EMBARGOED UNTIL 26th NOVEMBER
2024
IG Design Group
PLC
(the "Company", the "Group"
or "Design Group")
Results for the six months
ended 30 September 2024
IG Design Group plc, one of the
world's leading designers, innovators and manufacturers across
various celebration and creative categories announces its unaudited
results for the six months ended 30 September 2024 ('the
period').
Financial highlights for the six months ended 30 September
2024:
|
Financial Highlights
|
|
|
HY2025
|
HY2024
|
|
Revenue
|
|
|
$393.1m
|
$444.1m
|
|
Adjusted(a)
|
|
|
|
|
|
Operating profit
|
|
$14.7m
|
$38.2m
|
|
Profit before tax
|
|
$13.3m
|
$34.8m
|
|
Diluted earnings per
share
|
|
11.2c
|
25.0c
|
|
Reported
|
|
|
|
|
|
Operating profit
|
|
$7.1m
|
$37.5m
|
|
Profit before tax
|
|
$5.7m
|
$34.1m
|
|
Diluted earnings per
share
|
|
4.1c
|
24.4c
|
|
Net cash/(debt) as at the period
end
|
|
$7.4m
|
$(15.1)m
|
|
|
|
|
|
|
(a) Adjusted results exclude
the impact of adjusting items - for further detail see alternative
performance measures reconciliation within the detailed financial
review
|
·
|
Group revenue decline mainly
impacted by previously communicated trends of a competitive US
retail environment experiencing subdued consumer sentiment along
with some timing
|
|
·
|
Lower profits driven primarily by
reduced revenue coupled with ongoing material cost headwinds; with
initiatives underway to improve profitability in the second half of
the year
|
|
·
|
Adjusting items totalling $7.6
million (HY2024: $0.7 million) relate to the closure of the China
manufacturing site and restructuring in DG Americas
|
|
·
|
Net cash of $7.4 million is a
significant year-on-year improvement, with continued strong cash
management
|
Operational & strategic highlights
|
·
|
Transformation of the Group
continues, with particular focus on the DG Americas
division
|
|
·
|
DG Americas CEO recruitment
progressing well
|
|
·
|
Closure of in-house China
operations well underway with seasonal manufacturing successfully
completed and orders shipped on schedule
|
|
·
|
Broader roll-out of our
"shrink-free" SmartwrapTM innovation, resulting in a
reduction of 29 tonnes of plastic in the period
|
|
·
|
Increased focus on bringing value
to our categories through licencing and branding, as well as the
online channel
|
|
·
|
Strategic investment in new
bag-making capabilities in Europe now operational, supporting
customer demand for near-shoring solutions
|
|
·
|
Developing supplier networks in
Mexico and India
|
Outlook
|
·
|
Remain on track to return adjusted
operating profit margins to proforma pre-pandemic levels of at
least 4.5% in FY2025
|
|
·
|
Business simplification,
efficiency and cost-saving initiatives will drive profit recovery
in H2 such that we expect to deliver a profit in that period,
compared to a loss in that period last year
|
|
·
|
The challenging market conditions
and retail trends experienced in the period are expected to
continue in H2
|
|
·
|
It is too early to comment on what
impact, positive or negative, any future changes in international
trade tariffs resulting from the incoming US administration will
have on the Group
|
Stewart Gilliland, Chair, commented:
"Our focus on our path to growth remains steadfast, being a
strategy of winning with the winning retailers and reducing the
complexity across our business. We have made good progress
throughout our turnaround, particularly as we remain on track to
return margins to pre-pandemic levels, and although the broader
conditions have perhaps become more difficult, our ambition has not
abated.
The challenging macroeconomic backdrop has undoubtably
impacted the confidence of retailers, but we are focused on
navigating this landscape by prioritising the essentials of
improved delivery, increased collaboration and price
competitiveness, to a strong customer base with who we have
longstanding relationships.
Whilst the economic landscape remains uncertain, we continue
to strengthen our business model to better withstand market
challenges and this, coupled with our strong customer relationships
and the commitment of our team, continue to fill me with confidence
that we will deliver profit growth.
I
would like to extend my gratitude to my colleagues, whose hard work
has been essential in helping to drive the Group forward and
continuing to advance on our turnaround
journey."
For further information, please
contact:
|
IG Design Group plc
Paul Bal, Chief Executive
Officer
Rohan Cummings, Chief Financial
Officer
|
Tel: +44 (0)1525
887310
|
|
Canaccord Genuity Limited (Nomad and
Broker)
Bobbie Hilliam
Harry Pardoe
|
Tel: +44 (0)20 7523
8000
|
|
Alma Strategic Communications
Rebecca Sanders-Hewett
Sam Modlin
Will Merison
|
Tel: +44 (0)20 3405
0205
designgroup@almastrategic.com
|
Overview
In the first half of the year, the
Group experienced an 11% decline in revenue driven by the previously
communicated subdued consumer demand, which resulted in cautious
retailer ordering across some key markets, predominantly in the US,
and somewhat in the UK and Australia. Alongside this, prudent
trading decisions have been made in the US market when working with
customers that posed increased credit risk. These factors, coupled
with some markedly increased costs over the period, such as
freight, resulted in a 62% drop in adjusted operating profit to $14.7
million. Revenue in DG
Americas declined 14%, across both seasonal and everyday
categories, while DG International declined 6%, with growth in
continental Europe offsetting softening in the UK and Australia
markets.
Despite these pressures,
operational improvements are underway which will deliver further
benefits and margin improvements in the second half of the year,
with key strategic initiatives, such as the cessation of in-house
manufacturing in China and a restructuring in DG Americas,
beginning to take effect. The second half of the year should also
see some softening in freight costs.
Net cash continues to be strong,
and the Group has been cash positive for the entire six month
period. Cash balances have also exceeded prior year levels,
reflecting another period of strong cash management. The Group
expects to end the year in a strong net cash position.
Many of our teams and our
customers have had to work through some very challenging market
conditions, as many consumers still struggle with higher costs of
living, higher interest rates and higher tax burdens over the
period. It is a testament to our teams and their high level of
engagement with, and dedication to the business that the Group is
able to better able to navigate this environment.
Outlook
This is our third year of the
Group's three-year turnaround journey and despite some of the
markets we operate in becoming much tougher than when that journey
began, we remain confident that we can restore adjusted operating
profit margin to the Board's aspiration of at least the 4.5% that
was the proforma pre-pandemic margin following the acquisition of
CSS in March 2020, by the end of the year. This represents
continued strong year-on-year improvement in both profit and cash
flow compared to the prior financial year, albeit towards the lower
end of the Board's profit expectations set at the start of the
year.
We continue to progress on our
strategy, building the capabilities that our customers value, which
will give us competitive advantage and deliver sustainable
profitable revenue growth. However, we must continue with reducing
complexity that does not provide commensurate returns. The goal
remains of creating a more resilient business model that can better
withstand market challenges. Business model simplification,
efficiency and cost-saving initiatives across the Group, especially
in DG Americas, will drive profit recovery in the second half of
the year such that we expect to deliver a profit in that period,
compared to a loss in that period last year.
The economic and geo-political
backdrop remains fragile and uncertain in some of our key markets,
especially the US, with consumer sentiment understandably subdued,
resulting in a very competitive retail environment. This is
prompting us to remain cautious in how we manage our exposures.
However, we remain encouraged and confident that our strategy of
winning with the winning retailers is the right one. Our orderbook
stands at 84% at October 2024 (86% at this stage last year) which
reflects the delayed ordering from customers in the uncertain
market conditions. Despite the slightly reduced orderbook this
year, we remain confident in the strength of our partnership with
the winning retailers. Our strong, longstanding relationships with
our customers, along with price competitiveness, increased
collaboration and improved service are key to navigating the
challenges faced as a result of this uncertain
landscape.
During and since the recent US
presidential elections, there has been much speculation and press
coverage on the subject of international trade tariffs. It is not
yet clear how the tariff regime in the US will change, nor how
other countries will respond to any changes. Therefore, the Board
cannot yet comment on how this will affect our future trading. As a
domestic manufacturer of a number of categories there may be some
positive impact that offsets any potential inflationary
consequences. As the incoming new US Government's plans are
communicated, we will then be in a position to evaluate the
opportunities and risks that any changing tariffs will
present.
The Group has reviewed the
implications of the recent budget announcement by the UK
Government. As part of its forecasting, the Board anticipated some
of the changes that were announced such as the increase in the
National Minimum Wage. The reduction in the National Insurance
threshold was not anticipated, and when combined with the rise in
the employers' National Insurance rate to 15% the effect is to add
c.$0.7 million to the Group's annual operating costs from next
year.
Regional highlights
Revenue in the period
declined 11% reflecting the continuation of trends seen last year
including lower consumer demand leading to reduced ordering by our
retail customers, as well as our careful management of our credit
risk exposure to some customers. This decrease in revenue, coupled with increased
sourcing, manufacturing and freight costs resulted in an
adjusted operating profit
decline of 62% to $14.7 million. The split between our DG Americas
and DG International divisions is as follows:
|
|
|
|
Segmental
Revenue
|
|
Adjusted Operating Profit/
(Loss)
|
|
Adjusted Operating
Margin
|
|
% Group revenue
|
|
|
HY2025
|
HY2024
|
% growth
|
|
HY2025
|
HY2024
|
% growth
|
|
HY2025
|
HY2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62%
|
DG Americas
|
$m
|
241.8
|
282.4
|
(14)%
|
|
1.7
|
16.6
|
(90)%
|
|
0.7%
|
5.9%
|
|
38%
|
DG International
|
$m
|
151.3
|
161.7
|
(6)%
|
|
16.9
|
25.3
|
(33)%
|
|
11.2%
|
15.7%
|
|
|
Elims / Central costs
|
$m
|
-
|
-
|
|
|
(3.9)
|
(3.7)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100%
|
Total
|
$m
|
393.1
|
444.1
|
(11)%
|
|
14.7
|
38.2
|
(62)%
|
|
3.7%
|
8.6%
|
Design Group Americas
The DG Americas division, which
makes up 62% of Group revenue, continued to face revenue
challenges during the period, with a 14% revenue decline to $241.8 million
(HY2024: $282.4 million). This decrease is driven by reduced demand
across both seasonal and everyday categories as our retail
customers ordered more cautiously in light of the economic backdrop
and subdued consumer sentiment. Whilst mix and pricing was
positive, as we sought to recover margin, volume was down
significantly as customers reduced order quantities. Some of this
volume decline may be attributable to the uncertainty felt in the
run-up to the recent US presidential elections, though this is
difficult to gauge. Whilst we won additional tenders, the market
remains very competitive which has also reduced volumes and
resulted in net lost business. Further to this, our cautious
approach to managing credit risk exposure, given the current
economic conditions, further impacted revenues. The year-on-year
revenue decline spans various product categories, most
significantly impacting more discretionary spend such as ribbons
& bows (within gift packaging), stationery and partyware
(within party). This was particularly evident in the value and mass
channel, but which is expected to see some recovery in the second
half of the year as that channel gains most in the present consumer
climate. The Independents channel also experienced lower consumer
demand, and this looks more prolonged. Despite the challenges,
there were positive developments with craft and patterns continuing
to perform well, and core gift wrap showed resilience. It is also
pleasing to see e-commerce sales have grown year-on-year,
reflecting our increased strategic focus on this.
The loss of revenue resulted in
adjusted operating profit
falling to $1.7m in the period. Rising raw material, manufacturing
and freight costs put further pressure on profitability as they
could not be fully recovered through pricing given the market
environment. While we successfully reduced overheads, these savings
were not enough to offset the combined impact of lower sales and
cost headwinds in the period, especially sea and road freight.
There are further business optimisation benefits that will
materialise in the second half of the year, resulting from
initiatives such as the recent restructuring of the commercial team
to simplify and better align it with our simplified business model.
We are also continuing our site reviews, with two freehold
properties currently on the market. These efforts, amongst others,
should benefit profits in the second half of the year and the
adjusted operating margin
of 0.7% should improve by the end of the financial year.
Following the departure of the DG
Americas CEO in July 2024, we have been actively recruiting a
successor to accelerate and complete the division's transformation
and return it to profitable revenue growth. The process is
advancing well. In the interim, the US leadership team is reporting
directly to Paul Bal who is visiting the US regularly. To
facilitate this, other Board members and senior leaders are
supporting Paul by covering some of his Group-wide
responsibilities.
Alongside the focus of developing
our e-commerce capabilities, DG Americas has continued to develop
and broaden its supplier base. Near-shoring efforts concentrated on
Mexico continue, and we are establishing a sourcing team in
India.
Design Group International
DG International, which
contributes over a third of the Group's revenue at $151.3 million,
experienced a 6% decline in revenue compared to the prior year.
This performance also reflects a continuation of the trends seen
last year, with growth from key customers in continental Europe
helping to offset ongoing softness in the UK and Australian
markets. Whilst volume was only slightly lower, pricing came under
pressure compared to last year.
In the UK, following an extended
period of high inflation, interest rates and the cost of living
crisis, consumer spending has continued to be suppressed,
particularly in more discretionary product categories such as party
supplies. Retailers have adopted a cautious approach to ordering,
focusing on managing inventory levels amid the weaker demand. In
Australia, while the economy has begun to show signs of recovery,
consumer confidence remains subdued due to household debt concerns
and cost pressures, leading to similarly cautious ordering patterns
in non-essential categories. Continental Europe, by contrast, has
remained more resilient, driven by relatively resilient consumer
sentiment and supported by our strategy of winning alongside the
winning retailers.
As a result of these regional
dynamics, DG International's homeware category and activity
products (within craft) performed strongly, gift packaging
delivered a stable performance, while the party category
experienced the most significant decline. Additionally, some orders
have shifted into the second half of the year, further impacting
first-half comparisons, but benefitting the second half.
Adjusted operating profit for
the period was $16.9 million, down 33% from the prior year. The
adjusted operating margin
of 11.2% was 450 bps lower, primarily due to higher cost headwinds,
particularly in freight, which more than offset raw material cost
savings, and could not be fully offset through sales price
recovery. Notwithstanding the tougher retail environment, our
International division has made operational improvements, including
restructuring shift patterns and better utilising or releasing
surplus warehousing space. These initiatives have helped mitigate
some of the pressures from rising costs. Additionally, as announced
in June, the Board took the strategic decision to cease in-house
manufacturing in China to reduce business complexity and streamline
operations. The lower volumes produced through the China site in
the first half resulted in lower profits compared to the prior
period, but winding down the facility is expected to yield
significant benefits in the second half as no further costs will be
incurred with respect to the running of the site, and we therefore
avoid the typical seasonality-driven losses from this
period.
Looking ahead, further
improvements are anticipated in the second half of the year from
the aforementioned exit of in-house manufacturing in China, as well
as freight costs also turning more favourable. Therefore, although
margins were compressed in the first half, we are confident that
recovery will be seen by year-end as these operational efficiencies
and strategic shifts such as the wider roll-out of our
"shrink-free" SmartwrapTM innovation begin to
materialise and support the strong trading performance,
particularly in continental Europe.
Our products, brands and channels
The Group is well-positioned to be
the partner of choice for our retail customers providing a diverse,
yet complementary, product portfolio. As regulatory and societal
requirements become more onerous, we believe that we are best
placed to reliably service an increasingly complex market place for
our product categories.
Last year, we redefined our
product categories to reflect a new structure for our overall
assortment, centred around two key themes: 'Celebrate' and
'Create'. This realignment is supported by our evolving
organisational structures, and it allows for more strategic focus
on commercial and competitive opportunities. Each of these themes
is further divided into three distinct product categories, ensuring
clarity and alignment within our business. This is set out in the
table below:
|
Revenue by product category
|
HY2025
|
|
HY2024
|
|
Gift packaging
|
45%
|
$178.3m
|
|
44%
|
$197.5m
|
|
Party
|
11%
|
$45.4m
|
|
13%
|
$57.7m
|
|
Goods not for resale
|
7%
|
$27.4m
|
|
7%
|
$30.1m
|
|
Celebrate
|
63%
|
$251.1m
|
|
64%
|
$285.3m
|
|
Craft
|
17%
|
$65.0m
|
|
16%
|
$70.4m
|
|
Stationery
|
6%
|
$22.8m
|
|
7%
|
$30.1m
|
|
Homeware
|
14%
|
$54.2m
|
|
13%
|
$58.3m
|
|
Create
|
37%
|
$142.0m
|
|
36%
|
$158.8m
|
|
Total
|
|
$393.1m
|
|
|
$444.1m
|
On the whole, the overall mix
across the six new product categories remains largely consistent
with last year. Celebrate, in particular Gift packaging, continues
to be the Group's leading product category comprising gift wrap,
gift bags, ribbons & bows and cards. Whilst Gift packaging has
declined 10% in the period, over half of this is considered phasing
and is expected to recover in the second half of the year. The
decline in the Party and Stationery categories reflect the
underlying market conditions for more discretionary spend areas,
with the former particularly impacted by the softened trading in
the UK and Australia, and the latter most significantly impacted by
the lower customer orders in the US. Our Craft category has
remained resilient, despite being affected by the difficult US
retail environment.
|
Revenue by customer channel
|
HY2025
|
|
HY2024
|
|
Value & Mass
|
71%
|
$280.4m
|
|
72%
|
$317.6m
|
|
Independents
|
16%
|
$61.9m
|
|
16%
|
$71.4m
|
|
Specialists
|
10%
|
$39.9m
|
|
10%
|
$46.6m
|
|
Online
|
3%
|
$10.9m
|
|
2%
|
$8.5m
|
|
Total
|
|
$393.1m
|
|
|
$444.1m
|
The Value & Mass channel,
which represents over 70% of Group revenue, saw a decline of $37.2m
in the period, largely due to a generally subdued market and lower
customer ordering, though some of this reduction is anticipated to
shift into the second half of the year. Despite the economic
pressures, this channel demonstrated more resilience compared to
the other 'brick and mortar' channels. The Specialist channel faced
the steepest decline (14%), reflecting ongoing consolidation of the
retail environment, especially in the US, coupled with our decision
to more prudently manage US retail credit risk. Pleasingly, the
Online channel revenue grew by 28% in the period, which is
reflective of our strategic focus on this channel, starting with
our Craft assortments.
|
Revenue by season
|
HY2025
|
|
HY2024
|
|
Christmas
|
50%
|
$196.4m
|
|
50%
|
$223.3m
|
|
Minor seasons
|
4%
|
$17.2m
|
|
4%
|
$19.2m
|
|
Everyday
|
46%
|
$179.5m
|
|
46%
|
$201.6m
|
|
Total
|
|
$393.1m
|
|
|
$444.1m
|
In the period there has been very
little change to our seasonality, with all seasons impacted to some
degree by the revenue decline. Christmas revenue decline is driven
by our customers ordering more cautiously ahead of seasonal peaks
reflecting weakened consumer sentiment. Everyday sales are also
experiencing similar consumer sentiment challenges, however they
have also been particularly impacted by our credit risk exposure
management of certain US retail customers.
|
Revenue by brand
|
HY2025
|
|
HY2024
|
|
Licensed
|
12%
|
$47.7m
|
|
10%
|
$45.2m
|
|
Customer own brand /
bespoke
|
52%
|
$205.9m
|
|
55%
|
$243.1m
|
|
DG brand
|
36%
|
$139.5m
|
|
35%
|
$155.8m
|
|
Total
|
|
$393.1m
|
|
|
$444.1m
|
Licensed sales grew in the period
with pockets of growth across the Group reflecting our efforts to
maintain and grow value across our overall product assortment. We
have extended our relationships in this area, particularly in DG
Americas, in some cases through collaborations with our larger
customers. This is an area we continue to seek and explore further
opportunities in. There is also increased focus on further
strengthening our existing brands such as Tom Smith®.
Environmental, Social and Governance (ESG)
The Group's sustainability
framework, "Helping Design a Better Future," continues to guide our
sustainability efforts across three key pillars: People, Product,
and Planet. Our strategy remains focused through bringing our scale
and influence to bear, especially when in collaboration with our
customers. We recognise that our responsibilities extend to our
employees, communities, and the environment, and we are committed
to upholding the highest ethical standards whilst minimising
environmental impact and driving positive change.
Our sustainability approach is
ever evolving, in the FY2024 Annual Report we continued to report
progress against our key performance indicators (KPIs). While we
take pride in our progress, we acknowledge that we are still in the
early stages in our journey and there is always more that can be
done. We will continue to develop our sustainability framework,
both internally-driven, but also in collaboration with our
customers' priorities and agendas in this area. Specifically, this
means refining our priorities and KPIs, setting targets, and
establishing goals to foster positive transformation and strive to
be the most sustainable we can be. Through transparent reporting,
continual improvement and, in time, introducing measurable goals,
we aim to integrate sustainability seamlessly into every aspect of
our operations, ensuring that our actions today lay the foundation
for a better future.
Integrating sustainability into
our business strategy not only aligns with our core values but also
gives us competitive advantage and resilience. In line with our new
strategy of being the partner of choice and winning together, we
will refine our approach to sustainability by also looking through
the lenses of our key customers. We will evaluate how our
sustainability strategies align with theirs and how we can achieve
our mutual sustainability goals. These insights will shape our
future priorities, allowing us to better set our own aspirations
and targets, whilst continuing successful collaborations with key
customers.
People remain central to our
success, and we have furthered our investment in employee
engagement, leadership, and technical development initiatives. We
are proud of key achievements, such as a 10% reduction in accidents
last year. During the period, we conducted our first, full and
comprehensive Group-wide staff engagement survey which had a
pleasingly high engagement rate of 78%. The findings from the
survey are now being followed-up with further engagement and
action-planning to make Design Group an even better place to work.
As a further enabler for increased Group-wide collaboration and
leverage, we have re-articulated the Group's purpose, vision,
mission and values, and these now better align with the new
growth-focused strategy, and are being embedded across the
Group.
Our product innovations have
driven sustainability improvements, notably the expansion of our
shrink-free Smartwrap™ solution, with over half of our continental
European gift wrap customers buying the solution in FY2024. And now
with the rollout in DG UK progressing well, and trials underway in
DG Americas, the growth is expected to continue into the future.
The roll-out of Smartwrap™ during the period has saved over 29
tonnes of plastic by removing the shrink film from the end consumer
giftwrap packaging. These innovations align with, and help deliver,
our customers' sustainability goals. During the period we have also
initiated a PIMS (Product Information Management System) project to
develop a Group-wide platform for capturing product information to
better support traceability and provenance.
Within Planet, we have made
progress in managing climate-related risks and reporting scope 1
and 2 emissions, while collaborating with major customers to meet
their initial environmental targets ahead of schedule. This marks a
significant step in our commitment to sustainability, as we work
toward a more sustainable future for both the business and the
planet. Further to this, during the period, we have seen solar
panelling introduced in our contract manufacturing sites in Mexico
which make further progress on reducing greenhouse gas
emissions.
Detailed financial review
The Group's financial results are
summarised below, setting out both the reported and the adjusted
results.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HY2025
|
|
HY2024
|
|
|
|
|
Reported
|
Adjusting
items
|
Adjusted
|
|
Reported
|
Adjusting
items
|
Adjusted
|
|
|
|
|
$m
|
$m
|
$m
|
|
$m
|
$m
|
$m
|
|
Revenue
|
|
|
393.1
|
-
|
393.1
|
|
444.1
|
-
|
444.1
|
|
Gross profit
|
|
|
65.1
|
2.2
|
67.3
|
|
93.0
|
0.4
|
93.4
|
|
Overheads
|
|
|
(58.0)
|
5.4
|
(52.6)
|
|
(55.5)
|
0.3
|
(55.2)
|
|
Operating profit
|
|
|
7.1
|
7.6
|
14.7
|
|
37.5
|
0.7
|
38.2
|
|
Net finance costs
|
|
(1.4)
|
-
|
(1.4)
|
|
(3.4)
|
-
|
(3.4)
|
|
Profit before tax
|
|
|
5.7
|
7.6
|
13.3
|
|
34.1
|
0.7
|
34.8
|
|
Tax
|
|
|
(1.3)
|
(0.9)
|
(2.2)
|
|
(9.5)
|
(0.2)
|
(9.7)
|
|
Profit after tax
|
|
|
4.4
|
6.7
|
11.1
|
|
24.6
|
0.5
|
25.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
|
|
|
7.1
|
7.6
|
14.7
|
|
37.5
|
0.7
|
38.2
|
|
Depreciation and impairment of PPE
and software
|
6.8
|
(0.8)
|
6.0
|
|
6.9
|
-
|
6.9
|
|
Depreciation and impairment of right
of use assets
|
7.7
|
-
|
7.7
|
|
7.6
|
0.6
|
8.2
|
|
Acquisition amortisation
|
|
0.9
|
(0.9)
|
-
|
|
0.9
|
(0.9)
|
-
|
|
EBITDA
|
|
|
22.5
|
5.9
|
28.4
|
|
52.9
|
0.4
|
53.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
|
4.1c
|
7.1c
|
11.2c
|
|
24.4c
|
0.6c
|
25.0c
|
Revenue for the period ended
30 September 2024 declined by 11% to $393.1 million (HY2024:
$444.1 million) driven by ongoing economic challenges, subdued
consumer sentiment, and careful management of credit risk exposure.
Revenue at constant currency was down 12%.
Adjusted operating profit decreased 62% year-on-year to $14.7 million (HY2024:
$38.2 million). The reduction in revenue as well as rising
manufacturing and freight costs put pressure on profitability, and
while we successfully reduced overheads, these savings were not
enough to offset the combined impact of lower sales and cost
headwinds in the period. Furthermore, the lower volumes produced
through the China site, following the strategic decision to exit
in-house manufacturing, impacted profits, but will yield benefits
in the second half of the year with no further operating costs
expected to be incurred with respect to the running of the site.
Adjusted gross margin at
17.1% (HY2024: 21.0%) and adjusted
operating margin at 3.7% (HY2024: 8.6%) are both down
year‑on-year,
reflecting the increase in costs and phasing shift in profitability
into the second half of the year. Similarly, the above, combined
with higher adjusting items in the period, resulted in an
operating profit of $7.1
million (HY2024: $37.5 million). The adjusting items of $7.6
million (HY2024: $0.7 million) are higher than the prior year, with
costs being incurred in the current year to allow for the
restructuring across the Group to drive business simplification.
Further details of the adjusting items are detailed
below.
The above resulted in an
adjusted profit before tax
of $13.3 million (HY2024: $34.8 million) and a reported
profit before tax of $5.7
million (HY2024: $34.1 million). Adjusted profit after tax was
$11.1 million (HY2024: $25.1 million) with the reported
profit after tax for the
period at $4.4 million (HY2024: $24.6 million).
Net finance costs
Net finance costs were lower than
the prior year, being $1.4 million (HY2024: $3.4 million). The
average net cash was significantly more favourable, largely due to
a strong opening cash position.
Adjusting items
Adjusting items are material items
or items of an unusual or non-recurring nature which represent
gains or losses which are separately presented by virtue of their
nature, size and/or incidence. The Group's adjusting items to
operating profit for the six months ended 30 September 2024 include
a net expense of $7.6 million (HY2024: $0.7 million) as a result of
the following events:
|
Adjusting items
|
|
|
|
|
|
|
|
HY2025
|
HY2024
|
|
|
|
|
|
|
$m
|
$m
|
|
Integration and restructuring
(costs)/income
|
|
|
|
|
(6.7)
|
0.2
|
|
Amortisation of acquired
intangibles
|
|
|
|
|
|
(0.9)
|
(0.9)
|
|
Total
|
|
|
|
|
|
|
|
(7.6)
|
(0.7)
|
Integration and
restructuring costs - $6.7 million (HY2024: $0.2 million
income)
In order to realise synergies from
acquisitions or existing businesses, integration and restructuring
projects are respectively undertaken that aim to deliver future
savings and efficiencies for the Group. These are projects outside
of the normal operations of the business and typically incur
one-time costs to ensure successful implementation. As such it is
appropriate that costs associated with projects of this nature be
included as adjusting items. The costs incurred in HY2025 relate to
the restructuring of the DG Americas and DG UK (and its
subsidiaries in Asia) businesses:
DG Americas business reorganisation: In the period ended 30 September 2024 further restructuring
costs, relating to staff, of $2.2 million have been recognised in
DG Americas. In addition, a further $0.2 million of costs have been
incurred in relation to a warehouse consolidation
project.
China site closure -
Following the announcement in June 2024 of the closure of Huizhou
Gift International Greetings Co Ltd a subsidiary of DG UK, the
business has incurred $4.3 million of restructuring costs in the
period ended 30 September 2024. Of this $4.3 million, $3.0 million
relates to staff costs, $0.8 million relates to asset write-downs,
and $0.5m relates to other closure costs. The asset write-down
resulted from assets classified as held for sale during the period
being measured at the lower of their carrying amount and fair value
less costs to sell at the time of reclassification.
Amortisation of acquired
intangibles - $0.9 million charge (HY2024: $0.9 million
charge)
Under UK IFRS, as part of the
acquisition of a company, it is necessary to identify intangible
assets such as customer lists and trade names which form part of
the intangible value of the acquired business but are not part of
the acquired balance sheet. These intangible assets are then
amortised to the income statement over their useful economic lives.
These are not operational costs relating to the running of the
acquired business and are directly related to the accounting for
the acquisition. As such, we include these as adjusting items. In
the current year, the amortisation relates to brands acquired as
part of the acquisition of Impact Innovations Inc.
(Impact).
Taxation
The taxation charge for the half
year on profit before tax is $1.3 million (HY2024: $9.5 million)
with the effective tax rate at 23.3% (HY2024: 27.9%). The taxation
charge on adjusted profit before tax is $2.2 million (HY2024: $9.7
million) with the effective tax rate at 16.2% (HY2024:
27.8%).
The changes in profit mix across
the various territories as well as the changes across territories
in the H1/H2 split are the main drivers that impact the effective
tax rate. The effective tax rate in the UK is currently 0% as
deferred tax is not recognised, and the H1/H2 profit split in this
territory is the largest contributor to the low effective rate in
the period.
The key driver behind the higher
effective tax rate between adjusted and reported profit is
adjusting items for which no tax relief has been attributed. These
are the costs associated with the China site closure given there
will be no future profits to offset these costs against and there
is no tax loss carry back claim in China.
Earnings per share
Diluted adjusted earnings per share
at 11.2 cents (HY2024: 25.0 cents) is reduced
year-on-year driven by the decline in the underlying profit after
tax for the period. Diluted
earnings per share at 4.1 cents (HY2024: 24.4 cents) which
is lower than adjusted diluted earnings per share reflects the
adjusting items charge in the period. Further details are set out
in note 9.
Dividend
Whilst the Group remains on its
path to profit and margin recovery, and given the challenging
retail environment persisting in the US and some other markets, the
Board is not recommending an interim dividend for the period ended
30 September 2024 (HY2024: nil).
The Group currently intends to
provide an update to its capital allocation policy alongside the
publication of the FY2025 results.
Cash flow and net cash
The Group ended the period with
its net cash balance at $7.4 million (HY2024:
$15.1 million net debt). The year‑on‑year cash balance improved as a
result of a stronger opening cash position. While there were some
improvements in working capital these were more than offset by
lower profit levels.
|
Cash flow
|
HY2025
|
HY2024
|
|
|
$m
|
$m
|
|
Adjusted EBITDA
|
28.4
|
53.3
|
|
Add back for share-based payment
charge
|
0.7
|
0.6
|
|
Movements in working
capital
|
(96.2)
|
(99.5)
|
|
Adjusted cash used by operations
|
(67.1)
|
(45.6)
|
|
Adjusting items within cash used by
operations
|
(4.7)
|
(1.8)
|
|
Cash used by operations
|
(71.8)
|
(47.4)
|
|
Capital expenditure (net of
disposals of property, plant and equipment)
|
(3.1)
|
(5.2)
|
|
Tax paid
|
(3.2)
|
(1.3)
|
|
Interest paid
|
(1.0)
|
(2.3)
|
|
Lease liabilities principal
repayments
|
(8.4)
|
(9.7)
|
|
Dividends paid (including those
paid to non-controlling interests)
|
(0.7)
|
-
|
|
FX and other
|
0.4
|
0.3
|
|
Movement in net cash/(debt)
|
(87.8)
|
(65.6)
|
|
Opening net cash
|
95.2
|
50.5
|
|
Closing net cash/(debt)
|
7.4
|
(15.1)
|
Working
capital
Working capital levels of the
Group increase steadily in the first half of the year as
manufacturing of seasonal product builds ahead of distribution. The
second half of the year then sees the borrowing levels of the Group
decline and typically move to a net cash position as
Christmas-related receivables are collected. The working capital
outflow in the period was $96.2 million (HY2024: $99.5 million),
with a continued focus on working capital management across the
Group.
Adjusting items within cash
generated from operations
During the period there was a $4.7
million net cash outflow (HY2024: $1.8 million) in relation to
adjusting items, in the current year these cash outflows mainly
relate to the closure of the manufacturing site in China, as well
as staff redundancy costs in DG Americas. In the prior year, the
$1.8 million outflow mainly related to costs incurred in previous
years. Further detail on adjusting items can be seen
above.
Capital
expenditure
Capital expenditure in the period
was lower than the prior year at $3.1 million (HY2024: $5.2
million) with the strategic investments in the innovative
Smartwrap™ solution the most notable expenditure in the period.
Capital expenditure in the second half of the year is expected to
be higher with further investment in Smartwrap™, as well as
continued ERP investment, and relocation to a new warehouse
facility for our DG Australia operations.
Foreign exchange exposure management
The Groups foreign exchange (FX)
exposure is split into two areas:
Translational FX
exposure - The Group's reporting
currency is US dollars and the translation exposure is the result
of the requirement for the Group to report its results in one
currency. This necessitates the translation of our regional
business units' local currency financial results into the Group's
adopted reported currency. For disclosure purposes,
the constant currency amounts recalculate the prior year by
using the exchange rates of the current year to enhance the
comparability of information between reporting periods. The overall
impact on revenue and
profits from currency movements in HY2025 when compared to HY2024
is that the decrease in revenue would have been $2.9 million higher
if HY2024 revenues are translated at HY2025 foreign currency
exchange rates, and the decline in adjusted profit before tax would have
been $0.4 million higher.
Transactional FX
exposure - This FX exposure is
managed carefully by the Group as it can result in additional cash
outflows if not managed appropriately. In response to this risk the
Group adopts an active hedging policy to ensure foreign exchange
movements remain mitigated as far as possible. In addition, a
reasonable proportion of this hedging is achieved through natural
hedges whereby our purchases and sales in US dollars are offset.
The balance of our hedging is achieved through forward
exchange contracts and similar derivatives.
Restatement of comparative amounts
Last year end the Group restated
its prior year figures to reflect the potential liabilities
relating to pre-acquisition era duties, interest, and penalties in
a foreign subsidiary of the DG Americas division. The same year-end
adjustments have been included as opening balance adjustments to
our interim account. These estimates involved assessing historical
data, interpreting relevant tax and legal regulations, and
considering potential outcomes of discussions with tax authorities.
Given the complexity and uncertainty surrounding these liabilities,
management has utilised external professional advice to ensure that
the provisions are reasonable and reflect the most probable
outcomes. Adjustments to these estimates may be required in future
periods as new information becomes available or as circumstances
change.
Refer to note 1 for additional
information.
Financial position and going concern basis
The Group's net assets increased
by $24.0 million to $379.9 million at 30 September 2024
(HY2024: $355.9 million restated). The Directors have
continued to pay close attention to their assessment of going
concern in preparation of these financial statements. The Group is
appropriately capitalised at the period end with a net cash
position of $7.4 million.
The Directors of the Group have
performed an assessment of the overall position and future
forecasts for the purposes of going concern. The going concern
assessment has been performed using the Group's FY2025 and FY2026
budgets and plans. These forecasts have been reviewed in detail by
the Board and take into account the seasonal working capital cycle
of the business. They have been sensitised to reflect severe but
plausible adverse downturns in the current assumptions including
the potential impact of a significant disruption in one of our
major customer's business, as well as potential sales impacts from
macroeconomic and subdued consumer sentiment in DG Americas, beyond
those risks already factored into the budgets and plans.
The base forecasts and additional
sensitivity analysis have been tested against the ABL facility
limits and covenants. The analysis demonstrated that the Group has
sufficient headroom for it to meet its obligations as they fall due
for a forecast period of more than twelve months beyond the date of
signing these accounts and will also be compliant with all
covenants within this time frame. As such, the Directors do not see
any practical regulatory or legal restrictions which would limit
their ability to fund the different regions of the business as
required as the Group has sufficient resources.
Accordingly, the Directors have
continued to adopt the going concern basis of accounting in
preparing the financial statements.
Alternative performance measures
This review includes alternative
performance measures (APMs) that are presented in addition to the
standard UK IFRS metrics. The Directors believe that these APMs
provide important additional information regarding the underlying
performance of the business including trends, performance and
position of the Group. APMs are used to enhance the comparability
of information between reporting periods and segmental business
units by adjusting for exceptional or uncontrollable factors which
affect UK IFRS measures, to aid the understanding of the Group's
performance. Consequently, APMs are used by the Directors and
management for strategic and performance analysis, planning,
reporting and reward setting. APMs reflect the results of the
business excluding adjusting items, which are items that are
material or items of an unusual or non-recurring nature.
The APMs and the definitions used
are listed below:
|
·
|
Adjusted EBITDA - Profit/(loss)
before finance charges, tax, depreciation, amortisation, impairment
(EBITDA) and adjusting items
|
|
·
|
Adjusted gross profit - Gross
profit before adjusting items
|
|
·
|
Adjusted operating profit/(loss) -
Profit/(loss) before finance charges, tax and adjusting
items
|
|
·
|
Adjusted profit/(loss) before tax
- Profit/(loss) before tax and adjusting items
|
|
·
|
Adjusted profit/(loss) after tax -
Profit/(loss) after tax before adjusting items and associated tax
effect
|
|
·
|
Adjusted tax - Tax before
adjusting items
|
|
·
|
Diluted adjusted earnings/(loss)
per share - Diluted earnings/(loss) per share before adjusting
items and associated tax effect
|
|
·
|
Adjusted overheads - Selling
costs, administration expenses, other operating income,
profit/(loss) on disposal of property, plant and equipment
(overheads) before adjusting items
|
|
·
|
Adjusted cash generated from
operations - Cash generated from operations before the associated
cash impact of those adjusting items
|
|
·
|
Net cash - Cash and cash
equivalents, bank overdraft and loan arrangement fees
|
In terms of these APMs, a full
reconciliation between our adjusted and reported results is
provided in the detailed financial review above, from which the
following key performance metrics have been derived:
|
·
|
Adjusted gross margin - Adjusted
gross profit divided by revenue
|
|
·
|
Adjusted operating margin -
Adjusted operating profit divided by revenue
|
|
·
|
Adjusted EBITDA margin - Adjusted
EBITDA divided by revenue
|
|
·
|
Cash conversion - Adjusted cash
generated from operations divided by adjusted EBITDA
|
In addition, the Group calculates
the following key performance measures, which are also APMs, using
the above definitions:
|
·
|
Return on capital employed -
Adjusted operating profit divided by monthly average net capital
employed (where capital employed is net assets excluding net cash
and intangible assets)
|
|
·
|
Average leverage - Average bank
debt (being average debt measured before lease liabilities) divided
by adjusted EBITDA reduced for lease payments
|
Further details of the items
categorised as adjusting items are disclosed in more detail in note
3.
Risk
The Group operates a decentralised
model where the risk management framework is well-established, with
a bottom-up approach starting within each business unit and the
Group team and Board playing an overarching role to ensure
oversight. This allows for risks to be managed within the Board's
tolerance and appetite levels, as well as ensuring risk management
is embedded within strategic and operational decision making. The
risk management framework, along with the principal risks and
uncertainties faced by the Group, remain in line with those set out
on pages 64 to 69 of our annual report and financial statements
2024.
The key risks for the Group at
present continue to be: Macroeconomic uncertainty and Strategy.
Macroeconomic uncertainty continues to be high following the
succession of geopolitical events impacting our business across our
suppliers, customers, consumers and workforce. The outlook is also
set to remain uncertain in the immediate future, which is also
impacting consumers with a high inflationary environment and
subdued sentiment. We therefore need to able to respond
appropriately to external market conditions whilst maintaining a
clear focus on delivering our strategy, focusing on winning with
the winning retailers. Given the journey we are on to address the
Group strategy, this risk remains crucial ensure sustainable profit
growth is achieved.
Statement of Directors' responsibilities
The Directors confirm to the best
of their knowledge that these condensed interim financial
statements have been prepared in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and that the interim management report includes a fair review of
the information, namely:
|
·
|
an indication of important events
that have occurred during the first six months and their impact on
the condensed set of financial statements, and a description of the
principal risks and uncertainties for the remaining six months of
the financial year; and
|
|
·
|
material related-party
transactions in the first six months and any material changes in
the related-party transactions described in the last annual
report.
|
By order of the Board
Rohan Cummings
Director
25 November 2024
CONDENSED CONSOLIDATED INCOME STATEMENT
SIX
MONTHS ENDED 30 SEPTEMBER 2024
|
|
|
Unaudited
|
Unaudited
|
Twelve
|
|
|
|
six months
|
six
months
|
months
|
|
|
|
ended
|
ended
|
ended
|
|
|
|
30 Sep
2024
|
30 Sep
2023
|
31 Mar
2024
|
|
|
Note
|
$000
|
$000
|
$000
|
|
Revenue
|
2
|
393,069
|
444,050
|
800,051
|
|
Cost of sales
|
|
(327,953)
|
(351,069)
|
(658,532)
|
|
Gross profit
|
|
65,116
|
92,981
|
141,519
|
|
Selling expenses
|
|
(20,890)
|
(22,168)
|
(44,143)
|
|
Administration expenses
|
|
(37,439)
|
(33,885)
|
(70,045)
|
|
Other operating income
|
5
|
438
|
522
|
1,903
|
|
(Loss)/profit on disposal of
property, plant and equipment
|
2
|
(246)
|
24
|
(238)
|
|
Profit on disposal of
leases
|
|
70
|
27
|
-
|
|
Operating profit
|
3
|
7,049
|
37,501
|
28,996
|
|
Finance income
|
|
605
|
235
|
1,065
|
|
Finance cost
|
|
(1,958)
|
(3,683)
|
(6,219)
|
|
Profit before tax
|
|
5,696
|
34,053
|
23,842
|
|
Income tax charge
|
6
|
(1,328)
|
(9,485)
|
13,277
|
|
Profit for the period
|
|
4,368
|
24,568
|
37,119
|
|
Attributable to:
|
|
|
|
|
|
Owners of the Parent
Company
|
|
3,974
|
23,911
|
35,625
|
|
Non-controlling interests
|
|
394
|
657
|
1,494
|
Earnings per ordinary share
|
|
|
Unaudited
|
Unaudited
|
Twelve
|
|
|
|
six months
|
six
months
|
months
|
|
|
|
ended
|
ended
|
ended
|
|
|
|
30 Sep
2024
|
30 Sep
2023
|
31 Mar
2024
|
|
|
Note
|
|
|
|
|
Basic
|
9
|
4.2c
|
24.6c
|
36.8c
|
|
Diluted
|
9
|
4.1c
|
24.4c
|
36.6c
|
CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
SIX
MONTHS ENDED 30 SEPTEMBER 2024
|
|
|
|
|
|
|
Unaudited
|
Unaudited
|
Twelve
|
|
|
six months
|
six
months
|
months
|
|
|
ended
|
ended
|
ended
|
|
|
30 Sep
2024
|
30 Sep
2023
|
31 Mar
2024
|
|
|
$000
|
$000
|
$000
|
|
Profit for the period
|
4,368
|
24,568
|
37,119
|
|
Other comprehensive
income/(expense):
|
|
|
|
|
Items that will not be reclassified to profit or
loss
|
|
|
|
|
Re-measurement of defined benefit
pension and health benefit schemes
|
-
|
-
|
(48)
|
|
Items that may be reclassified subsequently to profit or
loss
|
|
|
|
|
Exchange difference on translation
of foreign operations
|
(10,174)
|
(186)
|
(5,502)
|
|
Transfer to profit and loss on
maturing cash flow hedges
|
137
|
139
|
(285)
|
|
Net unrealised (loss)/gain on cash
flow hedges
|
(95)
|
(407)
|
292
|
|
Income tax relating to these
items
|
-
|
-
|
-
|
|
|
(10,132)
|
(454)
|
(5,495)
|
|
Other comprehensive expense for the
period, net of tax
|
(10,132)
|
(454)
|
(5,543)
|
|
Total comprehensive (expense)/income for the period, net of
tax
|
(5,764)
|
24,114
|
31,576
|
|
Attributable to:
|
|
|
|
|
Owners of the Parent
Company
|
(6,628)
|
23,713
|
30,237
|
|
Non-controlling interests
|
864
|
401
|
1,339
|
|
|
(5,764)
|
24,114
|
31,576
|
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
SIX
MONTHS ENDED 30 SEPTEMBER 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to the owners of the Parent Company
|
|
|
|
|
|
|
Share
|
|
|
|
|
|
|
|
|
|
|
premium
|
|
|
|
|
|
|
|
|
|
|
and
capital
|
|
|
|
|
|
Non-
|
|
|
|
Share
|
redemption
|
Merger
|
Hedging
|
Translation
|
Retained
|
Shareholders'
|
controlling
|
|
|
|
capital
|
reserve
|
reserve
|
reserve
|
reserve
|
earnings
|
equity
|
interests
|
Total
|
|
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
|
At
1 April 2024
|
6,201
|
219,210
|
40,883
|
42
|
(5,740)
|
101,022
|
361,618
|
7,869
|
369,487
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
3,974
|
3,974
|
394
|
4,368
|
|
Other comprehensive
(expense)/income
|
-
|
-
|
-
|
42
|
(10,644)
|
-
|
(10,602)
|
470
|
(10,132)
|
|
Total comprehensive (expense)/income for the
period
|
-
|
-
|
-
|
42
|
(10,644)
|
3,974
|
(6,628)
|
864
|
(5,764)
|
|
Transactions with owners in their capacity as
owners
|
|
|
|
|
|
|
|
|
|
|
Equity-settled share-based
payments
|
-
|
-
|
-
|
-
|
-
|
640
|
640
|
-
|
640
|
|
Tax on equity-settled share-based
payments
|
-
|
-
|
-
|
-
|
-
|
13
|
13
|
-
|
13
|
|
Options exercised
|
2
|
-
|
-
|
-
|
-
|
(2)
|
-
|
-
|
-
|
|
Equity dividends paid
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(668)
|
(668)
|
|
Exchange differences on opening
balances
|
377
|
13,352
|
2,490
|
-
|
-
|
-
|
16,219
|
-
|
16,219
|
|
At
30 September 2024
|
6,580
|
232,562
|
43,373
|
84
|
(16,384)
|
105,647
|
371,862
|
8,065
|
379,927
|
SIX
MONTHS ENDED 30 SEPTEMBER 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to the owners of the Parent Company
|
|
|
|
|
|
|
Share
|
|
|
|
|
|
|
|
|
|
|
premium
|
|
|
|
|
|
|
|
|
|
|
and
capital
|
|
|
|
|
|
Non-
|
|
|
|
Share
|
redemption
|
Merger
|
Hedging
|
Translation
|
Retained
|
Shareholders'
|
controlling
|
|
|
|
capital
|
reserve
|
reserve
|
reserve
|
reserve
|
earnings
|
equity
|
interests
|
Total
|
|
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
|
At
31 March 2023
|
6,059
|
214,845
|
40,069
|
38
|
(1,198)
|
68,033
|
327,846
|
6,530
|
334,376
|
|
Restatement (note 1)
|
-
|
-
|
-
|
-
|
802
|
(456)
|
346
|
-
|
346
|
|
At
1 April 2023 (restated note 1)
|
6,059
|
214,845
|
40,069
|
38
|
(396)
|
67,577
|
328,192
|
6,530
|
334,722
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
23,911
|
23,911
|
657
|
24,568
|
|
Other comprehensive
(expense)/income
|
-
|
-
|
-
|
(271)
|
73
|
-
|
(198)
|
(256)
|
(454)
|
|
Total comprehensive income/(expense) for the
period
|
-
|
-
|
-
|
(271)
|
73
|
23,911
|
23,713
|
401
|
24,114
|
|
Transactions with owners in their capacity as
owners
|
|
|
|
|
|
|
|
|
|
|
Equity-settled share-based
payments
|
-
|
-
|
-
|
-
|
-
|
599
|
599
|
-
|
599
|
|
Tax on equity-settled share-based
payments
|
-
|
-
|
-
|
-
|
-
|
(5)
|
(5)
|
-
|
(5)
|
|
Options exercised
|
16
|
-
|
-
|
-
|
-
|
(16)
|
-
|
-
|
-
|
|
Exchange differences on opening
balances
|
(79)
|
(2,878)
|
(537)
|
-
|
-
|
-
|
(3,494)
|
-
|
(3,494)
|
|
At
30 September 2023
|
5,996
|
211,967
|
39,532
|
(233)
|
(323)
|
92,066
|
349,005
|
6,931
|
355,936
|
YEAR ENDED 31 MARCH 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to the owners of the Parent Company
|
|
|
|
|
|
|
Share
|
|
|
|
|
|
|
|
|
|
|
premium
|
|
|
|
|
|
|
|
|
|
|
and
capital
|
|
|
|
|
|
Non-
|
|
|
|
Share
|
redemption
|
Merger
|
Hedging
|
Translation
|
Retained
|
Shareholders'
|
controlling
|
|
|
|
capital
|
reserve
|
reserve
|
reserve
|
reserve
|
earnings
|
equity
|
interests
|
Total
|
|
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
|
At
1 April 2023 (restated - note 1)
|
6,059
|
214,845
|
40,069
|
38
|
(396)
|
67,577
|
328,192
|
6,530
|
334,722
|
|
Profit for the year
|
-
|
-
|
-
|
-
|
-
|
35,625
|
35,625
|
1,494
|
37,119
|
|
Other comprehensive
expense
|
-
|
-
|
-
|
4
|
(5,344)
|
(48)
|
(5,388)
|
(155)
|
(5,543)
|
|
Total comprehensive income/(expense) for the
year
|
-
|
-
|
-
|
4
|
(5,344)
|
35,577
|
30,237
|
1,339
|
31,576
|
|
Transactions with owners in their capacity as
owners
|
|
|
|
|
|
|
|
|
|
|
Equity-settled share-based
payments
|
-
|
-
|
-
|
-
|
-
|
1,432
|
1,432
|
-
|
1,432
|
|
Purchase of own shares
|
-
|
-
|
-
|
-
|
-
|
(3,548)
|
(3,548)
|
-
|
(3,548)
|
|
Options exercised
|
16
|
-
|
-
|
-
|
-
|
(16)
|
-
|
-
|
-
|
|
Exchange differences on opening
balances
|
126
|
4,365
|
814
|
-
|
-
|
-
|
5,305
|
-
|
5,305
|
|
At
31 March 2024
|
6,201
|
219,210
|
40,883
|
42
|
(5,740)
|
101,022
|
361,618
|
7,869
|
369,487
|
In line with the Group's accounting
policy, share capital, share premium, capital redemption reserve,
merger reserve and hedging reserve are translated into US dollars
at the rates of exchange at each balance sheet date and the
resulting cumulative exchange differences are included in
translation reserves.
CONDENSED CONSOLIDATED BALANCE
SHEET
AS
AT 30 SEPTEMBER 2024
|
|
|
|
Restated(a)
|
|
|
|
|
Unaudited
|
Unaudited
|
|
|
|
|
as at
|
as
at
|
As
at
|
|
|
|
30 Sep
2024
|
30 Sep
2023
|
31 Mar
2024
|
|
|
Note
|
$000
|
$000
|
$000
|
|
Non-current assets
|
|
|
|
|
|
Property, plant and
equipment
|
|
60,855
|
66,961
|
67,062
|
|
Intangible assets
|
|
74,134
|
75,277
|
74,754
|
|
Right-of-use assets
|
|
54,212
|
62,106
|
59,115
|
|
Long-term assets
|
|
3,906
|
5,236
|
4,648
|
|
Deferred tax assets
|
|
39,035
|
12,164
|
39,099
|
|
Total non-current assets
|
|
232,142
|
221,744
|
244,678
|
|
Current assets
|
|
|
|
|
|
Asset held for sale
|
|
5,573
|
1,612
|
1,786
|
|
Inventory
|
|
217,921
|
218,794
|
165,401
|
|
Trade and other
receivables
|
|
217,896
|
252,343
|
89,523
|
|
Income tax receivable
|
|
2,491
|
1,964
|
2,522
|
|
Derivative financial
assets
|
10
|
403
|
664
|
68
|
|
Cash and cash equivalents
|
7
|
48,827
|
71,566
|
157,365
|
|
Total current assets
|
|
493,111
|
546,943
|
416,665
|
|
Total assets
|
2
|
725,253
|
768,687
|
661,343
|
|
Non-current liabilities
|
|
|
|
|
|
Loans and borrowings
|
8
|
(495)
|
(1,005)
|
(817)
|
|
Lease liabilities
|
|
47,601
|
54,836
|
51,751
|
|
Deferred income
|
|
1,738
|
1,930
|
1,837
|
|
Provisions
|
|
2,902
|
2,985
|
2,796
|
|
Other financial
liabilities
|
|
10,961
|
14,082
|
14,307
|
|
Deferred tax liabilities
|
|
153
|
163
|
150
|
|
Total non-current liabilities
|
|
62,860
|
72,991
|
70,024
|
|
Current liabilities
|
|
|
|
|
|
Bank overdraft
|
7
|
40,677
|
64,261
|
63,655
|
|
Loans and borrowings
|
8
|
1,257
|
23,397
|
(700)
|
|
Lease liabilities
|
|
14,373
|
15,988
|
15,595
|
|
Deferred income
|
|
513
|
437
|
214
|
|
Provisions
|
|
6,549
|
9,088
|
7,527
|
|
Income tax payable
|
|
10,464
|
11,531
|
12,356
|
|
Trade and other payables
|
|
173,765
|
177,463
|
86,101
|
|
Other financial
liabilities
|
|
34,868
|
37,595
|
37,084
|
|
Total current liabilities
|
|
282,466
|
339,760
|
221,832
|
|
Total liabilities
|
2
|
345,326
|
412,751
|
291,856
|
|
Net
Assets
|
|
379,927
|
355,936
|
369,487
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Share capital
|
|
6,580
|
5,996
|
6,201
|
|
Share premium
|
|
230,767
|
210,331
|
217,518
|
|
Capital redemption
reserve
|
|
1,795
|
1,636
|
1,692
|
|
Merger reserve
|
|
43,373
|
39,532
|
40,883
|
|
Hedging reserve
|
|
84
|
(233)
|
42
|
|
Translation reserve
|
|
(16,384)
|
(323)
|
(5,740)
|
|
Retained earnings
|
|
105,647
|
92,066
|
101,022
|
|
Equity attributable to owners of the Parent
Company
|
|
371,862
|
349,005
|
361,618
|
|
Non-controlling interests
|
|
8,065
|
6,931
|
7,869
|
|
Total equity
|
|
379,927
|
355,936
|
369,487
|
a)
Restated - see note 1 for further details
CONDENSED CONSOLIDATED CASH FLOW
STATEMENT
SIX
MONTHS ENDED 30 SEPTEMBER 2024
|
|
|
|
|
|
|
|
|
Unaudited
|
Unaudited
|
Twelve
|
|
|
|
six months
|
six
months
|
months
|
|
|
|
ended
|
ended
|
ended
|
|
|
|
30 Sep
2024
|
30 Sep
2023
|
31 Mar
2024
|
|
|
Note
|
$000
|
$000
|
$000
|
|
Cash flows from operating activities
|
|
|
|
|
|
Profit for the period
|
|
4,368
|
24,568
|
37,119
|
|
Adjustments for:
|
|
|
|
|
|
Depreciation of property, plant and
equipment
|
|
6,473
|
6,159
|
12,326
|
|
Depreciation of right-of-use
assets
|
|
7,689
|
7,626
|
15,917
|
|
Amortisation of intangible
assets
|
|
1,231
|
1,603
|
3,032
|
|
Net finance cost
|
|
1,353
|
3,448
|
5,154
|
|
Income tax
charge/(credit)
|
|
1,328
|
9,485
|
(13,277)
|
|
Loss/(profit) on disposal of
property, plant and equipment
|
|
246
|
(24)
|
238
|
|
Profit on disposal of
leases
|
|
(70)
|
(27)
|
-
|
|
Equity-settled share-based
payments
|
|
725
|
630
|
1,502
|
|
Operating profit after adjustments for non-cash
items
|
|
23,343
|
53,468
|
62,011
|
|
Change in trade and other
receivables
|
|
(125,359)
|
(163,254)
|
3,997
|
|
Change in inventory
|
|
(48,337)
|
(14,596)
|
40,361
|
|
Change in trade and other payables,
provisions and deferred income
|
|
78,512
|
76,974
|
(18,966)
|
|
Cash (used by)/generated from operations
|
|
(71,841)
|
(47,408)
|
87,403
|
|
Tax paid
|
|
(3,167)
|
(1,272)
|
(5,159)
|
|
Interest and similar charges
paid
|
|
(979)
|
(2,267)
|
(4,536)
|
|
Net
cash (outflow)/inflow from operating activities
|
|
(75,987)
|
(50,947)
|
77,708
|
|
Cash flow from investing activities
|
|
|
|
|
|
Proceeds from sale of property,
plant and equipment
|
|
81
|
42
|
782
|
|
Acquisition of business
|
|
-
|
-
|
(496)
|
|
Acquisition of intangible
assets
|
|
(6)
|
(93)
|
(442)
|
|
Acquisition of property, plant and
equipment
|
|
(3,209)
|
(5,123)
|
(10,254)
|
|
Net
cash (outflow)/inflow from investing activities
|
|
(3,134)
|
(5,174)
|
(10,410)
|
|
Cash flows from financing activities
|
|
|
|
|
|
Purchase of own shares
|
|
-
|
-
|
(3,548)
|
|
Net movement in credit
facilities
|
|
2,000
|
24,000
|
-
|
|
Lease liabilities principal
repayments
|
|
(8,376)
|
(9,666)
|
(18,422)
|
|
Loan arrangement fees
|
|
-
|
(1,873)
|
(2,045)
|
|
Dividends paid to non-controlling
interest
|
|
(668)
|
-
|
-
|
|
Net
cash (outflow)/inflow from financing activities
|
|
(7,044)
|
12,461
|
(24,015)
|
|
Net
(decrease)/increase in cash and cash equivalents
|
|
(86,165)
|
(43,660)
|
43,283
|
|
Cash and cash equivalents and bank
overdrafts at beginning of the period
|
|
93,710
|
50,234
|
50,234
|
|
Effect of exchange rate fluctuations
on cash held
|
|
605
|
731
|
193
|
|
Cash and cash equivalents and bank overdrafts at end of the
period
|
7
|
8,150
|
7,305
|
93,710
|
NOTES TO THE INTERIM FINANCIAL
STATEMENTS
SIX
MONTHS ENDED 30 SEPTEMBER 2024
1. Accounting policies
Basis of
preparation
The condensed financial
information contained in this interim report does not constitute
statutory accounts as defined in Section 435 of the Companies
Act 2006 and is unaudited. Statutory accounts for the year
ended 31 March 2024 were approved by the board of directors
on 24 June 2024 and delivered to the Registrar of Companies. The
report of the auditors on those accounts was unqualified, did not
contain an emphasis of matter paragraph and did not contain any
statement under section 498 of the Companies Act 2006. These
interim financial statements have been reviewed, not
audited.
This condensed consolidated
interim financial report for the half-year reporting period ended
30 September 2024 has been prepared in accordance with the
UK-adopted International Accounting Standard 34, 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority. The
interim report does not include all of the notes of the type
normally included in an annual financial report. Accordingly, this
report is to be read in conjunction with the annual report for the
year ended 31 March 2024, which has been prepared in accordance
with UK-adopted international accounting standards and the
requirements of the Companies Act 2006, and any public
announcements made by IG Design Group plc during the interim
reporting period.
The preparation of financial
statements that conform with adopted UK IFRS requires the use of
estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and
the reported amounts of income and expense during the reporting
period. Although these estimates are based on management's best
knowledge of the amount, event or actions, actual results may
ultimately differ from those estimates. The estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the
estimate is revised and future periods if relevant.
For the purposes of these
financial statements, 'Design Group' or 'the Group' means IG Design
Group plc ('the Company') and its subsidiaries. IG Design plc is a
company limited by shares, incorporated and domiciled in the UK.
Its registered office is Howard House, Howard Way, Interchange
Park, Newport Pagnell, MK16 9PX. Its shares are listed on the
Alternative Investment Market (AIM).
Seasonality of the
business
The business of the Group is
seasonal and although revenues generally accrue relatively evenly
in both halves of the year, working capital requirements, including
inventory levels, increase steadily in the first half from July and
peak in October as manufacturing of Christmas products builds ahead
of distribution. The second half of the year sees the borrowing of
the Group decline and move to typically a cash positive position as
the Group collects its receivables through January to
March.
Restatement of comparative
amounts
The Group has restated its prior
year figures to reflect the potential liabilities relating to
pre-acquisition era duties, interest, and penalties in a foreign
subsidiary of the DG Americas division. This adjustment has
resulted in a restatement of goodwill, as the initial acquisition
accounting did not include a provision in relation to this
potential liability. Consequently, the 30 September 2023 balance
sheet has been adjusted by $5.8 million to restate the goodwill
(included with in intangible assets) at acquisition and a provision
of $5.5 million (included within current liabilities) has been
raised. In addition, the post-acquisition impact on retained
earnings of $456,000 and on translation reserve of $802,000 have
been adjusted in the statement of changes in equity
accordingly.
Presentation
currency
The presentation and functional
currency of the Group is US dollars. The functional currency of the
Parent Company remains as pound sterling as it is located in the
United Kingdom and substantially all of its cash flows, assets and
liabilities are denominated in pound sterling, as well as its share
capital.
Going
concern
Information regarding the
financial position of the Group, its cash flows, liquidity position
and borrowing facilities are described in the detailed financial
review above. Cash balances and borrowings are detailed in notes 7
and 8.
The Group financial statements have
been prepared on a going concern basis as the Directors have a
reasonable expectation that the Group has adequate resources to
continue trading for a period of at least twelve months from the
date of approval of these financial statements, based on an
assessment of the overall position and future forecasts for the
going concern period. This assessment has also considered the
overall level of Group borrowings and covenant requirements, the
flexibility of the Group to react to changing market conditions and
ability to appropriately manage any business risks.
On 5 June 2023, the business entered
into a new banking facility with HSBC and NatWest bank as part of a
three-year deal to meet the funding requirements of the Group. This
facility comprises an Asset Backed Lending (ABL) arrangement with a
maximum facility amount of $125.0 million. On 3 November 2023 the
Group made an operational amendment to the ABL arrangement and
signed a supplemental agreement to convert and increase the
overdraft to a £17.0 million RCF facility between 17 June 2024 and
16 August 2024. This amendment offered flexibility during the
months where the Group may have had a requirement for funding while
having limited access into the ABL. Cash balances, borrowing and
the financial covenants applicable to the facility are detailed in
notes 7 and 8.
In addition to the above facility,
the Group also increased its unsecured overdraft facility provided
by HSBC to £16.5 million, which reduced to £8.5 million from August
2023. As such, after making appropriate enquires, the Directors do
not see any practical, regulatory or legal restrictions which would
limit their ability to fund the different regions of the business
as required as the Group has sufficient resources.
The Group also has access to
supplier financing arrangements from certain customers which we
utilise at certain times of the year. The largest of these supplier
financing arrangements are subject to the continuing support of the
customers' banking partners and therefore could be withdrawn at
short notice. As the new ABL arrangement is linked to trade
debtors, any withdrawal of these facilities would be largely offset
as the borrowing base under the facility would increase.
The Directors have assessed detailed
plans and forecasts up to 31 March 2026. These forecasts reflect
the fact that the Group has returned to profitability and continues
to grow profitability and margins as a result. They also reflect
the seasonal operating cycle of the business and further
stabilisation associated with the DG Americas plan, following the
decline in performance in the first half of the year.
These forecasts have been sensitised
to reflect severe but plausible adverse downturns in the current
assumptions. Specifically, the severe but plausible downside
scenario has taken account of the following risks:
·
the potential impact of a significant disruption
in one of our major customer's business, reflected in a c$10
million reduction in sales performance and related cash and working
capital impacts; and
·
the potential of further impacts resulting from
the macroeconomic environment and subdued consumer sentiment in DG
Americas, reflected in a c$40 million reduction in sales and with
associated effects on facility headroom.
In the severe but plausible scenario
modelled, there remains sufficient headroom in our forecast
liquidity, and sufficient headroom under the covenant
requirements.
Based on this assessment, the
Directors have formed a judgement that there is a reasonable
expectation the Group will have adequate resources to continue in
operational existence for the foreseeable future.
Significant accounting
policies
The accounting policies adopted in
the preparation of the interim report are consistent with those of
the previous financial year and corresponding interim reporting
period and the adoption of new and amended standards. A
number of new or amended standards became applicable for the
current reporting period. The Group did not have to change
its accounting policies or make retrospective adjustments as a
result of adopting these standards.
2. Segmental information
The Group has one material
business activity, being the design, manufacture and distribution
of various celebration and creative products.
The business operates under two
reporting segments which are reported to, and evaluated by, the
Chief Operating Decision Makers for the Group. The DG Americas
segment includes overseas operations in Asia, Australia, the UK,
India and Mexico, being the overseas entities of US companies. The
DG International segment comprises the consolidation of the
separately owned business in the UK, Asia, Europe and
Australia.
Inter‑segment pricing is determined on an
arm's length basis. Segment results include items directly
attributable to a segment as well as those that can be allocated on
a reasonable basis.
Financial performance of each
segment is measured on adjusted operating profit before management
recharges. Interest and tax are managed on a Group basis and not
split between reportable segments. However, the related financial
liabilities and cash have been allocated out into the reportable
segments as this is how they are managed by the Group.
Segment assets are all non-current
and current assets, excluding deferred tax and income tax, which
are shown in the eliminations column. Inter‑segment receivables and payables are
not included within segmental assets and liabilities as they
eliminate on consolidation.
|
|
|
|
|
|
|
|
|
DG
|
Central
&
|
|
|
|
DG
Americas(a)
|
International
|
eliminations
|
Group
|
|
|
$000
|
$000
|
$000
|
$000
|
|
Six
months ended 30 September 2024
|
|
|
|
|
|
Revenue - external
|
241,765
|
151,304
|
-
|
393,069
|
|
- inter-segment
|
-
|
-
|
-
|
-
|
|
Total segment revenue
|
241,765
|
151,304
|
-
|
393,069
|
|
Segment profit/(loss) before adjusting
items
|
1,654
|
16,928
|
(3,922)
|
14,660
|
|
Adjusting items (note 3)
|
(3,270)
|
(4,341)
|
-
|
(7,611)
|
|
Operating profit/(loss)
|
(1,616)
|
12,587
|
(3,922)
|
7,049
|
|
Finance income
|
|
|
|
605
|
|
Finance costs
|
|
|
|
(1,958)
|
|
Income tax
|
|
|
|
(1,328)
|
|
Profit for the six months ended 30 September
2024
|
|
|
|
4,368
|
|
Balances at 30 September 2024
|
|
|
|
|
|
Segment assets
|
411,186
|
244,920
|
69,147
|
725,253
|
|
Segment liabilities
|
(199,201)
|
(135,263)
|
(10,862)
|
(345,326)
|
|
Capital expenditure
additions
|
|
|
|
|
|
- property, plant and
equipment
|
1,349
|
1,855
|
5
|
3,209
|
|
- intangible assets
|
-
|
6
|
-
|
6
|
|
- right-of-use assets
|
2,228
|
292
|
-
|
2,520
|
|
Depreciation - property, plant and
equipment
|
3,207
|
3,253
|
13
|
6,473
|
|
Amortisation - intangible
assets
|
1,190
|
41
|
-
|
1,231
|
|
Depreciation - right-of-use
assets
|
5,273
|
2,412
|
4
|
7,689
|
|
(Loss)/profit on disposal of
property, plant and equipment
|
(258)
|
12
|
-
|
(246)
|
(a) Including overseas
entities for the DG Americas operating segment.
|
|
|
|
|
|
|
|
|
DG
|
Central
&
|
|
|
|
DG
Americas(a)
|
International
|
eliminations
|
Group
|
|
|
$000
|
$000
|
$000
|
$000
|
|
Six
months ended 30 September 2023
|
|
|
|
|
|
Revenue - external
|
282,392
|
161,658
|
-
|
444,050
|
|
- inter-segment
|
-
|
33
|
(33)
|
-
|
|
Total segment revenue
|
282,392
|
161,691
|
(33)
|
444,050
|
|
Segment profit/(loss) before adjusting
items
|
16,568
|
25,315
|
(3,640)
|
38,243
|
|
Adjusting items (note 3)
|
(742)
|
-
|
-
|
(742)
|
|
Operating profit/(loss)
|
15,826
|
25,315
|
(3,640)
|
37,501
|
|
Finance income
|
|
|
|
235
|
|
Finance costs
|
|
|
|
(3,683)
|
|
Income tax
|
|
|
|
(9,485)
|
|
Profit for the six months ended 30 September
2023
|
|
|
|
24,568
|
|
Balances at 30 September 2023
|
|
|
|
|
|
Segment assets (restated)(b)
|
474,630
|
249,221
|
44,836
|
768,687
|
|
Segment liabilities
(restated)(b)
|
(246,665)
|
(137,278)
|
(28,808)
|
(412,751)
|
|
Capital expenditure
additions
|
|
|
|
|
|
- property, plant and
equipment
|
3,659
|
1,418
|
46
|
5,123
|
|
- intangible assets
|
59
|
34
|
-
|
93
|
|
- right-of-use assets
|
1,207
|
144
|
-
|
1,351
|
|
Depreciation - property, plant and
equipment
|
3,483
|
2,664
|
12
|
6,159
|
|
Amortisation - intangible
assets
|
1,533
|
70
|
-
|
1,603
|
|
Depreciation - right-of-use
assets
|
5,691
|
2,484
|
4
|
8,179
|
|
Reversal of impairment -
right-of-use assets
|
(553)
|
-
|
-
|
(553)
|
|
Profit on disposal of property,
plant and equipment
|
-
|
24
|
-
|
24
|
(a) Including overseas
entities for the DG Americas operating segment.
(b) Restated - see note 1 for
further details.
|
|
|
|
|
|
|
|
|
DG
|
Central
&
|
|
|
|
DG
Americas(a)
|
International
|
eliminations
|
Group
|
|
|
$000
|
$000
|
$000
|
$000
|
|
Year ended 31 March 2024
|
|
|
|
|
|
Revenue - external
|
500,310
|
299,741
|
-
|
800,051
|
|
- inter-segment
|
-
|
33
|
(33)
|
-
|
|
Total segment revenue
|
500,310
|
299,774
|
(33)
|
800,051
|
|
Segment profit/(loss) before adjusting
items
|
6,768
|
32,257
|
(7,927)
|
31,098
|
|
Adjusting items (note 3)
|
(1,892)
|
(210)
|
-
|
(2,102)
|
|
Operating profit/(loss)
|
4,876
|
32,047
|
(7,927)
|
28,996
|
|
Finance income
|
|
|
|
1,065
|
|
Finance costs
|
|
|
|
(6,219)
|
|
Income tax
|
|
|
|
13,277
|
|
Loss for the year ended 31 March 2024
|
|
|
|
37,119
|
|
Balances at 31 March 2024
|
|
|
|
|
|
Segment assets
|
353,706
|
194,348
|
113,289
|
661,343
|
|
Segment liabilities
|
(138,722)
|
(78,443)
|
(74,691)
|
(291,856)
|
|
Capital expenditure
additions
|
|
|
|
|
|
- property, plant and
equipment
|
5,483
|
6,327
|
53
|
11,863
|
|
- property, plant and equipment on
acquisition of business
|
-
|
84
|
-
|
84
|
|
- intangible assets
|
390
|
52
|
-
|
442
|
|
- intangible assets on acquisition
of business
|
-
|
278
|
-
|
278
|
|
- right-of-use assets
|
4,389
|
2,224
|
-
|
6,613
|
|
Depreciation - property, plant and
equipment
|
6,776
|
5,526
|
24
|
12,326
|
|
Amortisation - intangible
assets
|
2,897
|
135
|
-
|
3,032
|
|
Depreciation - right-of-use
assets
|
11,525
|
4,938
|
7
|
16,470
|
|
Reversal of impairment -
right-of-use assets
|
(553)
|
-
|
-
|
(553)
|
|
(Loss)/profit on disposal of
property, plant and equipment
|
(279)
|
41
|
-
|
(238)
|
(a) Including overseas
entities for the DG Americas operating segment.
Total administration expenses are
$37.4 million (HY2024: $33.9 million; FY2024: $70.0 million), which
includes $0.8 million (HY2024: nil, FY2024: nil) loss on
re-measurement of assets held for sale (see note 3 for further
details).
3.
Operating profit and adjusting items
|
|
Unaudited
|
Unaudited
|
Twelve
|
|
|
six months
|
six
months
|
months
|
|
|
ended
|
ended
|
ended
|
|
|
30 Sep
2024
|
30 Sep
2023
|
31 Mar
2024
|
|
|
$000
|
$000
|
$000
|
|
Operating profit analysed
as:
|
|
|
|
|
Adjusted operating profit
|
14,660
|
38,243
|
31,098
|
|
Adjusting items
|
(7,611)
|
(742)
|
(2,102)
|
|
Operating profit
|
7,049
|
37,501
|
28,996
|
Adjusting
items
|
|
|
|
|
|
Profit on
|
|
|
|
|
Selling
|
Admin
|
Other
|
disposal
of
|
|
|
|
Cost of
|
expenses
|
expenses
|
operating
|
property,
plant
|
|
|
Six
months ended
|
sales
|
- costs
|
- costs
|
income
|
and
equipment
|
Total
|
|
30
September 2024
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
|
Acquisition integration and
restructuring costs(1)
|
2,197
|
876
|
3,603
|
-
|
33
|
6,709
|
|
Amortisation of acquired
intangibles(2)
|
-
|
-
|
902
|
-
|
-
|
902
|
|
Adjusting items
|
2,197
|
876
|
4,505
|
-
|
33
|
7,611
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
on
|
|
|
|
|
Selling
|
Admin
|
Other
|
disposal
of
|
|
|
|
Cost
of
|
expenses
|
expenses
|
operating
|
property, plant
|
|
|
Six
months ended
|
sales
|
-
costs
|
-
costs
|
income
|
and
equipment
|
Total
|
|
30
September 2023
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
|
Acquisition integration and
restructuring costs/(income)(1)
|
394
|
-
|
(554)
|
-
|
-
|
(160)
|
|
Amortisation of acquired
intangibles(2)
|
-
|
-
|
902
|
-
|
-
|
902
|
|
Adjusting items
|
394
|
-
|
348
|
-
|
-
|
742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
on
|
|
|
|
|
Selling
|
Admin
|
Other
|
disposal
of
|
|
|
|
Cost
of
|
expenses
|
expenses
|
operating
|
property, plant
|
|
|
Year ended
|
sales
|
-
costs
|
-
costs
|
income
|
and
equipment
|
Total
|
|
31
March 2024
|
$000
|
$000
|
$000
|
$000
|
$000
|
$000
|
|
Acquisition integration and
restructuring costs/(income)(1)
|
548
|
-
|
(249)
|
-
|
-
|
299
|
|
Amortisation of acquired
intangibles(2)
|
-
|
-
|
1,803
|
-
|
-
|
1,803
|
|
Adjusting items
|
548
|
-
|
1,554
|
-
|
-
|
2,102
|
Adjusting items are separately
presented by virtue of their nature, size and/or incidence (per
each operating segment). These items are material items of an
unusual or non-recurring nature which represent gains or losses and
are presented to allow for the review of the performance of the
business in a consistent manner and in line with how the business
is managed and measured on a day-to-day basis and allow the reader
to obtain a clearer understanding of the underlying results of the
ongoing Group's operations. They are typically gains or costs
associated with events that are not considered to form part of the
core operations, or are considered to be a 'non-recurring' event
(although they may span several accounting periods).
These (gains)/losses are broken
down as follows:
(1) Acquisition integration and restructuring costs -
$6.7 million (HY2024: $0.2 million income)
In order to realise synergies from
acquisitions, or existing businesses, integration and restructuring
projects are respectively undertaken that aim to deliver future
savings and efficiencies for the Group. These are projects outside
of the normal operations of the business and typically incur
one-time costs to ensure successful implementation. As such it is
appropriate that costs associated with projects of this nature be
included as adjusting items. The costs incurred in HY2025 relate to
the restructuring of DG Americas and DG UK (and its subsidiary in
Asia) businesses:
DG Americas business reorganisation
- $2.4 million (HY2024: $0.4 million): In the
period ended 30 September 2024 further restructuring costs,
relating to staff, of $2.2 million have been recognised in DG
Americas. In addition, a further $0.2 million of costs have
been incurred in relation to a warehouse consolidation project,
effecting warehouses in South Centre and Hagerstown. (HY2024: $0.4
million).
China site closure - $4.3
million (HY2024: $nil): Following the announcement in June 2024 of
the closure of Huizhou Gift International Greetings Co Ltd a
subsidiary of DG UK, the business has incurred $4.3 million of
restructuring costs in the period ended 30 September 2024. Of this
$4.3 million, $3.0 million relates to staff costs, $0.8 million
relates to asset write-downs, and $0.5m relates to other closure
costs. The asset write-down resulted from assets classified as held
for sale during the period being measured at the lower of their
carrying amount and fair value less costs to sell at the time of
reclassification. This is a level 2 measurement as per the fair
value hierarchy set out in note 10. These are not considered
operational costs relating to the running of the business and are
directly related to the accounting for the closure.
Reversal of impairment - $nil
(HY2024: $0.6 million credit: Following the integration of DG
Americas' sites in FY2021, a portion of a leased site in Budd Lake,
New Jersey was exited, and the right-of-use asset was impaired. In
the period ended 31 March 2024, the landlord reacquired a portion
of the impaired site resulting in a reversal of impairment in
HY2024 of $0.6 million.
(2) Amortisation of acquired intangibles - $0.9
million charge (HY2024 $0.9 million)
Under IFRS, as part of the
acquisition of a company, it is necessary to identify intangible
assets such as customer lists and brands which form part of the
intangible value of the acquired business, but which are not part
of the acquired balance sheet. These intangible assets are then
amortised to the income statement over their useful economic lives.
These are not considered operational costs relating to the running
of the acquired business and are directly related to the accounting
for the acquisition. These include brands acquired as part of the
acquisition of Impact Innovations Inc.
The cash flow effect of
adjusting items
There was a $4.7 million net
outflow in the current period's cash flow (HY2024: $1.8 million,
FY2024: $2.1 million) relating to adjusting items which included
$249,000 outflow (HY2023: $1.4 million, FY2024: $1.5 million)
deferred from prior years.
4.
Share based payments charges
The total expense recognised for the
period arising from equity-settled share-based payments is as
follows:
|
|
|
|
|
|
|
Unaudited
|
Unaudited
|
Twelve
|
|
|
six months
|
six
months
|
months
|
|
|
ended
|
ended
|
ended
|
|
|
30 Sep
2024
|
30 Sep
2023
|
31 Mar
2024
|
|
|
$000
|
$000
|
$000
|
|
Charge in relation to the 2022-2025
LTIP scheme
|
249
|
452
|
778
|
|
Charge in relation to the 2023-2026
LTIP scheme
|
287
|
147
|
654
|
|
Charge in relation to the 2024-2027
LTIP scheme
|
104
|
-
|
-
|
|
Equity-settled share-based payments
charge
|
640
|
599
|
1,432
|
|
Social security charge
|
85
|
31
|
70
|
|
Total equity-settled share-based payments
charge
|
725
|
630
|
1,502
|
In August 2024, the 2024-2027 LTIP
scheme was granted. The 2024-2027 LTIP scheme is subject to certain
performance criteria being achieved during a three-year period:
relative Total Shareholder Return versus FTSE SmallCap (excluding
Investment Trusts) constituents; and EPS growth, with an 'underpin'
condition to reduce vesting levels if unwarranted 'windfall gains'
from share price movements arise. There is a two-year holding
period for certain individuals.
5.
Other operating income
|
|
Unaudited
|
Unaudited
|
Twelve
|
|
|
six months
|
six
months
|
months
|
|
|
ended
|
ended
|
ended
|
|
|
30 Sep
2024
|
30 Sep
2023
|
31 Mar
2024
|
|
|
$000
|
$000
|
$000
|
|
Grant income received
|
117
|
105
|
211
|
|
Sub-lease rental income
|
232
|
352
|
687
|
|
Other
|
89
|
65
|
1,005
|
|
Total other operating income
|
438
|
522
|
1,903
|
6.
Taxation
Recognised in the income
statement
|
|
Unaudited
|
Unaudited
|
Twelve
|
|
|
six months
|
six
months
|
months
|
|
|
ended
|
ended
|
ended
|
|
|
30 Sep
2024
|
30 Sep
2023
|
31 Mar
2024
|
|
|
$000
|
$000
|
$000
|
|
Current tax charge
|
|
|
|
|
Current income tax charge
|
1,185
|
6,351
|
10,531
|
|
Deferred tax charge/(credit)
|
|
|
|
|
Origination and reversal of
temporary differences
|
143
|
3,134
|
(23,808)
|
|
Total tax in the income statement
|
1,328
|
9,485
|
(13,277)
|
|
Total tax charge/(credit) on adjusting
items
|
|
|
|
|
Total tax on profit before adjusting
items
|
2,161
|
9,670
|
8,528
|
|
Total tax on adjusting
items
|
(833)
|
(185)
|
(21,805)
|
|
Total tax charge/(credit) in the income
statement
|
1,328
|
9,485
|
(13,277)
|
The tax expense has been
calculated by applying the effective rate of tax which is expected
to apply for the year ended 31 March 2025 by jurisdiction, using
rates substantively enacted by 30 September 2024. The income tax
expense is recognised based on management's estimate of the
weighted average effective annual income tax rate expected for the
full financial year. The estimated average annual tax rate used for
the period to 30 September 2024 was 23.3% (HY2024: 27.9%). The
changes in profit mix across the various territories as well as the
changes across territories in the H1/H2 split are the main drivers
that impact the effective tax rate. The tax effect of adjusting
items are recognised in the same period as the relevant adjusting
item.
The deferred tax assets in the UK
continue not to be recognised based on the assessment of future
taxable profits against which the asset could unwind.
OECD Pillar
Two
On 20 June 2023, the Finance (No.2)
Act 2023 was enacted in the UK, including legislation to implement
the OECD Pillar Two
income taxes and will come into
effect from 1 April 2024. This UK legislation includes an income
inclusion rule, which is designed to ensure a minimum effective tax
rate of 15% in each country in which the Group operates (Pillar Two
income taxes). Similar legislation is being enacted by other
governments around the world. The Group is within the scope of this
legislation. The Group has applied the mandatory temporary
exception in the Amendments to IAS 12 issued in May 2023 and
endorsed in July 2023, and has not recognised or disclosed
information about deferred tax assets or liabilities relating to
Pillar Two income taxes.
Based on an assessment of the data
for the year ended 31 March 2023 undertaken at 31 March 2024 year
end, the Group has a qualifying Country by Country report (CbCR)
and all territories have passed the transitional safe harbours. The
Group also expects to have qualifying CbCR reports for the
subsequent years for which the transitional safe harbours are
available and therefore has the opportunity for each year to
potentially meet the transitional safe harbours. Based on an
initial assessment of the provisional data for the year ended 31
March 2024, as well as the forecast data, we do not expect the
impact of Pillar Two income taxes to be material for the year ended
31 March 2025 and therefore has not been included in the ETR
calculation for the period ended 30 September 2024.
7.
Cash and cash equivalents/bank overdrafts
|
|
Unaudited
|
Unaudited
|
Twelve
|
|
|
six months
|
six
months
|
months
|
|
|
ended
|
ended
|
ended
|
|
|
30 Sep
2024
|
30 Sep
2023
|
31 Mar
2024
|
|
|
$000
|
$000
|
$000
|
|
Cash and cash equivalents
|
48,827
|
71,566
|
157,365
|
|
Bank overdrafts
|
(40,677)
|
(64,261)
|
(63,655)
|
|
Cash and cash equivalents and bank overdrafts per cash flow
statement
|
8,150
|
7,305
|
93,710
|
Net cash/(net
debt)
|
|
Unaudited
|
Unaudited
|
Twelve
|
|
|
six months
|
six
months
|
months
|
|
|
ended
|
ended
|
ended
|
|
|
30 Sep
2024
|
30 Sep
2023
|
31 Mar
2024
|
|
|
$000
|
$000
|
$000
|
|
Cash and cash equivalents
|
8,150
|
7,305
|
93,710
|
|
Bank loans
|
(2,000)
|
(24,000)
|
-
|
|
Loan arrangement fees
|
1,238
|
1,608
|
1,517
|
|
Net
cash/(debt) as used in the financial review cash flow
statement
|
7,388
|
(15,087)
|
95,227
|
The bank loans and overdrafts are
secured by a fixed charge on certain of the Group's land and
buildings, a fixed charge on certain of the Group's book debts and
a floating charge on certain of the Group's other assets. See note
8 for further details of the Group's loans and
borrowings.
8.
Loans and borrowings
This note provides information about
the contractual terms of the Group's interest-bearing loans and
borrowings.
|
|
Unaudited
|
Unaudited
|
Twelve
|
|
|
six months
|
six
months
|
months
|
|
|
ended
|
ended
|
ended
|
|
|
30 Sep
2024
|
30 Sep
2023
|
31 Mar
2024
|
|
|
$000
|
$000
|
$000
|
|
Non-current liabilities
|
|
|
|
|
Loan arrangement fees
|
(495)
|
(1,005)
|
(817)
|
|
|
(495)
|
(1,005)
|
(817)
|
|
Current liabilities
|
|
|
|
|
Asset backed loan
|
2,000
|
24,000
|
-
|
|
Bank loans and borrowings
|
2,000
|
24,000
|
-
|
|
Loan arrangement fees
|
(743)
|
(603)
|
(700)
|
|
|
1,257
|
23,397
|
(700)
|
Secured bank
loans
Facilities utilised in current period
The Group entered into a new banking
facility on 5 June 2023, this facility comprises an Asset Backed
Lending ("ABL") arrangement with a maximum facility amount of
$125.0 million. The facility with HSBC and NatWest banks has a term
of three years. On 3 November 2023 the Group made an operational
amendment to the ABL arrangement and signed a supplemental
agreement to convert and increase the overdraft to a £17.0 million
RCF facility between 17 June 2024 and 16 August 2024. This
amendment did not increase the maximum facility amount and offered
flexibility during the months where the Group had a requirement for
funding while having limited access into the ABL.
The Group also increased its
unsecured overdraft facility provided by HSBC to £16.5 million,
which reduced to £8.5 million from August 2023.
Interest charged on the Asset Backed
lending facility is based, on one of two methods dependant on the
duration of the Group's borrowing request submission:
· a
margin of between 1.75% and 2.25%, based on average excess
availability, plus a 0.1% credit spread adjustment, plus the US
Secured Overnight Financing Rate ("SOFR"); or
· a
margin of between 0.75% and 1.25% based on average excess
availability, plus a rate based on the higher of: the HSBC prime
rate, the Federal Funds rate plus 0.5%, or SOFR plus 1%.
A further commitment/non-utilisation
fee is charged at 0.25% where facility usage is greater than 50% of
the maximum credit line and 0.375% where facility usage is less
than 50% of the maximum credit line.
Interest on the RCF would have been
charged at a margin of 2.5% plus Sterling Overnight Index Average
("SONIA").
The financial covenant within the
ABL agreement, which is a minimum fixed charge coverage ratio of
1.0 times, is only triggered if the remaining availability of the
facility is less than the higher of $12.5 million or 12.5% of
the borrowing base. The amendment to the facility on 3 November
2023, reduced the remaining availability trigger point to $6.5
million over the two month period.
The financial covenants within
the RCF agreement were as follows:
· a
minimum fixed charge coverage ratio of 1.0 times, calculated for
the 12 month period to the most recent quarterly reporting period;
and
· an
asset cover ratio of no less than 200% calculated as at the date of
the last monthly reporting period.
The ABL (and RCF for the period it
was in operation) is secured with an all-assets lien on all
existing and future assets of the loan parties. The loan parties
are Anker Play Products, LLC, Berwick Offray, LLC, BOC
Distribution, Inc., C. R. Gibson, LLC, CSS Industries, Inc., IG
Design Group (Lang), Inc., IG Design Group Americas, Inc., IG
Design Group plc, IG Design Group UK Limited, Impact Innovations,
Inc., Lion Ribbon Company, LLC, Paper Magic Group, Inc.,
Philadelphia Industries, Inc., Simplicity Creative Corp., The Lang
Companies, Inc., The McCall Pattern Company, Inc.
Invoice financing arrangements are
secured over the trade receivables that they are drawn
on.
Loan arrangement fees represent the
unamortised costs in arranging the Group facilities. These fees are
being amortised on a straight-line basis over the terms of the
facilities.
The Group is party to supplier
financing arrangements with a number of its key customers and the
associated balances are recognised as trade receivables until
receipt of the payment from the bank, at which point the receivable
is derecognised.
9.
Earnings per share
|
|
Unaudited
|
Unaudited
|
Twelve
|
|
|
six months
|
six
months
|
months
|
|
|
ended
|
ended(a)
|
ended
|
|
|
30 Sep
2024
|
30 Sep
2023
|
31 Mar
2024
|
|
|
$000
|
$000
|
$000
|
|
Earnings
|
|
|
|
|
Earnings attributable to equity
holders of the Company
|
3,974
|
23,911
|
35,625
|
|
Adjustments
|
|
|
|
|
Adjusting items (net of
non-controlling interest effect)
|
7,611
|
742
|
2,102
|
|
Tax relief on adjustments (net of
non-controlling interest effect)
|
(833)
|
(185)
|
(21,805)
|
|
Adjusted earnings attributable to equity holders of the
Company
|
10,752
|
24,468
|
15,922
|
|
|
|
|
|
|
|
Unaudited
|
Unaudited
|
Twelve
|
|
|
six months
|
six
months
|
months
|
|
|
ended
|
ended
|
ended
|
|
In thousands of shares
|
30 Sep
2024
|
30 Sep
2023
|
31 Mar
2024
|
|
Issued ordinary shares at 1
April
|
98,279
|
97,993
|
97,994
|
|
Shares relating to share
options
|
28
|
315
|
314
|
|
Less: shares held by Employee
Benefit Trust
|
(3,028)
|
(1,031)
|
(1,457)
|
|
Weighted average number of shares for the purposes of
calculating basic EPS
|
95,279
|
97,277
|
96,851
|
|
Effect of dilutive potential shares
- share awards
|
1,049
|
658
|
563
|
|
Weighted average number of shares for the purposes of
calculating diluted EPS
|
96,328
|
97,935
|
97,414
|
|
|
|
|
|
|
|
Unaudited
|
Unaudited
|
Twelve
|
|
|
six months
|
six
months
|
months
|
|
|
ended
|
ended
|
ended
|
|
|
30 Sep
2024
|
30 Sep
2023
|
31 Mar
2024
|
|
|
Cents
|
Cents
|
Cents
|
|
Earnings per share
|
|
|
|
|
Basic earnings per share
|
4.2
|
24.6
|
36.8
|
|
Impact of adjusting items (net of
tax)
|
7.1
|
0.6
|
(20.3)
|
|
Basic adjusted earnings per share
|
11.3
|
25.2
|
16.5
|
|
Diluted earnings per
share
|
4.1
|
24.4
|
36.6
|
|
Diluted adjusted earnings per share
|
11.2
|
25.0
|
16.3
|
Adjusted earnings per share is
provided to reflect the underlying earnings performance of the
Group.
Basic earnings per
share
Basic EPS is calculated by
dividing the profit for the period attributable to ordinary
shareholders by the weighted average number of shares outstanding
during the period, excluding own shares held by the Employee
Benefit Trust.
Diluted earnings per
share
Diluted EPS is calculated by
dividing the profits for the period attributable to ordinary
shareholdings by the weighted average number of shares outstanding
during the period, excluding own shares held by the Employee
Benefit Trust, plus the weighted average number of ordinary shares
that would be issued on the conversion of the potentially dilutive
shares.
10. Financial instruments
Derivative financial
instruments
The fair value of forward exchange
contracts is assessed using valuation models taking into account
market inputs such as foreign exchange spot and forward rates,
yield curves and forward interest rates.
Fair value
hierarchy
Financial instruments and certain
assets held for sale have been recognised at fair value subsequent
to initial recognition are grouped into Levels 1 to 3 based on the
degree to which the fair value is observable. The three levels are
defined as follows:
· Level
1: quoted (unadjusted) prices in active markets for identical
assets or liabilities;
· Level
2: other techniques for which all inputs which have a significant
effect on the recorded fair value are observable,
either directly or indirectly; and
· Level
3: techniques which use inputs which have a significant effect on
the recorded fair value that are not based on observable market
data.
All other financial assets and
liabilities are measured at amortised cost.
The Group held the following
financial instruments at 30 September 2024, which were measured at
Level 2 fair value subsequent to initial recognition:
|
|
Unaudited
|
Unaudited
|
Twelve
|
|
|
six months
|
six
months
|
months
|
|
|
ended
|
ended
|
ended
|
|
|
30 Sep
2024
|
30 Sep
2023
|
31 Mar
2024
|
|
Forward exchange contracts carrying
amount
|
$000
|
$000
|
$000
|
|
Derivative financial
assets
|
403
|
664
|
68
|
|
Derivative financial
liabilities
|
(319)
|
(876)
|
(26)
|
The Group has forward currency
hedging contracts outstanding at 30 September 2024 designated as
hedges of expected future purchases in US dollars for which the
Group has firm commitments, as the derivatives are based on
forecasts and an economic relationship exists at the time the
derivative contracts are taken out. The terms of the forward
currency hedging contracts have been negotiated to match the terms
of the commitments.
The Group had assets held for sale
at 30 September 2024 of $855,000 (HY2024 $nil), which were measured
at Level 2 fair value.
11. Capital commitments
At 30 September 2024, the Group
had outstanding authorised capital commitments to purchase plant
and equipment for $4.9 million (HY2024: $4.0 million). At 30
September 2024, the Group has estimated lease commitments for
leases not yet commenced of $18.6 million (HY2024: $16.7
million).
12. Related parties
As at 30 September 2024, there are
no changes to the related parties or types of transactions as
disclosed at 31 March 2024.
13. Non-adjusting post balance sheet events
There were no known material
non-adjusting events which occurred between the end of the
reporting period and prior to the authorisation of this interim
report.
Independent review report to IG Design Group
plc
Report on the condensed consolidated interim financial
statements
Our
conclusion
We have reviewed IG Design Group
plc's condensed consolidated interim financial statements (the
"interim financial statements") for the 6 month period ended 30
September 2024 (the "period").
Based on our review, nothing has
come to our attention that causes us to believe that the interim
financial statements are not prepared, in all material respects, in
accordance with UK adopted International Accounting Standard 34,
'Interim Financial Reporting' and the AIM Rules for
Companies.
The interim financial statements
comprise:
•
the Condensed Consolidated Balance Sheet as at 30
September 2024;
•
the Condensed Consolidated Income Statement and
Condensed Consolidated Statement of Comprehensive Income for the
period then ended;
•
the Condensed Consolidated Cash Flow Statement
for the period then ended;
•
the Condensed Consolidated Statement of Changes
in Equity for the period then ended; and
•
the explanatory notes to the interim financial
statements.
The interim financial statements
have been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the AIM
Rules for Companies.
Basis for conclusion
We conducted our review in
accordance with International Standard on Review Engagements (UK)
2410, 'Review of Interim Financial Information Performed by the
Independent Auditor of the Entity' issued by the Financial
Reporting Council for use in the United Kingdom ("ISRE (UK) 2410").
A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures.
A review is substantially less in
scope than an audit conducted in accordance with International
Standards on Auditing (UK) and, consequently, does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusions relating to going concern
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors
have inappropriately adopted the going concern basis of accounting
or that the directors have identified material uncertainties
relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410. However, future events or
conditions may cause the group to cease to continue as a going
concern.
Responsibilities for the interim financial statements and the
review
Our
responsibilities and those of the directors
The interim financial statements are
the responsibility of, and have been approved by the directors. The
directors are responsible for preparing the interim financial
statements in accordance with the AIM Rules for Companies which
require that the financial information must be presented and
prepared in a form consistent with that which will be adopted in
the company's annual financial statements. In preparing the interim
financial statements, the directors are responsible for assessing
the group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the group or to cease operations, or have no realistic
alternative but to do so.
Our responsibility is to express a
conclusion on the interim financial statements based on our review.
Our conclusion, including our Conclusions relating to going
concern, is based on procedures that are less extensive than audit
procedures, as described in the Basis for conclusion paragraph of
this report. This report, including the conclusion, has been
prepared for and only for the company for the purpose of complying
with the AIM Rules for Companies and for no other purpose. We do
not, in giving this conclusion, accept or assume responsibility for
any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
PricewaterhouseCoopers
LLP
Chartered Accountants
Milton Keynes
25 November 2024
REGISTERED OFFICE
Howard House
Howard Way
Interchange Park
Newport Pagnell MK16 9PX
IG Design Group plc
is registered in
England and Wales,
number 1401155
Visit us online at
thedesigngroup.com
ADVISERS
Financial and nominated
adviser and broker
Canaccord Genuity
Limited
88 Wood Street
London EC2V 7QR
Independent auditors
PricewaterhouseCoopers
LLP
Exchange House
Central Business Exchange
Midsummer Boulevard
Central Milton Keynes
MK9 2DF
Public relations
Alma Strategic
Communications
71-73 Carter Lane
London EC4V 5EQ
Share registrar
Link Group
Central Square
29 Wellington Street
Leeds LS1 4DL
By phone:
UK - 0371 664 0300
Calls are charged at the standard
geographic rate and will vary by provider. Calls made outside the
United Kingdom will be charged at the applicable international
rate. Lines are open between 9.00 - 17.30, Monday to Friday
excluding public holidays in England and Wales.
By email: enquiries@linkgroup.co.uk