IG Design Group PLC - Milton Keynes, Bedfordshire-based consumer gift packaging - Guides annual earnings to be "significantly below current market expectations" due to supply challenges. Also posts interim revenue growth less than forecast. Revenue is up 11% on a like-for-like basis on a year prior in the six months that ended September 30. Revenue is up 5% on proforma revenue, including IG Design's CSS Industries Inc purchase prior to ownership, from two years before. Revenue growth is attributed to a pickup in sales across both its Americas and International divisions. However the positive top-line performance is being offset by challenging cost headwinds, IG Design states.
In addition to logistical disruption within its supply chain, IG Design says it is experiencing worsening cost headwinds, with sea freight costs up significantly across all regions, alongside raw material and labour inflation, as well as supply availability issues. The business has responded quickly to mitigate much of the impact of these challenges, IG claims.
Due to disruption and cost increases, operating margins in the first half have been harmed, IG Design says, and it expects supply challenges to continue into the second half. Financial year 2022 operating margins are expected to be 175 to 225 basis points lower than the year before, resulting in an earnings drop.
Current stock price: 296.00 pence, down 33% on Tuesday
Year-to-date change: down 54%
By Will Paige; willpaige@alliancenews.com
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Design Group (IGR)