We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
IG Design Group Plc | AQSE:IGR.GB | Aquis Stock Exchange | Ordinary Share | GB0004526900 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-2.00 | -1.25% | 158.00 | 153.00 | 163.00 | 160.00 | 158.00 | 160.00 | 0.00 | 14:57:28 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMIGR
RNS Number : 3573Q
IG Design Group PLC
29 November 2016
29 November 2016
IG Design Group PLC
(the "Company", the "Group" or "Design Group")
Interim Results
IG Design Group plc, one of the world's leading designers, innovators and manufacturers of gift packaging, greetings, stationery, creative play products and giftware, announces its Interim Results for the six months ended 30 September, 2016.
Financial Highlights
-- Sales up 21.5% to GBP145.5m at the half year from GBP119.8m
Ø 5.6% organic growth, 7.1% Lang and 8.8% FX translation
-- Gross margin up 40.8% to GBP30.8m from GBP21.9m
Ø 14.9% organic growth, 13.8% Lang and 12.1% FX translation
-- Operating profit before exceptional items and LTIP charges up 42.6% to GBP9.3m from GBP6.5m
Ø 13.5% organic growth, 10.9% Lang, 18.2% FX translation
-- PBT up 57.5% before exceptional items and LTIP charges to GBP8.2m from GBP5.2m
Ø 25.2% organic growth, 13.7% Lang, 18.6% FX translation
-- Underlying Earnings Per Share up 50.0% to 9.6p from 6.4p
Ø 20.0% organic, 10.0% Lang, 20.0% FX translation
-- Net Debt is GBP1.7m lower than in the prior year at GBP76.4m -- Interim Dividend declared of 1.75p
-- Financial performance ahead of expectations, providing confidence for upgrading of annual dividend guidance
Operational Highlights
Group
-- Successful re-branding to IG Design Group plc providing greater clarity to our customers, suppliers and employees.
-- Considerable returns obtained from the successful implementation of efficiency projects worldwide.
UK
-- Sales 4% lower at GBP55.1m due to scheduling of certain customer deliveries into the second half of the year.
-- Profit increased 4.0% despite FX transaction impact following recent political and economic events.
-- Our manufacturing facility in China has provided increased volumes of other products to our UK businesses with record levels of bags and cards being produced.
Continental Europe
-- Sales in local currency up 11% to EUR19.8m with growth in profit of 25%. -- Strong order book in place for the balance of the financial year.
Australia (JV)
-- Sales in local currency 6% lower driven by timing while profit has advanced 54% against prior year.
USA
-- Trading performance has been particularly strong with organic sales in local currency up by 21% to $66.6m and profit even stronger up 36%.
-- Initial integration of Lang Companies completed successfully, adding to profitability and now expected to be marginally earnings enhancing in the current year as well as more materially accretive in FY18.
-- Further opportunities for commercial, operational and purchasing synergies to deliver enhanced profitability.
Outlook
The Board is confident that the current rate of sales and gross margin will continue into the second half of the year, resulting in the annual financial performance of the Group now expected to be above current market forecasts. While the timing of overheads and the acquisition of Lang part way through the year (and so excluding loss making months) has slightly flattered H1 results at the levels of operating profit and below, we are also confident that the full year outlook for profit and our key underlying earnings per share metric will continue to outperform.
Paul Fineman, Chief Executive said:
"We are delighted to be reporting such strong performance during the first half of the year, with all regions trading profitably and continuing to grow, both organically and through acquisition.
"We are continuing to drive growth from very solid foundations and still identifying further investment opportunities with fast payback to continuously improve efficiencies and enhance capabilities across all territories.
"With a substantial order book in place for the remainder of the year, we are on course to deliver a full year financial performance ahead of market expectations. Further we are sufficiently confident with the prospects for profits growth and cash generation to increase the total dividend expectation for the full year to 4p. The Group remains committed to creating sustainable value for our shareholders through both organic growth and, when the opportunity arises, through carefully considered acquisitions."
-S -
This announcement contains inside information.
IG Design Group PLC Tel: 01525 887310
Paul Fineman, Chief Executive
Anthony Lawrinson, Chief Financial Officer
Cenkos Securities Tel: 020 7397 8900
Bobbie Hilliam
Harry Pardoe
Redleaf Communications Tel: 0207 382 4730 Rebecca Sanders-Hewett designgroup@redleafpr.com
Sarah Fabietti-Dallison
Susie Hudson
Executive summary
Overview
We are delighted with our performance during the first six months of the current trading year, which has seen growth both organically and through acquisition. Overall sales and profit before tax, exceptional items and LTIP charges are up 21.5% and 57% respectively. Adjusted fully diluted earnings per share is up 50% whilst net debt is lower than at the prior period despite funding the seasonal working capital at the newly acquired Lang business.
Performance by region
We are pleased to report that all regions have again traded profitably during the period.
Americas - our trading performance has been particularly strong with organic sales and operating profit growth of 21% and 36% respectively. There has been sales growth across all channels and product categories. We have begun to deliver fast payback from the investment programme in our US wrap manufacturing facilities and have identified further opportunities both within the US and through leveraging our capability across our Group to accelerate growth across the Americas.
We are pleased with the smooth integration of the recently acquired Lang Group of Companies and are optimistic with prospects for commercial, operational and purchasing synergies to deliver enhanced profitability.
Europe - with sales growth of 11% and profits growth of 25%, our progress across Continental Europe has been most encouraging and we are pleased to report a strong order book in place for the balance of the trading year.
Australia - the timing of some customer delivery requirements has impacted on sales revenues during the first half of the year, however, whilst sales in local currency are 6% lower, profit is 54% ahead of the prior year with product mix and operational efficiency contributing to this pleasing outcome.
UK - scheduling of certain customer deliveries into the second half of the year has resulted in sales being 3.6% lower, although profits are modestly ahead of the prior year. Once again, our manufacturing facility in China has provided increased volumes of products to our UK businesses with record levels of bags and cards being produced.
Central costs - reflect some losses on foreign exchange translation at the half year which will largely reverse in the second half.
Financial review
Reported sales are up 21.5% to GBP145.5 million on the prior period (2015 H1: GBP119.8 million) despite minor timing differences in the UK and Australian markets. Organic growth represents 5.5% of this growth with foreign exchange translation effects accounting for 8.8% and our acquisition of Lang a further 7.1%. Overall phasing of delivery to customers is expected to be split equally between the two halves of the year.
Gross profit margins at 21.2% (2015 H1: 18.2%) were higher than the prior year, assisted by Lang which benefits from higher gross margins, albeit with a higher cost delivery model reflected in overheads. Organic progression on margins is also positive, benefiting from efficiencies and favourable mix.
Overhead costs are higher at GBP22.5 million (2015 H1: GBP16.0 million). This is largely driven by a) the impact of Lang (GBP2.3 million); b) the effect of overseas costs translated at current exchange rates; c) a higher LTIP charge of GBP0.9 million (2015 H1: GBP0.3 million) arising as the likelihood of vesting of share incentive plans to management increases; and d) our recent investments in people, rebranding and growth opportunities.
The LTIP charge is a largely non-cash accounting charge and we exclude the effect of this when measuring underlying trends in profitability. As a percentage of sales, and after removing the effect of the LTIP charge, overhead costs rose from 13.1% to 14.9% or 14.0% after excluding Lang from the current period.
Operating profit before exceptional costs and LTIP charges again improved strongly by 43% to GBP9.3 million (2015 H1: GBP6.5 million) while profit before tax, exceptional items and LTIP charges was up 57% to GBP8.2 million from GBP5.2 million in the equivalent period last year. These increases partly reflect advantageous phasing associated with the acquisition of Lang only part way through the period (and thus excluding early seasonal loss making months) and overheads which will be higher in the second half, but the Group's performance to date and outlook for the full year is nonetheless well ahead of management's previous expectations.
The exceptional credit during the period of GBP0.6 million (2015 H1: nil) comprises a cash charge of GBP0.5 million and a non-cash credit of GBP1.1 million both associated with the acquisition of Lang. The cash items reflect acquisition costs and restructuring. As previously indicated these costs may eventually reach circa $1.5 million (GBP1.2 million at current exchange rates). The non-cash credit is an estimated amount and reflects the 'gain on bargain purchase' on acquisition of the Lang business for an attractive price paid relative to the assets acquired. It is anticipated that this non-cash credit may be wholly or partly offset later in the year by other non-cash charges associated with further reinvestment in our global printing platform.
After allowing for such costs and credits in the period, profit before tax and after exceptional items and LTIP charges was GBP7.9 million, up 61% on the prior year (2015 H1: GBP4.9 million).
Finance expenses in the period were again substantially lower on the prior year period at GBP1.0 million (2015 H1: GBP1.3 million) reflecting the continued effect of improved borrowing costs, efficient use of lower cost asset based lending working capital facilities and lower average indebtedness. We refinanced our global facilities in June 2016 in every territory apart from Australia (which is a joint venture) with HSBC, achieving more attractive terms and conditions as a result and extending the maturity of our main facilities to at least June 2019. Costs of GBP0.5 million were incurred in respect of this, with payback expected to be achieved within the year.
The effective underlying tax rate (before exceptional items) was 24% (2015 H1: 23%), well below the blended prevailing rate which based upon the current mix of Group profits would be closer to 28%. The difference arises because of our ongoing ability to recognise further historical tax losses in the USA as profitable growth continues. We anticipate by the year end that all US losses will have been recognised with just GBP0.4 million of tax loss effect unrecognised in the UK. This means that the effective tax rate will rise quickly in future periods especially if growth is heavily fuelled by our US business as is our expectation. Cash tax is increasingly payable in most of our geographic regions of operation as historical losses are fully utilised.
Stated before exceptional items and LTIP charges, basic earnings per share were ahead of expectations and much improved at 9.8p (2015 H1: 6.5p). The equivalent statutory outcome was 9.7p (2015 H1: 6.2p) after exceptional items and LTIP charges. Our primary measure of performance is adjusted fully diluted earnings per share (stated before exceptional items and LTIP charges) and this was up 50% to 9.6p (2015 H1: 6.4p). The half year EPS outcome benefits from the timing of profitability for reasons explained above.
The Group issued three million new shares during the period for aggregate net proceeds of GBP5.0 million to fund the acquisition of Lang and associated working capital. The timing of this event further flatters EPS because the dilution effect of the new shares issued is only included for a part of the period, and will be included for the whole of the second half. Nonetheless, the growth in EPS was well ahead of management and market expectations, providing us with the confidence to upgrade our outlook for the full year against previous market expectations.
Capital expenditure in the six months was GBP3.0 million (2015 H1: GBP1.7 million), somewhat higher than the prior period as we seek out opportunities to invest in efficiency. A third of the expenditure was in our joint venture Artwrap where we invested in updating the warehouse management system to drive operational efficiencies and to support a new longer term customer contract.
As previously announced, we acquired the Lang Group of Companies in Wisconsin, USA in June 2016. While the purchase price was four times underlying EBITDA, the price paid was $3.4 million (GBP2.7 million) after an adjustment in respect of working capital. Since the assets acquired were greater than this, an estimated exceptional non-cash credit to the profit and loss account of GBP1.1 million has been reflected at the 30 September 2016, although this may be revised before the year end, as it is based upon estimates. Exceptional cash costs of the acquisition and associated restructuring were GBP0.5 million at the period end and are explained more fully above.
Cash used by operations was GBP54.2 million (2015 H1: GBP44.6 million) reflecting the growing scale of the business and the seasonal funding of the newly acquired Lang business. The underlying cash dynamics reflect the usual and highly variable phasing of deliveries to customer requirements from year to year.
Cash flows associated with interest, tax and dividends in aggregate were up from GBP2.6 million in 2015 H1 to GBP2.9 million, though dividend payments (including a modest amount to our joint venture partner) have doubled while tax and interest payments have declined.
Pleasingly, net debt at 30 September 2016 was lower than the prior year at GBP76.4 million (2015 H1: GBP78.0 million). This benefits from strong underlying trading cash flows, tight control of working capital and of course the equity issue in the period but is also despite funding substantial capital expenditure and the acquisition and peak seasonal requirements of Lang, both of which will yield future improvements in our cash flows.
Furthermore, while recent exchange rate movements have assisted profits growth - the translation effect has been explained fully above - they have also accounted for an additional GBP7.0 million on the reported debt balance at the half year. This is optical only since currency cash flows will largely repay the currency debt before the year end, at which point the retranslation effect is expected to be small. Our focus on reduction of average leverage has not wavered and we continue to target average debt to EBITDA of less than 2.5 times.
Dividend
A final dividend for the year ended 31 March 2016 of 1.5p per share was paid in September 2016 making the total for the year 2.25p. The Board is pleased to declare an interim dividend of 1.75p per share in respect of H1 2016/17 (2015 H1: 0.75p) in line with our intention to steadily increase total dividends whilst still preserving sufficient cash to reduce leverage and fund growth. This will be paid on Tuesday 17 January 2017 to shareholders on the register on Friday 9 December 2016.
Current trading outlook
With a strong order book in place for the balance of FY 2016/17 we are on course to deliver financial results materially ahead of market expectations for the full year. Current momentum in sales and gross margin is expected to be maintained into the second half of the year. While the timing of overheads and the acquisition of the Lang Group of Companies part way through the year (therefore excluding early periods which are seasonally loss making) has slightly flattered the first half year's results at the levels of operating profit and below, profits and our key metric of earnings per share are also expected to be stronger.
Our businesses continue to effectively convert profit into cash and our healthy balance across all aspects of our activities, by region, season, brand and product category have provided good insulation against recent macroeconomic and political events. Investment opportunities with fast payback continue to be identified across all territories, allowing us to continuously improve efficiencies, enhance our capabilities and expand into adjacent product and market areas.
With the positive outlook, underpinned by the Group's profits growth and cash generation, this has allowed us to increase dividend expectations for the total year to 4p including the 1.75p above in respect of the half year period.
We remain well placed to deliver ever-improving shareholder returns through both organic growth and, when the opportunity arises, through carefully considered acquisitions.
Paul Fineman Anthony Lawrinson Chief Executive Officer Chief Financial Officer 29 November 2016 29 November 2016
Consolidated income statement
six months ended 30 September 2016
Unaudited six months 12 months Unaudited six months ended ended ended 30 Sep 2016 ----------------------------------- Before Exceptional 30 Sep 31 Mar exceptional items 2015 2016 items (note 10) Total total total GBP000 GBP000 GBP000 GBP000 GBP000 ----------------------------- ----------- ----------- --------- ---------- --------- Revenue 145,525 - 145,525 119,818 236,950 Cost of sales (114,730) - (114,730) (97,952) (193,552) ----------------------------- ----------- ----------- --------- ---------- --------- Gross profit 30,795 - 30,795 21,866 43,398 21.2% 21.2% 18.2% 18.3% Selling expenses (8,317) - (8,317) (6,068) (12,609) Administration expenses (14,172) 563 (13,609) (9,944) (18,923) Other operating income 99 - 99 349 758 ----------------------------- ----------- ----------- --------- ---------- --------- Operating profit 8,405 563 8,968 6,203 12,624
Finance expenses (1,045) - (1,045) (1,276) (2,763) ----------------------------- ----------- ----------- --------- ---------- --------- Profit before tax 7,360 563 7,923 4,927 9,861 Income tax (charge)/credit (1,792) 26 (1,766) (1,133) (2,219) ----------------------------- ----------- ----------- --------- ---------- --------- Profit for the period 5,568 589 6,157 3,794 7,642 ----------------------------- ----------- ----------- --------- ---------- --------- Attributable to: Owners of the Parent Company 5,865 3,643 7,261 Non--controlling interests 292 151 381 ----------------------------- ----------- ----------- --------- ---------- ---------
Earnings per ordinary share
Unaudited six months Unaudited six months 12 months ended 30 Sep 2016 ended 30 Sep 2015 ended 31 Mar 2016 ---------------------- ---------------------- ------------------- Diluted Basic Diluted Basic Diluted Basic ----------------------------- ----------- --------- ----------- --------- ---------- ------- Adjusted earnings per share excluding exceptional items and LTIP charges 9.6p 9.8p 6.4p 6.5p 13.2p 13.5p Cost per share on LTIP charges (1.1p) (1.1p) (0.4p) (0.3p) (1.2p) (1.2p) ----------------------------- ----------- --------- ----------- --------- ---------- ------- Adjusted earnings per share excluding exceptional items 8.5p 8.7p 6.0p 6.2p 12.0p 12.3p Earnings per share on exceptional items 1.0p 1.0p - - - - ----------------------------- ----------- --------- ----------- --------- ---------- ------- Earnings per share 9.5p 9.7p 6.0p 6.2p 12.0p 12.3p ----------------------------- ----------- --------- ----------- --------- ---------- -------
Consolidated statement of comprehensive income
six months ended 30 September 2016
Unaudited Unaudited six months six months 12 months ended ended ended 30 Sep 30 Sep 31 Mar 2016 2015 2016 GBP000 GBP000 GBP000 ----------------------------------------------------------------------------------- ---------- ---------- --------- Profit for the period 6,157 3,794 7,642 Other comprehensive income: Exchange difference on translation of foreign operations (net of tax) 3,069 (687) 1,794 Transfer to profit and loss on maturing cash flow hedges (net of tax) 223 (572) (572) Net loss on cash flow hedges (net of tax) (580) (1) (223) Other comprehensive income for period, net of tax, items which may be reclassified to profit and loss in subsequent periods 2,712 (1,260) 999 Total comprehensive income for the period, net of tax 8,869 2,534 8,641 Attributable to: Owners of the Parent Company 8,107 2,541 8,191 Non--controlling interests 762 (7) 450 ----------------------------------------------------------------------------------- ---------- ---------- --------- 8,869 2,534 8,641 ----------------------------------------------------------------------------------- ---------- ---------- ---------
Consolidated statement of changes in equity
six months ended 30 September 2016
Share premium and capital Non-- ----------- Share redemption Merger Hedging Translation Retained Shareholder controlling ------- capital reserve reserves reserves reserve earnings equity interest Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 ------------------- ------- ---------- -------- -------- ----------- -------- ----------- ----------- ------- At 31 March 2016 2,963 4,852 17,164 (223) (100) 43,346 68,002 3,370 71,372 ------------------- ------- ---------- -------- -------- ----------- -------- ----------- ----------- ------- Profit for the period - - - - - 5,865 5,865 292 6,157 Other comprehensive income - - - (357) 2,599 - 2,242 470 2,712 ------------------- ------- ---------- -------- -------- ----------- -------- ----------- ----------- ------- Total comprehensive income for the period - - - (357) 2,599 5,865 8,107 762 8,869 Equity--settled share--based payment - - - - - 514 514 - 514 Tax on equity--settled share--based payment - - - - - 850 850 - 850 Shares issued 150 4,883 - - - - 5,033 - 5,033 Options exercised 19 34 - - - - 53 - 53 Equity dividends paid - - - - - (1,039) (1,039) (260) (1,299) ------------------- ------- ---------- -------- -------- ----------- -------- ----------- ----------- ------- At 30 September 2016 3,132 9,769 17,164 (580) 2,499 49,536 81,520 3,872 85,392 ------------------- ------- ---------- -------- -------- ----------- -------- ----------- ----------- -------
six months ended 30 September 2015
Share premium and capital Non-- ----------- Share redemption Merger Hedging Translation Retained Shareholder controlling ------- capital reserve reserves reserves reserve earnings equity interest Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 ----------------- ------- ---------- -------- -------- ----------- -------- ----------- ----------- ------- At 31 March 2015 2,910 4,801 17,164 572 (1,825) 36,042 59,664 2,920 62,584 ----------------- ------- ---------- -------- -------- ----------- -------- ----------- ----------- ------- Profit for the period - - - - - 3,643 3,643 151 3,794 Other comprehensive income - - - (573) (529) - (1,102) (158) (1,260) ----------------- ------- ---------- -------- -------- ----------- -------- ----------- ----------- ------- Total comprehensive income for the period - - - (573) (529) 3,643 2,541 (7) 2,534 Equity--settled share--based payment - - - - - 165 165 - 165 Options exercised 33 4 - - - (30) 7 - 7 Equity dividends paid - - - - - (588) (588) - (588) ----------------- ------- ---------- -------- -------- ----------- -------- ----------- ----------- --------- At 30 September 2015 2,943 4,805 17,164 (1) (2,354) 39,232 61,789 2,913 64,702 ----------------- ------- ---------- -------- -------- ----------- -------- ----------- ----------- ---------
year ended 31 March 2016
Share premium and capital Non-- ----------- Share redemption Merger Hedging Translation Retained Shareholder controlling ------- capital reserve reserves reserves reserve earnings equity interest Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 ------------------- ------- ---------- -------- -------- ----------- -------- ----------- ----------- ------- At 1 April 2015 2,910 4,801 17,164 572 (1,825) 36,042 59,664 2,920 62,584 ------------------- ------- ---------- -------- -------- ----------- -------- ----------- ----------- ------- Profit for the year - - - - - 7,261 7,261 381 7,642 Other comprehensive income - - - (795) 1,725 - 930 69 999 ------------------- ------- ---------- -------- -------- ----------- -------- ----------- ----------- ------- Total comprehensive income for the year - - - (795) 1,725 7,261 8,191 450 8,641 Equity--settled share--based payment - - - - - 596 596 - 596 Tax on equity--settled share--based payments - - - - - 509 509 - 509 Options exercised 53 51 - - - (30) 74 - 74 Equity dividends paid - - - - - (1,032) (1,032) - (1,032) ------------------- ------- ---------- -------- -------- ----------- -------- ----------- ----------- ------- At 31 March 2016 2,963 4,852 17,164 (223) (100) 43,346 68,002 3,370 71,372 ------------------- ------- ---------- -------- -------- ----------- -------- ----------- ----------- -------
Consolidated balance sheet
as at 30 September 2016
Unaudited Unaudited as at as at As at 30 Sep 30 Sep 31 March 2016 2015 2016 Note GBP000 GBP000 GBP000 -------------------------------------------- ---- --------- --------- -------- Non--current assets Property, plant and equipment 33,450 28,093 30,190 Intangible assets 33,733 31,634 32,236 Deferred tax assets 4,426 3,342 4,296 -------------------------------------------- ---- --------- --------- -------- Total non--current assets 71,609 63,069 66,722 -------------------------------------------- ---- --------- --------- -------- Current assets Inventory 74,355 66,129 46,006 Asset held for sale - land and buildings - 1,250 - Trade and other receivables 105,810 86,131 21,187 Derivative financial assets 86 166 218 Cash and cash equivalents 4 5,381 1,327 8,380 -------------------------------------------- ---- --------- --------- -------- Total current assets 185,632 155,003 75,791 -------------------------------------------- ---- --------- --------- -------- Total assets 257,241 218,072 142,513 -------------------------------------------- ---- --------- --------- -------- Equity Share capital 3,132 2,943 2,963 Share premium 8,429 3,465 3,512 Reserves 20,423 16,149 18,181 Retained earnings 49,536 39,232 43,346 -------------------------------------------- ---- --------- --------- -------- Equity attributable to owners of the Parent Company 81,520 61,789 68,002 -------------------------------------------- ---- --------- --------- -------- Non--controlling interests 3,872 2,913 3,370 -------------------------------------------- ---- --------- --------- -------- Total equity 85,392 64,702 71,372 -------------------------------------------- ---- --------- --------- -------- Non--current liabilities Loans and borrowings 4 (254) 20,395 18,349 Deferred income 1,133 1,013 1,145 Provisions 872 862 869 Other financial liabilities 2,242 3,133 2,095 Deferred tax liability 352 - 352 -------------------------------------------- ---- --------- --------- -------- Total non--current liabilities 4,345 25,403 22,810 -------------------------------------------- ---- --------- --------- -------- Current liabilities Bank overdraft 4 4,576 2,871 1,508 Loans and borrowings 4 75,250 52,370 3,584 Deferred income 150 626 118 Provisions 220 108 212 Income tax payable 2,809 1,706 1,945 Trade and other payables 64,975 55,287 27,221 Other financial liabilities 19,524 14,999 13,743 -------------------------------------------- ---- --------- --------- -------- Total current liabilities 167,504 127,967 48,331 -------------------------------------------- ---- --------- --------- -------- Total liabilities 171,849 153,370 71,141 -------------------------------------------- ---- --------- --------- -------- Total equity and liabilities 257,241 218,072 142,513 -------------------------------------------- ---- --------- --------- --------
Consolidated cash flow statement
six months ended 30 September 2016
Unaudited Unaudited six months six months 12 months ended ended ended 30 Sep 30 Sep 31 Mar 2016 2015 2016 GBP000 GBP000 GBP000 -------------------------------------------------------- ---------- ---------- --------- Cash flows from operating activities Profit for the year 6,157 3,794 7,642 Adjustments for: Depreciation 1,809 1,869 3,596 Amortisation of intangible assets 328 201 285 Finance expenses 1,045 1,276 2,763 Negative goodwill release to income (1,067) - - Income tax charge 1,766 1,133 2,219 Profit/(loss) on sales of property, plant and equipment 15 (62) (186) Profit on external sale of intangible fixed assets - - 1 Equity--settled share--based payment 870 300 908 -------------------------------------------------------- ---------- ---------- --------- Operating profit after adjustments for non--cash items 10,923 8,511 17,228 Change in trade and other receivables (78,676) (64,612) 1,041 Change in inventory (22,863) (20,698) 1,219 Change in trade and other payables 36,436 32,548 1,863 Change in provisions and deferred income (58) (305) (607) -------------------------------------------------------- ---------- ---------- --------- (Cash used by)/cash generated from operations (54,238) (44,556) 20,744 Tax paid (525) (838) (1,797) Interest and similar charges paid (1,060) (1,219) (1,961) -------------------------------------------------------- ---------- ---------- ---------
Net cash (outflow)/inflow from operating activities (55,823) (46,613) 16,986 -------------------------------------------------------- ---------- ---------- --------- Cash flow from investing activities Proceeds from sale of property, plant and equipment 48 104 1,568 Acquisition of subsidiary (2,669) - - Acquisition of intangible assets (77) (193) (382) Acquisition of property, plant and equipment (2,914) (1,539) (4,377) Receipt of government grants 39 - - -------------------------------------------------------- ---------- ---------- --------- Net cash outflow from investing activities (5,573) (1,628) (3,191) -------------------------------------------------------- ---------- ---------- --------- Cash flows from financing activities Proceeds from issue of share capital 5,086 7 74 Repayment of secured borrowings (21,774) (640) (5,708) Net movement in credit facilities 68,575 47,000 184 Payment of finance lease liabilities (229) (301) (1,712) Loan arrangement fees (287) - - Equity dividend paid (1,039) (588) (1,032) Dividends paid to non--controlling interests (260) - - -------------------------------------------------------- ---------- ---------- --------- Net cash inflow/(outflow) from financing activities 50,072 45,478 (8,194) -------------------------------------------------------- ---------- ---------- --------- Net (decrease)/increase in cash and cash equivalents (11,324) (2,763) 5,601 Cash and cash equivalents at beginning of period 6,872 1,278 1,278 Effect of exchange rate fluctuations on cash held 5,257 (59) (7) -------------------------------------------------------- ---------- ---------- --------- Cash and cash equivalents at end of the period 805 (1,544) 6,872 -------------------------------------------------------- ---------- ---------- ---------
Notes to the interim financial statements
1 Accounting policies
Basis of preparation
The financial information contained in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006 and is unaudited.
The Group interim report has been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRS"). The financial information for the year ended 31 March 2016 is extracted from the statutory accounts of the Group for that financial year and does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The auditor's report was (i) unqualified; (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report; and (iii) did not contain a statement under Section 498 (2) of the Companies Act 2006.
The interim report does not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements for the year ended 31 March 2016.
Going concern basis
The borrowing requirement of the Group increases steadily over the period from July and peaks in October, due to the seasonality of the business, as sales of wrap and crackers are mainly for the Christmas market, before then reducing.
As with any company placing reliance on external entities for financial support, the Directors acknowledge that there can be no certainty that this support will continue, although, at the date of approval of this interim report, they have no reason to believe that it will not do so.
After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the financial statements.
Significant accounting policies
The accounting policies adopted in the preparation of the interim report are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 March 2016.
2 Segmental information
The Group has one material business activity being the design, manufacture and distribution of gift packaging and greetings, stationery and creative play products, and design-led giftware.
For management purposes the Group is organised into four geographic business units.
The results below are allocated based on the region in which the businesses are located; this reflects the Group's management and internal reporting structure. The decision was made during 2011 to focus Asia as a service provider of manufacturing and procurement operations, whose main customers are our UK businesses. Both the China factory and the majority of the Hong Kong procurement operations are now overseen by our UK operational management team and we therefore continue to include Asia within the internal reporting of the UK operations, such that UK and Asia comprise an operating segment. The chief operating decision maker is the Board.
Intra--segment pricing is determined on an arm's length basis. Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Financial performance of each segment is measured on operating profit. Interest income or expense and tax are managed on a Group basis and not split between reportable segments.
Segment assets are all non--current and current assets, excluding deferred tax and income tax receivable. Where cash is shown in one segment, which nets under the Group's banking facilities, against overdrafts in other segments, the elimination is shown in the eliminations column. Similarly inter--segment receivables and payables are eliminated.
UK and Asia Europe USA Australia Eliminations Group GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 ------------------------------ ----------- --------- --------- --------- ------------ --------- Six months ended 30 September 2016 Revenue - external 55,117 16,545 58,560 15,303 - 145,525 - inter segment 1,448 224 - - (1,672) - ------------------------------ ----------- --------- --------- --------- ------------ --------- Total segment revenue 56,565 16,769 58,560 15,303 (1,672) 145,525 ------------------------------ ----------- --------- --------- --------- ------------ --------- Segment result before exceptional items 4,000 1,258 3,758 1,020 - 10,036 Exceptional items - - 563 - - 563 ------------------------------ ----------- --------- --------- --------- ------------ --------- Segment result 4,000 1,258 4,321 1,020 - 10,599 ------------------------------ ----------- --------- --------- --------- ------------ --------- Central administration costs (1,631) Net finance expenses (1,045) Income tax (1,766) ------------------------------ ----------- --------- --------- --------- ------------ --------- Profit for the six months ended 30 September 2016 6,157 ------------------------------ ----------- --------- --------- --------- ------------ --------- Balances at 30 September 2016 Segment assets 139,043 31,989 66,914 14,869 4,426 257,241 ------------------------------ ----------- --------- --------- --------- ------------ --------- Segment liabilities (78,480) (12,426) (69,222) (8,560) (3,161) (171,849) ------------------------------ ----------- --------- --------- --------- ------------ --------- Capital expenditure - property, plant and equipment 1,085 226 554 1,049 - 2,914 - intangible 26 - 49 2 - 77 Depreciation 885 349 424 151 - 1,809 Amortisation 131 21 165 11 - 328 ------------------------------ ----------- --------- --------- --------- ------------ --------- UK and Asia Europe USA Australia Eliminations Group GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 ------------------------------ ----------- --------- -------- --------- ------------ --------- Six months ended 30 September 2015 Revenue - external 57,151 12,901 35,803 13,963 - 119,818 - inter segment 1,381 - - - (1,381) - ------------------------------ ----------- --------- -------- --------- ------------ ---------
Total segment revenue 58,532 12,901 35,803 13,963 (1,381) 119,818 ------------------------------ ----------- --------- -------- --------- ------------ --------- Segment result before exceptional items 3,558 835 1,796 509 - 6,698 Exceptional items - - - - - - ------------------------------ ----------- --------- -------- --------- ------------ --------- Segment result 3,558 835 1,796 509 - 6,698 ------------------------------ ----------- --------- -------- --------- ------------ --------- Central administration costs (495) Net finance expenses (1,276) Income tax (1,133) ------------------------------ ----------- --------- -------- --------- ------------ --------- Profit for the six months ended 30 September 2015 3,794 ------------------------------ ----------- --------- -------- --------- ------------ --------- Balances at 30 September 2015 Segment assets 141,597 24,388 35,441 13,304 3,342 218,072 ------------------------------ ----------- --------- -------- --------- ------------ --------- Segment liabilities (77,767) (19,340) (44,382) (8,721) (3,160) (153,370) ------------------------------ ----------- --------- -------- --------- ------------ --------- Capital expenditure - property, plant and equipment 653 261 396 229 - 1,539 - intangible 162 - 31 - - 193 Depreciation 1,091 332 362 84 - 1,869 Amortisation 133 20 29 19 - 201 ------------------------------ ----------- --------- -------- --------- ------------ --------- Year ended 31 March 2016 Revenue - external 109,723 34,097 65,259 27,871 - 236,950 - inter segment 2,085 337 - - (2,422) - ------------------------------ ----------- --------- -------- --------- ------------ --------- Total segment revenue 111,808 34,434 65,259 27,871 (2,422) 236,950 ------------------------------ ----------- --------- -------- --------- ------------ --------- Segment result 5,700 2,874 3,465 1,494 - 13,533 ------------------------------ ----------- --------- -------- --------- ------------ --------- Central administration costs (909) Net finance expenses (2,763) Income tax (2,219) ------------------------------ ----------- --------- -------- --------- ------------ --------- Profit for the year ended 31 March 2016 7,642 ------------------------------ ----------- --------- -------- --------- ------------ --------- Balances at 31 March 2016 Segment assets 114,171 18,029 (3,789) 9,806 4,296 142,513 ------------------------------ ----------- --------- -------- --------- ------------ --------- Segment liabilities (46,711) (10,499) (6,678) (4,956) (2,297) (71,141) ------------------------------ ----------- --------- -------- --------- ------------ --------- Capital expenditure - property, plant and equipment 1,508 530 1,924 415 - 4,377 - intangible 285 16 56 25 - 382 Depreciation 2,062 654 711 169 - 3,596 Amortisation 163 40 55 27 - 285 ------------------------------ ----------- --------- -------- --------- ------------ ---------
3 Exceptional items
Six months Six months 12 months ended ended ended 30 Sep 30 Sep 31 Mar 2016 2015 2016 GBP000 GBP000 GBP000 ----------------------------------------- ---------- ---------- --------- Acquisition of Lang Companies Inc. - transaction and restructuring costs(a) 504 - - - gain on bargain purchase(b) (1,067) - - ----------------------------------------- ---------- ---------- --------- Total (563) - - - income tax credit (26) - - ----------------------------------------- ---------- ---------- --------- (589) - - ----------------------------------------- ---------- ---------- --------- (a) Transaction and restructuring costs relating to the acquisition of the Lang business.
(b) Gain on the bargain purchase on the acquisition of the Lang business (see note 7 for further details).
4 Cash, loans and borrowings
Net debt
Six months Six months 12 months ended ended ended 30 Sep 30 Sep 31 Mar 2016 2015 2016 GBP000 GBP000 GBP000 -------------------------------------------------- ---------- ---------- --------- Cash and cash equivalents 5,381 1,327 8,380 Bank overdrafts (4,576) (2,871) (1,508) -------------------------------------------------- ---------- ---------- --------- Cash and cash equivalents per cash flow statement 805 (1,544) 6,872 Bank loans and borrowings (75,402) (73,038) (22,142) Loan arrangement fees 406 273 209 Finance leases (2,200) (3,733) (2,422) -------------------------------------------------- ---------- ---------- --------- Net debt as used in the executive summary (76,391) (78,042) (17,483) -------------------------------------------------- ---------- ---------- ---------
Split between current and non-current
Six months Six months 12 months ended ended ended 30 Sep 30 Sep 31 Mar 2016 2015 2016 GBP000 GBP000 GBP000 -------------------------------------- ---------- ---------- --------- Non-current liabilities Secured bank loans - (20,553) (18,425) Loan arrangement fees 254 158 76 -------------------------------------- ---------- ---------- --------- 254 (20,395) (18,349) -------------------------------------- ---------- ---------- --------- Current liabilities Asset backed loan (51,043) (42,585) (797) Revolving credit facilities (24,359) (4,471) - Current portion of secured bank loans - (5,429) (2,920) -------------------------------------- ---------- ---------- --------- Bank loans and borrowings (75,402) (52,485) (3,717) Loan arrangement fees 152 115 133 -------------------------------------- ---------- ---------- --------- (75,250) (52,370) (3,584) -------------------------------------- ---------- ---------- ---------
Finance leases of GBP2,200,000 (2015: GBP3,733,000) are included within other financial liabilities and are split GBP1,703,000 (2015: GBP3,077,000) non-current and GBP497,000 (2105: GBP656,000) current.
Loan arrangement fees represent the unamortised portion of costs in arranging the new three year facilities which commenced in June 2016.
Drawings under the revolving credit facility are classified as short term in the above table, as current drawings under the facilities mature within one year.
5 Taxation
Six months Six months 12 months ended ended ended 30 Sep 30 Sep 31 Mar 2016 2015 2016 GBP000 GBP000 GBP000 ----------------------------------------------------------- ---------- ---------- --------- Current tax expenses Current income tax charge 1,376 481 1,520 Deferred tax expense Relating to original and reversal of temporary differences 390 652 699 ----------------------------------------------------------- ---------- ---------- --------- Total tax in income statement 1,766 1,133 2,219 ----------------------------------------------------------- ---------- ---------- ---------
Taxation for the six months to 30 September 2016 is based on the effective rate of taxation, which is estimated to apply in each country for the year ended 31 March 2017.
6 Earnings per share
Six months ended Six months ended 12 months ended 30 Sep 2016 30 Sep 2015 31 Mar 2016 ------------------ ------------------ ----------------- Diluted Basic Diluted Basic Diluted Basic ----------------------------- --------- ------- --------- ------- --------- ------ Adjusted earnings per share excluding exceptional items and LTIP charge 9.6p 9.8p 6.4p 6.5p 13.2p 13.5p Cost per share on LTIP charge (1.1p) (1.1p) (0.4p) (0.3p) (1.2p) (1.2p) ----------------------------- --------- ------- --------- ------- --------- ------ Adjusted earnings per share excluding exceptional items 8.5p 8.7p 6.0p 6.2p 12.0p 12.3p Earnings per share on exceptional items 1.0p 1.0p - - - - ----------------------------- --------- ------- --------- ------- --------- ------ Earnings per share 9.5p 9.7p 6.0p 6.2p 12.0p 12.3p ----------------------------- --------- ------- --------- ------- --------- ------
The basic earnings per share is based on the profit attributable to equity holders of the Parent Company of GBP5,865,000 (2015: GBP3,643,000) and the weighted average number of ordinary shares in issue of 60,442,000 (2015: 59,220,000) calculated as follows:
As at As at As at 30 Sep 30 Sep 31 Mar Weighted average number of shares in thousands of 2016 2015 2016 shares -------------------------------------------------------- ------ ------ ------ Issued ordinary shares at 1 April 59,257 58,206 58,206 Shares issued in respect of share placing 1,049 - - Shares issued in respect of exercising of share options 136 1,014 637 -------------------------------------------------------- ------ ------ ------ Weighted average number of shares at end of the period 60,442 59,220 58,843 -------------------------------------------------------- ------ ------ ------
Total number of options, over 5p ordinary shares, in issue at 30 September 2016 was 1,210,000 (2015: 1,540,285).
Adjusted basic earnings per share excludes exceptional items and LTIP charges which were a net charge of GBP307,000 (2015: GBP300,000) along with the tax relief attributable to those items of GBP209,000 (2015: GBP69,000). This gives an adjusted profit of GBP5,963,000 (2015: GBP3,874,000).
7 Acquisitions of subsidiaries
Acquisitions in the current period
On 11 July 2016, the Group acquired all of the share capital of Lang Companies Inc. ("Lang") for a cash consideration of GBP2,669,000 ($3,443,000). Acquisition costs of GBP260,000 were incurred during the period and expensed in the income statement as an exceptional item. Lang is a design-led supplier of high-quality branded consumer home décor and lifestyle products, based in the USA. Lang is a natural fit with the Group, being a design-led company with complementary products and markets. There are natural synergy opportunities with the Group in sourcing and cross selling. In the period from acquisition to 30 September 2016 Lang contributed net profit of GBP761,000 to the consolidated Group net profit for the six months ended 30 September 2016. If the acquisition had occurred on 1 April 2016, Group revenue would have been GBP150,606,000 and net profit would have been GBP6,077,000. In determining these amounts, management has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition occurred on 1 April 2016.
Effect of acquisition
The acquisition had the following effect on the Group's assets and liabilities (numbers are provisional).
Recognised values on acquisition GBP000 ------------------------------------------------------------------------ ----------- Property, plant and equipment 298 Intangible assets 1,225 Inventories 2,967 Trade and other receivables 6,005 Trade and other payables (6,002) Deferred tax liabilities (757) ------------------------------------------------------------------------ ----------- Net identifiable assets and liabilities 3,736 ------------------------------------------------------------------------ ----------- Total cash consideration paid 2,669 ------------------------------------------------------------------------ ----------- Gain on bargain purchase recognised immediately in the income statement 1,067 ------------------------------------------------------------------------ -----------
The gain on bargain purchase arose as a result of the sum of the net assets acquired being greater than the amount paid. This was possible due to the low number of potential acquirers for the business.
Directors and advisers
John Charlton
Non-Executive Chairman
Anders Hedlund
Founder and Non-Executive Deputy Chairman
Paul Fineman
Chief Executive Officer
Anthony Lawrinson
Chief Financial Officer and Company Secretary
Lance Burn
Executive Director
Elaine Bond
Non--Executive Director
Mark Tentori
Non--Executive Director
Financial and nominated adviser and broker
Cenkos Securities Plc
6, 7, 8, Tokenhouse Yard
London EC2R 7AS
Auditor
KPMG LLP
Altius House
One North Fourth Street
Milton Keynes MK9 1NE
Registered office
No 7, Water End Barns
Water End
Eversholt MK17 9EA
IG Design Group plc is registered in England and Wales, number 1401155
Share registrar
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham BR3 4TU
Tel UK: 0871 664 0300 (Calls cost 10p per minute plus network extras. Lines are open from 8.30am to 5.30pm, Monday to Friday)
Tel overseas: +44 (0)20 8639 3399
Email: shareholderenquiries@capita.co.uk
Visit us online at thedesigngroup.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFITLDLTFIR
(END) Dow Jones Newswires
November 29, 2016 02:00 ET (07:00 GMT)
1 Year IG Design Chart |
1 Month IG Design Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions