International Greetings profit falls, margins improve

- Half-year profit shrinks- Margins improve- Robust order book for the full year 2013/14Gift packaging, stationery and gifts group International Greetings said sales and profit for the six months to the end of September deteriorated while margins improved. The group, which sells over 2bn feet of gift wrap annually and trades with over 80 countries, said pre-tax profit fell to £1.7m in the six month period from £2.5m a year earlier after exceptional costs of £1.8m for its new investment in Wales.Sales slipped to £113.6m from £115.2m in 2012, reflecting the phasing of deliveries to customer, which should result in a busier second half. It said trading was overall in line with expectations as trading improved in the UK and Europe and amid stronger orders from the US. Gross margin improved to 19.0% from 18.4% a year earlier. Operating profit before exceptional items rose £0.1m to £5.3m. Profit before tax and exceptional climbed 7.9% to £3.5m. Chief Executive Paul Fineman said: "The first half of the year has seen a number of positive operational developments across the group and we are pleased to report that all regions traded profitably during the period, with notable improved performance in the UK and Europe and a strong order book in the US. "We are particularly pleased to note the record levels of gift wrap production and profitable sales growth in Europe following the investment in our new, high definition printing facilities. This bodes well for the recently commenced project to bring similar technology to our gift wrap plant in Wales. This exciting initiative is on track and on budget to be operational in the Spring of 2014." The group said it has a robust order book for the full year 2013/14, in line with expectations. Its debt reduction programme remains on track with net debt level at £84.8m compared to £84.6m, including the capital investment in Wales.CJ