Ig Design Share Discussion Threads

[hastings] 30/4/2024 07:31

Broker has moved adj PBT to $25.9m from $20.5m

[justiceforthemany] 30/4/2024 07:28

Adjusted PBT for the full year is lower than that for H1.
Make sense?

[aleman] 30/4/2024 07:23

The company says it is trading ahead of expectations. This is what they were before the update. It's possible they might restart the dividend this year with a small final, given the very strong cash performance.

Two brokers.
Average target 255p.
EPS consensus 2024 7.1p, 2025 16.8p, 2026 22.3p.
Div consensus 2024 0.0p, 2025 5.4p, 2026 8.0p.

[tonytyke2] 30/4/2024 07:20

Great stuff, increased profit and margins, cash nearly doubling.

[deanowls] 30/4/2024 07:16

Mcap-120m
Cash-75m
Profit 21m
Good second half in americas and weak comparables going forward.

Glad I took a few more yesterday.

[masurenguy] 30/4/2024 07:16

Trading Update for the 12 months ended 31 March 2024
Significant growth in profit and strong cash flow, ahead of expectations

IG Design Group plc provides an update on its financial performance for the year ended 31 March 2024.

The Group has continued to make good progress on its turnaround journey of improving operational efficiency and simplifying the business. These initiatives have resulted in significant growth in profit and margin for the year. The Group expects to deliver adjusted profit before tax of $25.9m (FY23: $9.2m), which is ahead of market expectations. The Group's adjusted operating profit margin is expected to be c3.8% which is a further recovery of 200 bps on the previous year.

The Group expects to deliver revenue for the year in line with expectations of c$800 million. This is a 10% reduction year-on-year and is split between the Group's divisions as follows:

- The DG Americas division experienced a decline of c16%. This was mainly in the first half of the year which was down 24% due to lower volume across a number of categories. Pleasingly during the second half of the year, revenue stabilised and was down c1%.

- The DG International division was in line with prior year on a reported currency basis. Softness in the UK and Australia markets was more than offset by continued momentum across continental Europe.

Financial position

The Group closed the year with a net cash balance of $95 million (FY23: $50m), a $45m year-on-year increase which is well ahead of market expectation. The Group was average cash positive for the year despite its traditional seasonal cycle of working capital movements. This improved cash position was driven by increased profitability and continued improvements in working capital management throughout the Group. Moving forward, the cash position of the Group is expected to continue strengthening due to its financial performance and sale of freehold sites following footprint consolidation in the DG Americas division. The Group expects to make a provision of c$5.5m* for potential liabilities relating to pre-acquisition era duties owed in the DG Americas division and is taking legal advice on the matter. Due to the historic nature of this issue, the results for the year ended 31 March 2024 will be adjusted accordingly.

* Subject to further legal review

Outlook

The financial performance delivered in the year has been ahead of expectations and reflects the Board's aspiration to return to pre-Covid adjusted operating profit margins of 4.5% by 31 March 2025. The increase in profitability came from both divisions, with the DG Americas division growing 132% (c$4m) and DG International growing 61% (c$12m). Whilst the Board expects momentum to continue into the year ahead; more of the profit growth should come from the DG Americas division. Management initiatives to underpin this track in line with expectations. The Board is pleased with the operational progress and financial performance of the Group. As highlighted in our interim results, there remains caution in consumer shopping behaviour which holds down demand in certain markets and product categories. That said, actions taken over the past two years provide confidence in the delivery of the expectations for the year ahead, with the Group on track to deliver on its margin target for 31 March 2025.

Paul Bal, CEO, commented:"I am delighted with our progress in improving operational efficiency and simplifying our business. Through our work, we have delivered another year with significant improvement in profit and margin. I thank all of my colleagues for their hard work as we continue on our journey. Looking ahead, whilst the external environment remains uncertain, we remain confident that our strategy is the right one, and that we will achieve our aspiration to return the Group to pre-Covid-19 adjusted operating profit margins by 31 March 2025."

[bigbigdave] 30/4/2024 07:08

Significant growth in profit and strong cash flow, ahead of expectations

[deanowls] 29/4/2024 12:51

Well off the highs. I expect net cash and for me it’s when does it rerun back to growth after shedding loss/low margin contracts.

From the tweet by scsw at the weekend I believe this to be one of their features in the next issue.

GLA

[aleman] 29/4/2024 11:00

Two brokers.
Average target 255p.
EPS consensus 2024 7.1p, 2025 16.8p, 2026 22.3p.
Div consensus 2024 0.0p, 2025 5.4p, 2026 8.0p.

These should move nicely if the update confirms everything is on track. It's priced like it's not making any money rather than generating good earnings and expected to pay a healthy dividend soon. If numbers turn out good - particularly debt - there could be a small dividend surprise this year. A third of earnings would be around 2p. I'm not expecting it but would definitely not rule it out. I think the market is a little nervous about the impact that the Middle East might be having, though, so equally there could be a little bad news in there. The share price seems to be erring towards that, perhaps too cautiously?

[aishah] 24/4/2024 14:34

I have added here recently. share price has drifted 20% since Jan. fcst p/e=6.2 and peg=0.1. As others have said there's a big gap between NTAV and Mkt cap.

[hastings] 16/4/2024 11:50

Enjoyed a very good 45 minute catch up with a lot of ground covered and plenty going on within the business.Impressed with both the CEO and CFO and their strategy.The TU will be on the 30th and I'll add my write up on that day, as it makes much more sense than posting it before then.Suffice to say, in short, they are comfortable with the recent broker note which although not surprising is nevertheless welcome.

[time 2 retire] 16/4/2024 08:25

Can you ask about the likelihood of a divi this financial year please Hastings.
Many thanks.

[hastings] 16/4/2024 07:57

Not sure how much they'll be able to say when I speak with them later, given the TU is imminent!

[deanowls] 16/4/2024 07:57

I’m guessing they can tell you nothing new then Hastings, maybe everything in line but would have been better to have a current update to ask questions over.

The communication and frequency leaves a lot to be desired.

[time 2 retire] 16/4/2024 07:44

Or maybe not.
I've said it before this company is it's own worse enemy when it comes to news releases, or lack of them!

[hastings] 15/4/2024 13:36

I'm assuming the TU is tomorrow, given I have a call with them late morning.

[blackhorse23] 15/4/2024 11:03

Money moved to GNC & encouraging return

[time 2 retire] 14/4/2024 06:25

hastings, have you confirmation on which day the trading update is due and can I ask where you get your info please? TIA

[hastings] 10/4/2024 08:56

I have a call lined up with management next week to coincide with the pre-close TU.
Will add a write up on the back of that for interest.

[time 2 retire] 09/4/2024 20:41

Canaccord Genuity reiterated it's buy rating yesterday so that was probably why we had a good day!

[aleman] 08/4/2024 13:53

We know it does not take a lot to move these either way. Maybe the seller has backed off and there's a little speculative buying ahead of the year-end update. There's certainly more volume for some reason, with the shares at the lowest they've been since the last news and that was pretty good. We only need margin recovery without sales growth and the shares should rise, and the board sounded reasonably conifident of that. Any outlook for revenue growth would be a big bonus. So, hopefully we should hear some good news soon and this looks as good an entry point as any when looking at recent months' share price action.

[lord gnome] 08/4/2024 11:56

Doesn't seem to take much to move the price unless - there is something I don't know.

[time 2 retire] 08/4/2024 10:40

Was we tipped somewhere on the weekend or was everyone waiting for the new tax year before pilling in?

[deanowls] 01/4/2024 10:46

I’m expecting sales down but cash positive. The busy period had passed and freight will normalize. They are doing a lot more in house now I think.

[dan_the_epic] 01/4/2024 10:25

Will freight costs (they said they were more floating at half results) and a weak christmas consumer cause a profit warning?