IG Design (IGR) was hit by a combination of Covid-19 disruption and US/China trade disputes during the year to March. Indeed, the final month of the gifting and stationery group’s fiscal trading period coincided with a dramatic worsening of the coronavirus crisis. Widespread lockdowns led to unshipped customer orders and lost production activity – weighing on its capacity to absorb overhead costs into inventory.
Those dampeners were compounded by the restructuring of IG’s US business, and costs tied to its recent acquisition of American company CSS. Together, such factors meant that group operating profits contracted from £33.4m to £4.6m.
That said, Covid-19 started to bite at a moment when IG Design’s coffers were well-resourced. A £120m placing in January contributed to the group’s highest-ever net cash balance of more than £42m (ex-lease liabilities), sitting alongside £200m in extended banking facilities.
And the current year has started well, according to IG. First-quarter reported revenues were bolstered by CSS, which has – among other benefits – brought the group greater manufacturing capacity and a new ‘craft’ specialism – something that has proved popular amid ‘stay at home’ orders. Total like-for-like revenues were ahead of bosses’ virus-adjusted expectations, but down by over a quarter when incorporating the impact of Covid-19.
Broker N+1 Singer expects adjusted EPS of 15p for FY2021, down from 27.7p in FY2020.
| IG DESIGN (IGR) | ||||
| ORD PRICE: | 514p | MARKET VALUE: | £ 495m | |
| TOUCH: | 502-514p | 12-MONTH HIGH: | 798p | LOW: 301p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 311p* | NET DEBT: | 26%** | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 237 | 9.9 | 12.3 | 2.5 |
| 2017 | 311 | 13.0 | 15.7 | 4.5 |
| 2018 | 328 | 19.7 | 21.2 | 6.0 |
| 2019 | 448 | 17.3 | 16.2 | 8.5 |
| 2020 | 494 | 0.26 | 17.0 | 8.8 |
| % change | +10 | -98 | +5 | +3 |
| Ex-div: | 01 Oct | |||
| Payment: | TBC Nov 2020 | |||
| *Includes intangible assets of £113m or 118p a share. **Includes lease liabilities of £76.9m | ||||
