TIDMIGR
RNS Number : 4656H
IG Design Group PLC
25 March 2020
25 March 2020
IG Design Group plc
("Design Group", the "Company" or the "Group")
COVID-19 Update
IG Design Group plc, one of the world's leading designers,
innovators and manufacturers of celebrations, craft, gifting,
stationery and creative play products, today issues a trading and
financial update noting the impact of COVID-19.
Trading update
The Company announced on 4 March 2020 that it was trading in
line with market expectations after taking into account the initial
impact of the COVID-19 outbreak on the Group's operations in China
and the completion of the CSS Industries Inc. ("CSS") acquisition
on 3 March 2020. Since then, our China operations have continued to
operate at increased production levels and remain operational
today.
Across the wider Group, during March, the continued spread of
the virus and associated prevention measures has seen reduced
demand from customers and disruption to our operations and customer
deliveries. As of today, our manufacturing and distribution in the
UK and Europe have been suspended temporarily, in line with
guidance, with our office based teams now working from home where
possible. In the US our business operations are partially suspended
in certain states but otherwise operating where possible elsewhere.
Our Australian business remains operational. Across the Group,
health and safety remains our priority and our businesses are
operating within the appropriate guidelines.
Considering these developments, the Company's current financial
year performance, to 31 March 2020 will see an impact, although
this will be substantially limited to March trading.
Looking ahead and the Christmas Season
Looking ahead, as the situation continues to develop, the Board
is preparing for an impact on customer order volumes across all
parts of the business over the coming months, although the scale of
this is not yet known at this stage. This will have an impact on
the financial performance of the Group, but because this impact is
correlated to how order volumes change it is too early to fully
assess. We are in close conversation with our customers and remain
focused on the fulfilment of our everyday orders while working with
customers on developing their seasonal and event based
programmes.
It is important to note that the critical ordering period for
customers for the Christmas season is between January to May each
year, and the Company has already built a substantial order book
for Christmas 2020 with its biggest customers. Alongside this, it
is anticipated that the Group's diversity across category, channel
and geography will provide resilience in the current
environment.
The Company expects to announce a trading update following the
end of its March 2020 financial year in April 2020.
Actions being taken
Considering the anticipated change in demand across some of the
business, the Directors believe that it is important to take
prudent steps to mitigate and manage our cost base and cash flow.
These include:
-- All non-essential expenditure and capital investment has been frozen
-- Careful management of cash resources
-- Optimisation of overheads
The Company is also assessing its final dividend payment for the
financial year ended March 2020 and will provide further
clarification in its April 2020 trading update. The Directors are
committed to the payment of dividends, however, believe the
maintenance of a strong balance sheet during this period of
instability is of the upmost importance.
Financial update
At the end of the current financial period Design Group is
expected to have net cash in the range of GBP30m-GBP35m. In
addition, the Company has access to bank facilities in excess of
GBP220m and, if drawn, these facilities have covenants which are
calculated on a historic twelve-month basis. The Directors are
therefore comfortable that the Company has a strong balance sheet
from which to manage the current situation.
CSS
Notwithstanding the wider challenges, the Company, following the
completion of the CSS acquisition on 3 March 2020, has successfully
commenced the integration of CSS into the wider Group, and has
already started to realise cost synergies.
Outlook
The Directors are confident of the Group's ability to weather
the current situation and look forward to continuing to drive the
business forward over the long term.
For further information, please contact:
IG Design Group plc Tel: 0152 588
7310
Paul Fineman, Chief Executive Officer
Giles Willits, Chief Financial Officer
Canaccord Genuity Limited (Nominated Adviser Tel: 0207 523
and Broker) 8000
Bobbie Hilliam, NOMAD
Alex Aylen, Sales
Alma PR Tel: 0203 405
0205
Rebecca Sanders-Hewett
Susie Hudson
Sam Modlin
About IG Design Group plc
IG Design Group plc, the largest consumer gift packaging
business in the world, is a designer, innovator and manufacturer of
products that help people celebrate life's special occasions.
Design Group works with more than 11,000 customers in over 80
countries throughout the UK, Europe, Australia and the USA.
Its products are found in over 210,000 retail outlets, including
several of the world's biggest retailers, for example Walmart,
Target, Amazon, Costco, Lidl and Aldi. Its brand, Tom Smith, also
holds the Royal Warrant for the supply of Christmas crackers and
Christmas wrapping paper to the Royal family. Design Group is a
diverse business operating across multiple regions, categories,
seasons and brands.
Its five major product categories are: Celebrations, Craft,
Stationery and Creative Play, Gifting, and Not-for-resale
consumables. It offers customers a full end-to-end service from
design through to distribution, offering both branded and bespoke
products from the value-focused through to the higher-margin ends
of the market.
The Company was admitted to the Alternative Investment Market of
the London Stock Exchange in 1995 under the name 'International
Greetings plc' and rebranded to IG Design Group plc in 2016. For
further information please visit www.thedesigngroup.com.
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END
UPDKZLFLBXLLBBF
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