IG Design Group plc. (“Design Group”) has issued its trading update
for Q3 and the crucial Christmas period. Trading has been strong with
margin improvement across all geographies. Previously announced
initiatives are all progressing as expected and the Group is confident
that it will exceed market expectations for FY18 and continue to
mitigate against any cost head-winds. Additionally, proposed tax
changes in the US should result in an uplift to EPS forecasts from
2019, although this is not included in our forecast. We raise our EPS
forecast to 21.5p (up 7%) for FY18 and to 23.6p (up 4.5%) for FY19.
IG Design Group has upgraded its guidance following strong trading up to and throughout the Christmas period.
The group said it expects to deliver record revenues in FY18 with the continued expansion of its global footprint outside the UK.
It said: 'All regions are on track to achieve year on year revenue and profit growth and we are therefore pleased to upgrade the group's full year performance with diluted earnings per share expected to be ahead of current market expectations and delivering strong year-on-year growth.
IG Design Group has completed the acquisition of the trade and certain assets of Biscay Greetings, a leading greetings card and paper products business based in Australia, as previously announced on 21 Sep. The acquisition, made through Design Group's Australian joint venture Artwrap, was satisfied by a cash consideration of A$8.9m using local debt facilities.
The consideration represents 2.7x EBITDA for the year ended 30 Jun 2017 although an injection of working capital of up to A$3m will also be required.
IG Design Group plc. (“Design Group”), is an industry leading, global
retail supplier. It operates in four main categories: Celebrations,
which includes gift wrap, cards, crackers and bags; Stationery and
Creative Play, Gifting and Not-For-Sale Consumables. It is
differentiated by its concept of end-to-end design which takes a
whole-process engineering approach from building customer
relationships, through sourcing and manufacturing to delivery. It pays
meticulous attention to customer requirements, making considered
investment in manufacturing capacity, sourcing expertise and
achieving incremental cost reduction gains which protect margins in
the face of cost pressures. It is focused and entrepreneurial in its
search for new revenue streams in adjacent product categories.
Strong first half-performance sees management confident of meeting
or exceeding full-year expectations.