and
Australia) going forward.
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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