Kit up with The Pebble Group

Management’s organic growth ambitions are focused primarily on customer acquisition and increasing the range of products it sells to existing clients. But like the rest of the marketing industry, the group’s progress has been held back by the coronavirus. In the three weeks to the end of April this year, the group received just over a quarter of the orders it received in the same period in 2019. But business is starting to rebound – orders have steadily regained ground and are tracking at around half the level of last year.

This recovery is supported by the continued growth of Facilisgroup, which accounted for around one-third of underlying profit in 2019, but which broker Berenberg forecasts could account for over half of 2020 cash profits. The division has only seen “minor disruption” from the coronavirus. Its ‘@ease’ software is designed to streamline processes and strengthen productivity for promotional product distributors. The division has added 15 new ‘partners’ (clients) since the start of the year to mid-June, taking the total to 164, which excludes five awaiting implementation. Over the same period, partner sales order values were up by more than two-thirds and its platform’s annualised spend has risen above $1bn (£0.81bn) for the first time.   

But that will not be enough to offset the hit to earnings in a rocky first half this year. It is also worth bearing in mind that the majority of Brand Addition's revenue is derived from its Corporate Programmes – on which coronavirus has had a major impact. Management previously warned that it did not expect a material recovery in order levels here until lockdown measures were loosened. But with the UK slowly returning to normal, current trading suggests that The Pebble Group should be back on track by 2021.

In the meantime, the group maintains a healthy enough balance sheet, with the world balances of £9.4m as of 23 June, including a £7.7m drawdown from a £10m committed revolving credit facility.