Times may be tough, but cards and gift wrap specialist, International Greetings, is making progress. Strip out £1.1m of exceptional costs, for example, and half-year pre-tax profit actually rose 50 per cent to £3.2m. Those exceptionals cover director redundancies and a factory move in China that should cut costs significantly going forward.
A profit margin improvement was helped by the sale of much more own brand gift wrap and present accessories - on a like-for-like basis, they jumped from 54 per cent of sales to 62 per cent. There were also cost savings on sourcing materials and by spreading manufacturing more evenly over the year, which helped offset rising raw material costs. There was an increase in volume sales, too, thanks to links to discount stores, notably Poundland and 99p Stores in the UK and Dollar Tree in the US. Not surprisingly, discount stores have reported good results as customers trade down in difficult times. Profits did slip in continental Europe - but the performance improved in the UK and Australia while, in the US, profits advanced from £262,000 to £1.15m following a rationalisation.
Broker Arden expects adjusted pre-tax profit of £6.9m for 2012, giving EPS of 7.1p.
INTERNATIONAL GREETINGS (IGR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 64p | MARKET VALUE: | £34.7m | |
| TOUCH: | 63-65p | 12-MONTH HIGH: | 84p | LOW: 53p |
| DIVIDEND YIELD: | nil | PE RATIO: | 10 | |
| NET ASSET VALUE: | 91p* | NET DEBT: | 167% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 217 | 4.27 | 3.00 | nil |
| 2011 | 110 | 2.13 | 1.80 | nil |
| % change | -49 | -50 | -40 | - |
| * Includes intangible assets of £33.1m or 61p a share Aim: Personal & household goods | ||||
