Last checked at 27 Oct 2022 07:00
27 October 2022
Inspecs Group plc
("Inspecs" or "the Group")
Trading Update and Board Changes
Inspecs Group plc, a global eyewear and lens design house and manufacturer, today announces a trading update for the 9 months to 30 September 2022 (the "Period") and provides a full year outlook.
On a constant currency basis, the Group has seen sales growth across Europe, UK and the US during the Period, as well as in the Group's manufacturing businesses in Vietnam and China. As set out in the Group's Interim Results, this growth has been impacted by unfavourable foreign exchange movements, particularly with the Euro weakening against the US dollar. Revenue for the Period in both reported and constant currency is set out below:
Revenue: reported currency US$m | 9 months to 30-Sept-22 | 9 months to 30-Sept-21 | Change |
Group | 179.4 | 185.0 | -3.0% |
Acquisitions during December 2021 | 10.8 | - | - |
Total | 190.2 | 185.0 | +2.8% |
Revenue: constant currency1: US$m | 9 months to 30-Sept-22 | 9 months to 30-Sept-21 | Change |
Group | 191.8 | 185.0 | +3.7% |
Acquisitions during December 2021 | 11.2 | - | - |
Total | 203.0 | 185.0 | +9.8% |
1 | Constant exchange rates: figures at constant exchange rates have been calculated using the average exchange rates in effect for the relevant comparative period. |
In Europe, in particular Germany, both the macro-economic climate and consumer confidence have deteriorated sharply since September 2022. German consumer confidence is now at a 25-year low and this is reflected in the order intake that is significantly down on the previous year. The Group's expectation is that the German and French markets will remain weak into the first half of 2023.
In the US, the order book remains at a similar level to the prior year whilst in the UK, the Group's frame business has shown growth on the previous year. The Group's Vietnamese and Chinese manufacturing business, which is affected by the European market, has seen a decrease in its order book. Overall, the Group order book is down 13% at 30-Sept-22 on the previous year.
Due to the reduced order book, the Board has decided to delay the expansion of the existing Vietnamese factory and the investment in a new factory in Portugal until at least Q3 2023.
As set out in the Group's Interim Results, it took longer than expected to complete Norville's new state-of-the-art manufacturing facility, but the investment is still expected to deliver a return in 2023. The factory is working with the Group's "Skunk Works" to continue developing ground breaking lens technology for smart eyewear, along with other revolutionary lens-related projects.
Board changes and finance function
Lord MacLaurin has notified the Board of his intention to retire as Chairman on 1 December 2022. His contribution throughout his tenure has been invaluable to the Group. As a result, Robin Totterman, CEO and founder of Inspecs, will move to an Executive Chairman role from 1 December 2022. Simultaneously, Richard Peck, current non-executive Director, and previously MD of Luxottica Retail northern Europe and MD of David Clulow, will become the Group's Chief Executive Officer.
The Board is currently in advanced stages of the take on process to appoint two new additional non-executive directors to the Board, and an update will be provided in due course.
With regards the Group's finance function, Inspecs is pleased to announce that Matthew Loran will join the Group as its new Group Finance Manager in November 2022. Matthew previously worked for Capita Group plc and Imperial Brands plc, working with the divisional finance teams around the globe. His experience will assist the Group as it continues to expand and integrate its accounting functions. In addition, new accounting personal have been recruited in both the Group's German and USA subsidiaries to enhance reporting and controls.
Outlook
It is clear that Inspecs is not immune to the macro environment or the downturn in consumer confidence, particularly in Europe, and this is expected to impact the remainder of this year and into the first half of 2023. That said, Inspecs continues to increase its market share and the Group is well placed to return to growth as and when its core markets return.
The Board will provide a Full Year trading update in January 2023 when it will look to give further guidance on the outturn for 2022 and the year ahead.
For further information please contact:
Inspecs Group plc Robin Totterman (CEO) Chris Kay (CFO)
| via FTI Consulting Tel: +44 (0) 20 3727 1000 |
Peel Hunt (Nominated Adviser and Broker) Adrian Trimmings Andrew Clark Lalit Bose | Tel: +44 (0) 20 7418 8900 |
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FTI Consulting (Financial PR) Alex Beagley Harriet Jackson Alice Newlyn
| Tel: +44 (0) 20 3727 1000 |
This announcement contains inside information for the purposes of the Market Abuse Regulation (Regulation (EU) No 596/2014) including as it forms part of domestic law in the United Kingdom by virtue of the European Union (Withdrawal) Act 2018. The person responsible for arranging release of this announcement on behalf of Inspecs is Chris Kay, Chief Financial Officer.
About Inspecs Group plc
INSPECS is a Bath-based designer, manufacturer and distributor of eyewear frames and optically advanced spectacle lenses. The Group produces a broad range of frames and lenses, covering optical, sunglasses and safety, which are either "Branded" (either under licence or under the Group's own proprietary brands), or "OEM" (including private label on behalf of retail customers as well as unbranded).
INSPECS aims to be the leader in eyewear solutions through its vertically-integrated business model and has adopted a three-pillar growth strategy to achieve this: (i) continue to grow organically; (ii) undertake further acquisitions (and drive value through leveraging the Group's internal capabilities); and (iii) extend the Group's manufacturing capacity.
The Group has completed several significant acquisitions since its IPO in February 2020. In December 2020, INSPECS acquired Eschenbach, a leading global eyewear supplier, headquartered in Nuremberg, Germany, which includes the American company Tura. This followed the acquisition of lens maker Norville in July 2020, whereby INSPECS combined two British heritage brands, Savile Row frame maker, and Norville lens maker, further enhancing its vertically-integrated business model. In December 2021 the Group acquired Ego Eyewear, a design and licensing company which uses third party eyewear manufacturers to produce premium fashion brands, and BoDe, a distributor of optical frames and sunglasses principally to the German and neighbouring markets.
INSPECS customers include global optical and non-optical retailers, global distributors and independent opticians, with its distribution network covering over 80 countries and reaching approximately 75,000 points of sale.
INSPECS has operations across the globe: with offices and subsidiaries in the UK, Germany, Portugal, Scandinavia, the US and China (including Hong Kong, Macau and Shenzhen), and manufacturing facilities in Vietnam, China, the UK and Italy. With the acquisition of Eschenbach, the Group's international reach further extends across Europe and the American markets.
More information is available at: https://inspecs.com