Ig Design Share Discussion Threads

[shanklin] 18/10/2019 07:37

Thank you rivaldo

[rivaldo] 18/10/2019 07:35

Hi Shanklin. No idea about Canaccord's forecasts I'm afraid.

Progressive Equity Research have this morning issued a new note - they've left their numbers unchanged for the moment, presumably because it's too early in the year to do so. They conclude very bullishly as follows:



"Reaping the rewards: This H1 performance is testament to the group’s clear strategic focus, built on leveraging its core strengths and grasping market opportunities. Despite topical challenges including Brexit, trade tariffs and lower global economic growth rates, the group’s focus on its three key strategic drivers (working with winners, design & innovation, efficiency & scale) has continued to deliver strong growth, which is set to continue in FY20E and beyond. The group’s geographic diversification spreads and reduces commercial risk, and its policy of working with winners mitigates downside risk in those local markets facing structural and economic challenges. Given this unerring strategic focus, an active acquisition pipeline, and with the cross-selling opportunities and benefits from the Impact acquisition yet to be fully realised, the outlook for FY21E and beyond is for continued strong growth and market share gains."

[shanklin] 18/10/2019 07:16

Hi rivaldo

Any idea please as to whether Canaccord also upped their forecasts. I find it quite difficult to believe IGR will only meet FY expectations.

Thank you, Martin

[rivaldo] 17/10/2019 22:53

Nice finish - looks like new highs.

Cheers Pug. Here's confirmation of Canaccord's Buy recommendation and 800p target:

[pugugly] 17/10/2019 09:04

Canaccord target price now 800p - Would be nice if achieved.

[rivaldo] 17/10/2019 07:09

Excellent H1 update - as confident as usual, with a "strong performance" and already able to state they're confident of meeting expectations given the high order book.

And there's "an active pipeline of acquisition opportunities throughout all regions"....

[time 2 retire] 12/10/2019 07:11

We could be getting the H1 trading update next week, was on Oct 16th last year...

[rivaldo] 10/10/2019 07:32

Berenberg today reiterate their Buy and 680p target:

[time 2 retire] 03/10/2019 23:29

IC tip in full..

If broker forecasts are to be believed, IG Design (IGR) will have nearly trebled underlying EPS over five years by the time it finishes its current financial year to the end of March 2020. We think a US acquisition a year ago provides the potential for the group to build on this impressive performance.
IG Design develops and sells gift packaging, cards and stationery, as well as creative play products. It has operations in 80 countries, but following a recent acquisition the US is by far its largest geography, generating half its sales last year, or 68 per cent factoring in a full year from its August 2018 stateside acquisition.

By virtue of being in the gifting market, trading is skewed heavily towards Christmas, where it makes 56 per cent of its sales. Debt also surges around this time; a noteworthy risk.

The group has “end-to-end221; capabilities to design, manufacture and distribute its products. Products manufactured in-house account for roughly 30 per cent of sales. However, it is still vulnerable to shifts in raw materials prices, Brexit uncertainty and US-China trade tensions. Control of the whole process has contributed sustained margin improvements over recent years (see chart). Meanwhile, the “working with the winners” strategy has propelled sales growth. In 2019, IG's top 10 clients accounted for 48 per cent of sales, from 39 per cent the year before. Organic sales growth for the year was 9.8 per cent, while underlying operating margins rose from 7.1 to 7.3 per cent and return on capital employed (excluding intangibles and cash) climbed from 22.5 to 24.3 per cent.The group's adjusted cash profit to average net debt – the so-called leverage ratio – also continued its downward trend, despite last year's acquisition spending.

Key to sustaining the trends shown in our chart will be the long-term success of last August's £82.2m acquisition of Impact Innovations. Last year, IG took £8.2m of exceptional costs associated with the deal, including restructuring charges that should help set in train expected annual cost savings of $5m (£4.1m) within three years. More importantly, Impact introduces important customers to IG including big US retailers such as Target and Walmart – the latter will account for around a fifth of group revenues.

IC view.

IG Design has grown rapidly in recent years, and its focus on big-ticket customers looks to be paying off already. Any acquisition carries integration risk, and with a deal as big as Impact this should not be ignored. However, IG has gained an important foothold with big US players and we take comfort from management’s solid track record. We think 18 times forward earnings is a price worth paying for the group's recharged growth prospects. Buy.

Last IC View: Hold, 600p, 11 Jun 2019

[rivaldo] 03/10/2019 22:54

Good news, thx Jeff H.

[time 2 retire] 03/10/2019 17:42

Jeff H, great stuff, cheers.

[jeff h] 03/10/2019 17:30

IC Tip of the Week - paper copy of the IC delivered tomorrow.

[rivaldo] 16/9/2019 06:44

Nice...



"IG Design (IGRI)

Who’s trading? Citywire AA-rated Roland Arnold

The trade: BlackRock’s UK small cap expert ramped up his stake in in greeting card and gift wrap maker IG Design Group from 3.9% of shares to just over 5% worth £23.2 million at a price of 588p.

How have the shares performed? The stock has effectively flatlined over the past 12 months but following a strong earlier run remains 112% higher over the last three years.

What does the company say? IG Design’s programme of global expansion has created what it says is the world’s largest gift wrapping business as well as feeding into the bottom line, with adjusted profits 41% higher at £32.6 million last year. Revenue was up 37% to £448 million.

What’s the outlook? Following an expansionary phase the business has begun to share the benefits with a recent 50% increase in its final dividend lifting the full-year pay out 42% to 8.5p. The average City target price has climbed from 520p to 740p over the last year on a unanimous ‘buy’ rating."

[shanklin] 11/9/2019 10:02

Based on the recent TS, broker estimates seem very conservative IMHO.

[rivaldo] 11/9/2019 09:35

Yep, great to see Liontrust declaring with just over 5%. Hopefully they will continue buying :o))

[time 2 retire] 09/9/2019 14:42

Looks like another new major share holder just jumped on board, bought circa £24 million worth of shares....

[time 2 retire] 02/9/2019 09:10

Thanks Rivaldo, a nice read.

[rivaldo] 02/9/2019 08:50

Nice feature on Citywire this morning re Octopus' stake increase:



"IG Design (IGRI)

Who’s trading? Citywire AAA-rated Richard Power

The trade: Octopus’ micro-cap expert upped his stake in in greeting card and gift wrap maker IG Design Group from 9.2% of the shares to just over 10% worth £46 million at a share price of 589p

How have the shares performed? The stock is 146% higher over the last three years and is just off an all-time record high of 620p.

What does the company say? Power has rapidly upped his exposure as the share price has climbed this year, as an ambitious foray into North America created the world’s largest gift wrapping business and helped deliver a 37% increase in revenue. Earnings per share climbed 33% last year.

What’s the outlook? City brokers have rapidly revised their forecasts higher over the last year as overseas acquisitions helped boost organic revenue growth of almost 10%, with the median target price rising from 520p to 740p. Despite the speed of this year’s appreciation that means a further 26% rerating is predicted."

[jeff h] 29/8/2019 08:22

Progressive Equity also produced a report yesterday:-

"Design Group’s trading update confirms continued progress across its three strategic drivers with both revenue and profit showing strong year on year growth. This positive momentum reflects a combination of underlying organic growth and the full year effect of the Impact acquisition in the US last August, along with its successful integration with existing operations. Order book and production volumes are both ahead of last year and in line with company expectations. Our forecasts remain unchanged at this stage, albeit with potential upside to FY21E from a successful cross selling initiative with a US retailer....."

[rivaldo] 29/8/2019 06:47

Berenberg say Buy:



"IG Design a ‘multi-year winner’, says Berenberg

Berenberg analyst Owen Shirley believes greeting cards business IG Design Group (IGR) is a ‘multi-year winner’ thanks to its consolidation of the global gifting market.

He maintains a ‘buy’ recommendation on the stock and a target price of 680p. The shares were trading at 591p yesterday.

A trading update from IG revealed progress across a number of its strategic priorities.

‘Most notably, the company is scaling the US gifting business, capturing the UK paper bag opportunity and continuing to improve its balance sheet strength, which should provide further firepower for accretive mergers and acquisitions,’ said Shirley.

The takeover of Impact Innovations in August 2018 has helped with plans for scaling up its US business, along with an ultra high-speed printing press which is being installed in Memphis in November. IG also agreed a distribution deal with one of the US’s largest retailers for its 1,500 stores nationwide.

In the UK, it invested in its first paper bag manufacturing line at a factory in South Wales. Its ‘printing and design expertise combined with its operational capabilities, have helped it to gain significant traction in a market that remains relatively nascent, following the ban on free plastic bags in the UK in late 2015’ said Shirley.

Demand has been so significant that a second manufacturing line is to launch in the second half of the year and consideration for further investment is already underway."

[rivaldo] 28/8/2019 07:23

Yet another excellent trading update - can't ask for more:



Crucially, Xmas supplu must have gone/be going extremely well to enable the CEO to say

"The momentum throughout the business continues apace alongside good forward visibility of our order book going into the remainder of the year".

And all of this bodes very well too:

"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."

[time 2 retire] 15/8/2019 14:27

Good news for Walmart today, probably IGRs biggest customer.

[boonboon] 13/8/2019 18:57

Quite a few well know retailers using the bags. Joules, jd sports, Black's, Schuch and new look amongst others. Could become a substantial business.

[jeff h] 13/8/2019 14:13

A couple of stories whilst we await updates:-

[time 2 retire] 09/8/2019 15:30

It's nice to see octopus still adding to its holding.

About time we had the next break out....