The Pebble Gro. Regulatory News (PEBB)

26 November 2020

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

THE PEBBLE GROUP PLC

("The Pebble Group," the "Company" or the "Group")

AIM: PEBB

TRADING UPDATE

The Board of The Pebble Group, a leading provider of technology, services and products to the global promotional products industry, is pleased to announce that the Company is firmly on track to deliver results for the year ending 31 December 2020 ("FY 20") in line with market expectations and provides an update on the progress that has been made since the announcement of the Group's Half Year Results, on 16 September 2020.

Business update

Facilisgroup

Facilisgroup provides an ecommerce platform to mid-size Promotional Products businesses in North America, which enables those businesses to benefit from significant business efficiency through its technology and gain meaningful supply chain advantage from the ability to purchase from quality suppliers under preferred terms.

The business has performed robustly throughout the COVID-19 pandemic. Its Partners (customers) have increased to 169, up from 149 at 31 December 2019, with a further six contracted and awaiting implementation. The success of this business model is reflected in the near 100% Partner retention rate, which has been maintained since COVID-19 impacted in March 2020.

The Gross Merchandise Value (sales order value) processed by Partners through the Facilisgroup technology platform is expected to be circa $1bn in 2020, making Facilisgroup a major consolidator in the promotional products industry. Sales order patterns of Partners are returning to pre-pandemic average order values and order numbers, in contrast to Q2 20 which included large PPE sales. We see this as encouraging for the prospects of our Partners and the promotional products industry in 2021.

We continue to invest in Facilisgroup to further improve its valued services to Partners and Preferred Suppliers and are increasingly positive about the business' prospects.

Brand Addition

Brand Addition provides promotional products and related services under contract to some of the world's most recognisable brands. Its largest contracts are valued in the millions of pounds with the products and services supplied being used for brand building, customer engagement and employee rewards.

Sales order patterns have continued to improve since our last update in September. The two major new clients, secured in Q1 20, have been successfully launched and are beginning to contribute to FY 20 revenue with a material contribution expected in 2021. To date in H2 20, sales orders have averaged above 70% of the prior year, with current activity indicating positive momentum into 2021. We believe this demonstrates the inherent strength of our clients' businesses and their appetite for our products and services. Client retention has remained strong with all major clients that entered the COVID-19 affected period in March 2020 continuing to be clients today.

Environmental, Social and Governance (ESG) considerations are an increasingly important factor in the decision-making process of our global clients. Brand Addition continues to focus on differentiating itself by placing ESG at the core of its strategy. In October 2020, Brand Addition achieved a Platinum Rating from EcoVardis, the sustainability ratings provider, meaning Brand Addition is recognised by EcoVardis as being in the top 1% of companies for sustainability in its sector.

To further advance our ESG commitment the Group has appointed a General Counsel and Company Secretary and is in the process of recruiting a Senior ESG Officer.

Balance sheet and cash

The Group's balance sheet remains strong with the working capital requirement reducing in Q4 20 through the normal annual cycle, as expected. At 25 November 2020, the Group had cash balances of £6.7m, including £1.2m drawdown from the Company's £10.0m committed revolving credit facility. This is after the repayment of £6.5m from the facility in the period since our last update. At the year end, 31 December 2020, we expect to have repaid all amounts from the facility and the cash balance to be similar to the prior year cash position of £8.9m. This is after settlement of £2.4m of IPO costs included in the prior year cash balance.

Outlook

Facilisgroup continues to deliver in line with expectations and we are actively seeking opportunities to build on this success by strengthening its services organically and through acquisition.

The current trend in order patterns of Brand Addition's blue-chip client base gives us real confidence as we approach 2021.

Coupled with a strong balance sheet and the long-term nature of our Partner and client relationships, we are confident in managing the Group responsibly through the current volatility, meeting market expectations for FY 20 and continuing to deliver on the Group's strategy in FY 21 and beyond.

Enquiries

About The Pebble Group plc - www.thepebblegroup.com 

The Pebble Group is a provider of technology, services and products to the global promotional products industry, comprising two differentiated businesses, focused on specific areas of the promotional products market:

Brand Addition - www.brandaddition.com 

The Group's promotional product merchandise business, Brand Addition, is a leading provider of promotional products to global brands. Brand Addition utilises its global network to source and deliver complex and creative promotional product solutions to support the marketing efforts of its multi-national clients, who operate in sectors which include health & beauty, fast moving consumer goods, transport, technology, banking & finance and charity. Brand Addition's clients primarily comprise major global brands under contract.

Facilisgroup - www.facilisgroup.com

The Group's SaaS business, Facilisgroup, provides subscription-based services to SME promotional product distributors (Partners) in the United States and Canada. Facilisgroup's suite of services includes business intelligence software, buying power and community events. Through its @ease proprietary software, Facilisgroup offers a SaaS technology platform that enables its network of Partners to improve order management, CRM and sales analysis and reporting. Facilisgroup also provides its Partners with access on favourable terms to a selected group of preferred suppliers, by consolidating the purchasing power of its Partners. This attracts rebates from suppliers, who in turn benefit from efficient access to a network of high-quality distributors.