REG - IG Design Group PLC - Full Year Results
Tue 07:00
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RNS Number : 8862S IG Design Group PLC 29 July 2025
EMBARGOED UNTIL 7.00 am 29 July 2025
IG Design Group plc
(the 'Company', the 'Group' or 'Design Group')
Results for the year ended 31 March 2025
Simpler, more profitable and cash-generative Group following the divestment of
DG Americas
IG Design Group plc, a leading designer, innovator and manufacturer across
various celebration and creative categories announces its audited results for
the year ended 31 March 2025.
Financial highlights for the year ended 31 March 2025
Financial highlights FY2025 FY2024
Revenue $729.3m $800.1m
Adjusted((a))
‐ Operating profit $5.2m $31.1m
‐ Profit before tax $1.9m $25.9m
‐ Diluted (loss)/earnings per share (5.6)c 16.3c
Reported
‐ Operating (loss)/profit $(53.6)m $29.0m
‐ (Loss)/profit before tax $(55.6)m $23.8m
‐ Diluted (loss)/earnings per share (104.6)c 36.6c
Net cash as at the period end $84.8m $95.2m
((a)) Adjusted results exclude the impact of adjusting items - for further
detail see alternative performance measures reconciliation within the detailed
financial review
· Revenue decline, predominantly in DG Americas, driven by previously announced
soft consumer demand, retailer order reductions and customer bankruptcies
· Profit margins impacted across the Group by increased freight costs and
competitive pricing pressures, bringing adjusted operating profit to $5.2
million
· Recognised impairment of $54.2 million relating to DG Americas' assets,
following bankruptcy of major customer
· Received $8.4 million of cash through the strategic sale of surplus US
property
· Maintained a higher average cash position compared to the previous year,
ending with a robust net cash position of $84.8 million
Operational highlights
· Enhanced category value through a focus on increased licensing and branding
· Continued strong growth in Smartwrap™, one of the key product lines for DG
International
· Closed inefficient China manufacturing facility as planned
· Successfully completed the divestment of DG Americas post year-end,
effectively addressing market challenges, exacerbated by the impact of US
trade tariffs
Divestment of DG Americas
· The divestment of DG Americas removes a loss-making part of the Group
· The timing and nature of this divestment has effectively mitigated further
financial and operational impact on the Group
· Reported results for FY2026 will include two months of DG Americas' results,
transaction costs, and further non-cash impairment and/or loss on disposal of
these operations
· Nominal consideration received with the potential of 75% of any future net
proceeds realised by the buyer
Outlook
· Following the divestment, the Group will now be a simpler, more profitable and
cash-generative business
· Successfully negotiated new three-year receivables finance facility, which is
better value and easier to manage
· DG International has a strong heritage and benefits from long-established and
stable relationships with major retailers with well-structured categories and
product ranges
· Orderbook remains robust at 87% of budgeted revenues (FY2025: 81% at this
stage last year)
· The Group is targeting revenue in FY2026 of $270-280 million, with an adjusted
operating margin of 3-4%, with market challenges such as the impact of trade
tariffs on UK export sales to the US, despite cost actions. The Group expects
to maintain cash in excess of $40m
· The Board is focused on opportunities for growth through expansion into other
channels and product categories, especially across Continental Europe
· The Board is committed to driving sustainable growth in revenue and margin
over the long term
· Capital allocation remains focused on organic growth, with selective
investment in growth opportunities. The Board do not recommend a dividend for
FY2025, though shareholder distributions will be kept under review
Stewart Gilliland, Interim Executive Chair, commented:
"The year has been dominated by numerous external challenges, felt most
acutely by DG Americas. Despite sustained efforts over recent years to
stabilise the division, the Board took the decisive step, post-period, to exit
the business in order to protect the wider Group from further risk.
"This marks a key turning point for our business, enabling us to streamline
our operations and focus on the more resilient, profitable and cash-generative
DG International. With a clearer strategic direction and focus, we are now
better placed to pursue future growth and can look ahead with renewed
optimism.
"What must not be forgotten is that innovation - whether in product, design,
or solutions, collaboration and award-winning service are embedded in our DNA.
These qualities are why we enjoy longstanding, strong relationships with
household-name retailers across the globe.
"In what has undoubtedly been a challenging year, I am particularly proud of
the hard work and dedication shown by my colleagues. I would like to take this
opportunity to thank our teams for their commitment to driving our business
forward."
For further information, please contact:
IG Design Group plc Tel: +44 (0)1525 887310
Stewart Gilliland, Interim Executive Chair
Rohan Cummings, Chief Financial Officer
Canaccord Genuity Limited (Nomad and Broker) Tel: +44 (0)20 7523 8000
Bobbie Hilliam
Elizabeth Halley-Stott
Alma Strategic Communications
Rebecca Sanders-Hewett Tel: +44 (0)20 3405 0205
Sam Modlin designgroup@almastrategic.com
Will Merison
This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 (which forms part of domestic UK law
pursuant to the European Union (Withdrawal) Act 2018 ("UK MAR"). With the
publication of this announcement, this information is now considered to be in
the public domain.
Overview
FY2025 proved to be a challenging year for the Group, particularly for the DG
Americas division. It was largely shaped by the continuing headwind of lower
consumer demand in the US market, resulting in an increasingly competitive
retail environment where customer orders were reduced, pricing was challenged,
and some of our customers struggled. In particular, the bankruptcy of the
division's fourth largest customer had a material impact on our results for
the year. DG International experienced softness in consumer demand in certain
markets, particularly in the Independents channel, as well as pressure on
pricing in the competitive retail environment. However, its results were also
impacted by specific challenges such as supply chain disruption at one of our
major customers in continental Europe. Group revenue for the year was down
nearly 9% to $729.3 million (FY2024: $800.1 million). Sea freight rates were
elevated, especially at the start of the year, which also weighed on margins.
Consequently, adjusted operating profit was significantly reduced to $5.2
million (FY2024: $31.1 million). Adjusted profit before tax at $1.9 million
(FY2024: $25.9 million), reflects lower net finance costs from continued
strong cash management. The Group ended the year with a strong net cash
position of $84.8 million (FY2024: $95.2 million).
The experiences in the US market prompted the commencement of a review in
early 2025 of the strategic options for DG Americas. The objective was to
restructure the division, remove the more structurally challenged businesses
and categories through either sale or closure to retain a less complex, more
stable and profitable business. However, the early April 2025 announcement and
introduction of a new regime of trade tariffs on imports into the US market,
created significant additional uncertainty and volatility, particularly due to
the reliance on Chinese imports by DG Americas. This immediately impacted
future orders, as retail customers exercised caution and awaited more clarity
from the US administration. The tariffs further increased the cost and risk of
doing business in the US. This resulted in the need for a fast and more
radical response given the seasonal working capital requirements of the
division and the potential impact on the wider Group. Therefore, on 30 May
2025, the Group announced the sale of the DG Americas division. The remaining
Group is now simpler, more profitable and cash-generative, made up of
businesses in the UK, continental Europe and Australia.
Board changes
Paul Bal stepped down from his role as CEO, following the successful disposal
of DG Americas, with Stewart Gilliland assuming the role of Interim Executive
Chair. The search for a replacement is underway and in the meantime Stewart
will be supported by the broader executive team. The Board would like to thank
Paul for his hard work and commitment to the Group over his tenure.
The Group welcomed John Gittins to the Board as a Non-Executive Director in
March 2025. This followed Claire Binyon stepping down in January 2025. Mark
Tentori, Senior Independent Director and Audit Committee Chair, will not be
seeking re-election as he will be stepping down from the Board at the
conclusion of the forthcoming AGM in line with governance best practice, since
he has been a member of the Board for over nine years. At this stage, the
intent is for John Gittins to take over as Audit Committee Chair and Clare
Askem to become Senior Independent Director.
Divestment of DG Americas
The Group successfully delivered the divestment of the DG Americas business at
the end of May 2025. The Group received a nominal consideration and will be
entitled to 75% of any future net proceeds realised by the buyer, with no
ongoing recourse on the Group. The transaction has enabled the Group to exit a
structurally challenged and loss-making part of the Group. This constitutes a
material change in the Group's revenue (DG Americas being 60% of Group
revenue), global physical footprint, and product offering. The timing and
nature of the transaction has mitigated further adverse financial and
operational impact the Group would otherwise have experienced, and has
protected the profitable and cash-generative DG International division and the
remainder of the Group.
Outlook and strategy
There are some immediate challenges to address in the current year which
include the impact of new tariffs on continued export sales from the UK to the
US. There has also been ongoing disruption within a major customer's supply
chain network in continental Europe, which is now largely resolved, and
continued softness in the Australian consumer market. The Group is therefore
targeting revenue in FY2026 of $270-280 million, with an adjusted operating
margin of 3-4%. Beyond this, the Group is targeting low single digit revenue
growth and an improvement in adjusted operating margin to 4-5%. The Group
expects to maintain cash in excess of $40 million, which will increase in line
with profits. The Board remains encouraged by the orderbook representing 87%
of FY2026 budgeted revenues (81% at this stage last year). For completeness,
two months of DG Americas' trading will be included in the Group results for
the year, alongside transaction costs, and further non-cash impairment and/or
loss on disposal of these operations.
Looking ahead, the Group continues with its businesses in the UK, continental
Europe and Australia. These businesses have less complex models, and a strong
heritage that benefits from long-established and stable relationships with the
major retailers. DG International combines well-structured product ranges with
a strong focus on design and innovation, supported by a geographically diverse
market footprint, trading with over 70 countries.
A greater focus of resources will support the continuing businesses to achieve
sustainable growth in revenue, profits and margins over the coming years,
especially looking to under-served categories and channels across its markets.
This focus on growing the core of the business, along with financial
discipline, will allow the Group to deliver consistently on its targets. The
Group has a strong balance sheet, with an average cash position maintained
throughout the year, despite typical seasonal working capital fluctuations.
Taken together, these improved attributes form a powerful strategic and
operational combination. Therefore, the Group will start to generate cash and
return to creating value.
Capital allocation remains focused on supporting organic growth, complemented
by selective investment in strategic opportunities. While the Board does not
recommend a dividend for FY2025, shareholder distributions will continue to be
kept under review in line with the Group's performance and capital needs.
Summary FY2025 results
Group revenue declined by nearly 9%, with both the DG Americas and DG
International divisions impacted by the softer consumer demand and therefore
cautious ordering by our retail customers. DG Americas' revenue declined by
12%, and the segment reported an adjusted operating loss, primarily driven by
the lower volumes exacerbated by customer bankruptcies. DG International
proved more resilient, with revenue down 3% and adjusted operating margins of
10% (FY2024: 11%) despite being impacted by higher freight costs and
competitive pricing pressures. The closure of inefficient manufacturing in
China was executed as planned, delivering cost savings in H2, and will
contribute improved profitability in DG International in the future. Despite
some near-term pressures, the Group remains focused on profitable growth
through unlocking opportunities in under-served product categories and
channels across its markets.
Adjusting items, as they relate to profit before tax, totalled $57.5 million
for the year (FY2024: $2.1 million), primarily driven by the recognition of a
non-cash impairment of $54.2 million relating to DG Americas' assets. The
remainder largely relates to integration and restructuring costs, including
those associated with the closure of the manufacturing facility in China.
Whilst these items have impacted reported results, they are non-recurring in
nature and have therefore been classified as adjusting items.
The Group ended the year with a net cash balance of $84.8 million (FY2024:
$95.2 million), reflecting a $10.4 million year-on-year decrease. This
reduction was primarily driven by reduced profitability and by working
capital, particularly within DG International, partially offset by proceeds
from the sale of a distribution facility in DG Americas as part of the
division's site consolidation project. Despite the typical seasonal working
capital fluctuations, the Group maintained a higher average cash position
throughout the year, demonstrating continued financial discipline and
effective cash flow management.
Although the Group seeks to return to profitable sales growth, in the face of
increased macroeconomic and geopolitical uncertainty, the Board is not
recommending a dividend in respect of the year ended 31 March 2025.
Regional highlights
Group revenue declined by 9%, with adjusted operating profit down at $5.2
million (FY2024: $31.1 million), predominantly driven by the decline in DG
Americas. The split between the DG Americas and DG International divisions is
as follows:
Segments Revenue Adjusted operating profit/ (loss) Adjusted operating margin
FY2025 FY2024 Change FY2025 FY2024 Change FY2025 Change
$m $m % $m $m % % %
DG Americas 439.5 500.3 (12.1) (15.5) 6.8 (328.9) (3.5) 1.4
DG International 289.8 299.8 (3.3) 28.1 32.3 (12.7) 9.7 10.8
Eliminations / - - (7.4) (8.0)
Central costs
Total 729.3 800.1 (8.8) 5.2 31.1 (83.2) 0.7 3.9
Design Group Americas
DG Americas, which accounts for 60% of the Group's revenue, declined by 12% to
$439.5 million (FY2024: $500.3 million), reflecting a continuation of a very
challenging market. The revenue decline was driven by a competitive US retail
environment, whereby more cautious consumer spending prompted retail customers
to further reduce order volumes and seek better pricing. Resulting retail
customer bankruptcies further impacted sales, with the most notable being the
division's fourth largest customer entering Chapter 11 protection and then
liquidation during the year. Insolvencies among US retailers accounted for
approximately 20% of the DG Americas revenue decline. DG Americas took a
disciplined approach to credit risk maintained throughout the year, carefully
balancing commercial opportunities with prudent exposure management to
higher-risk accounts. While DG Americas did secure new business wins during
the year, these were not sufficient to fully offset the lost revenue. The
revenue decline affected all product categories given the discretionary nature
of many of these. Gift packaging and stationery were particularly affected,
with consumers prioritising essential spending in a more cautious economic and
geopolitical climate, particularly in the run-up to and beyond the November
2024 US presidential elections. Encouragingly, online sales grew, reflecting
some early success in our strategic focus on expanding our e-commerce
capabilities.
The decline in revenue driven by market softness, coupled with the
consequences of retail customer bankruptcies, especially where it involved
inventory on consignment, had a significant impact on the year's
profitability, resulting in an adjusted operating loss of $15.5 million
(FY2024: $6.8 million profit). Profitability was further impacted by rising
raw material, manufacturing, and freight costs, which could not be fully
offset through pricing due to challenging market conditions. The reduction in
sales further reduced operating leverage and overhead recovery, also hitting
margins. Turnaround initiatives were taken to mitigate these impacts,
including a $7.0 million reduction in staff costs following two restructuring
initiatives. Ongoing site consolidation progressed, with the sale of a surplus
distribution facility, generating proceeds of $8.4 million and a related
profit of $4.9 million, recognised within adjusting items. In addition, good
working capital management continued, with value unlocked through tighter
inventory and receivables management, supporting cash flow through better
efficiency and greater discipline.
Design Group International
DG International represents 40% of the Group's revenue, generating $289.8
million this year (FY2024: $299.8 million), a 3% decline, reflecting a
combination of challenging consumer and trading conditions across certain
markets. The trading environment was particularly difficult during the
critical Christmas period in the UK and Australia, with the division's overall
seasonal sales down 6% year-on-year. Greetings cards and party ranges within
our Celebrate category were hardest hit as consumer demand for more
discretionary purchases was subdued. In the latter part of the year, the
Homeware category sales were impacted, falling by 5%, driven by supply chain
disruption at one of our major customers in continental Europe, which limited
their ability to replenish stock and place new orders. The Value & Mass
channel, which accounts for 74% of segment revenues, declined by $10.0 million
due to these factors, as well as ongoing competition, especially as softer
consumer demand results in more cautious ordering by our retail customers. The
Independents channel in the UK and Australia also struggled reflecting the
ongoing lower consumer demand.
Adjusted operating profit was $28.1 million (FY2024: $32.3 million), down 13%,
with the adjusted operating margin softening to 9.7% (FY2024: 10.8%).
Profitability was most notably impacted by significantly higher freight rates
between the Far East and Europe, particularly in the first half of the year
due to the Middle East crisis, which significantly increased the cost of
goods. In addition to lower sales volumes, competitive pressures in several
markets led to reduced pricing to maintain volume and customer relationships.
As disclosed last year, the strategic decision to exit inefficient
manufacturing in China was implemented as planned during the year, with the
second half of the year benefitting from the elimination of associated
operating costs, avoiding the usual seasonal losses and supporting improved
profitability in line with expectations.
The DG International division consumed cash in the year due to working capital
outflows. This was primarily due to logistics challenges at a major retail
partner delayed shipments in H2 and led to increased inventory levels,
compounded by unusually low stock levels at March 2024 following earlier
freight-related disruptions.
Looking ahead, while the external environment remains uncertain, the DG
International team is taking decisive actions to adapt, focusing on driving
growth through widening and deepening retailer partnerships, improving cost
efficiency, and enhancing product and channel strategies. These efforts
position the segment for long-term recovery and sustainable growth when
markets begin to stabilise and recover. Furthermore, under-served categories
and channels are under review as opportunities for growth.
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 marketplace for
our product categories. Last year, we restructured our assortment to better
reflect our strategic direction, centred around two key themes: 'Celebrate'
and 'Create'. This redefinition, aligned with changes to our organisational
structures, enhances our ability to focus on commercial and competitive
opportunities. Each theme 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 FY2025 FY2024((a)) Change %
Gift packaging 47% $343.0m 46% $364.5m (6)%
Party 10% $69.6m 11% $85.8m (19)%
Goods not for resale 7% $54.1m 7% $59.3m (9)%
Celebrate 64% $466.7m 64% $509.6m (8)%
Craft 18% $130.6m 18% $142.1m (8)%
Stationery 5% $38.3m 6% $48.0m (20)%
Homeware 13% $93.7m 12% $100.4m (7)%
Create 36% $262.6m 36% $290.5m (10)%
Total $729.3m $800.1m (9)%
((a))Following the redefinition of product categories, updates have been
applied across local systems, resulting in some restatements of prior year
figures as presented above.
The Group's total revenue declined by 9%, with the downturn being broad-based
and impacting all categories. All categories maintained their relative share
of total revenue, suggesting consistent consumer behaviour patterns. Gift
packaging remains the Group's largest product category, representing 47% of
the Group's portfolio. It demonstrated relative resilience, with revenue
declining by 6% year-on-year. Notably, within this category, giftwrap revenue
held steady, highlighting the continued focus on our core manufactured product
category. The Stationery and Party categories experienced the steepest
declines, with revenue falling by 20% and 19% respectively, along with a
reduction in their share of the portfolio. These declines reflect reduced
consumer discretionary spending across all markets. Craft maintained its 18%
share of revenue, with an 8% decrease aligning with the Group's overall
performance. Within Craft, whilst general craft and activity ranges saw softer
demand, this was partially offset by some growth in sewing patterns. Homeware
increased its share of the portfolio, despite a 7% decline in revenue that was
primarily due to the supply chain disruption in the continental Europe market.
Revenue by customer channel FY2025 FY2024 Change %
Value & Mass 70% $513.8m 70% $559.7m (8)%
Independents 16% $116.3m 16% $130.7m (11)%
Specialists 11% $76.5m 11% $88.5m (14)%
Online 3% $22.7m 3% $21.2m 7%
Total $729.3m $800.1m (9)%
The customer channel mix remained consistent year-on-year, with the revenue
decline impacting most channels. Value & Mass and Independents continued
to dominate the revenue base, making up 86% of total revenue. Value & Mass
was particularly impacted by customers reducing order sizes as a result of
softer consumer demand, as well as heightened competition amongst retailers.
The Independents channel faced weaker demand across most markets and
categories, particularly in Australia. Notably, Online was the only channel to
grow, up 7%, reflecting both the continued momentum in many digital commerce
platforms as well as our strategic focus on this channel as a source for
future growth.
Revenue by season FY2025 FY2024 Change %
Everyday 50% $364.7m 50% $396.9m (8)%
Christmas 42% $307.5m 42% $337.2m (9)%
Minor seasons 8% $57.1m 8% $66.0m (13)%
Total $729.3m $800.1m (9)%
Seasonality patterns remain unchanged, with Christmas continuing to be a key
trading period. Softer demand affected order volumes throughout the year.
Revenue by brand FY2025 FY2024 Change %
Customer own brand/bespoke 49% $357.7m 51% $407.7m (12)%
DG brand 38% $280.5m 38% $307.1m (9)%
Licensed 13% $91.1m 11% $85.3m 7%
Total $729.3m $800.1m (9)%
Our brand revenue mix reflects deliberate strategic execution to drive
long-term value growth. DG branded products maintained their 38% share of
total revenue, highlighting consistent performance and our ongoing work to
enhance segmentation and market relevance. Licensed revenue increased in
share, with revenue up 7%, demonstrating the success of our strategy to
increase category value through targeted licensed offerings that enhance
consumer appeal. We extended our relationships in this area, in some cases
through collaborations with our larger customers. Customer own brand/bespoke
declined by 12% as we continue to re-balance our portfolio towards higher
margin, strategically aligned segments.
Sustainability
Design Group's sustainability approach, 'Helping Design a Better Future',
continues to guide our strategic approach across three core pillars: People,
Product, and Planet. Sustainability is embedded throughout our operations from
product innovation and ethical sourcing to supply chain management and
corporate governance, as we aim to drive positive environmental and social
impact while enhancing our business resilience.
Over the past year we have continued in line with this approach, our key
sustainability performance indicators (KPIs) and progress against them are
detailed in the FY2025 sustainability report. These metrics reflect our
commitment to tracking our performance, driving accountability, and aligning
our efforts with stakeholder expectations and regulatory requirements.
We recognise that sustainability is an ongoing journey. While we are proud of
the progress we have made, our next priority is to accelerate the development
of clear, measurable targets that will guide our long-term goals and
commitments. Through transparency and a commitment to continuous improvement,
we remain focused on integrating sustainability meaningfully across our
business.
People
Our people are at the core of our business and are key to our success. As a
global organisation, our ability to attract, retain and develop skilled and
engaged employees is fundamental to delivering creativity, innovation,
operational excellence and sustainable growth. This year we experienced a
voluntary turnover rate of 14%, continuing a three-year downward trend that
reflects the strength of our employee experience and workplace culture. We
remain committed to creating an inclusive, safe, and empowering environment
where individuals feel safe, valued, supported and developed. This year's
global engagement survey, with a 78% participation rate, provided valuable
insight into employee sentiment which was strong across the Group. The survey
also highlighted opportunities where we can continue to improve as an
employer, for which tailored action plans are being implemented across all
business units. The roll-out of LinkedIn Learning globally has equipped our
teams with flexible, development tools, promoting a culture of continuous
learning essential for adaptability in a rapidly evolving market.
We believe that investing in our people is not only the right thing to do, but
also essential to unlocking further innovation, building resilience and
delivering shareholder value. These people-focused achievements support our
broader growth strategy by enhancing engagement, retention and organisational
capability whilst also helping us attract talent for the future.
Product
Our products are central to our value proposition, and how we design, produce,
source, and package them has a direct impact on our environmental footprint
and reputation. As a business rooted in creativity and manufacturing, product
innovation remains central to our sustainability impact. We are proud to be
offering sustainable product ranges and packaging at a time when long-term
environmental responsibility remains essential, especially amongst our
smaller, remaining customer base, even amid shifting global sentiment and
priorities. With nearly half of our revenue coming from single-use products,
there is a key opportunity for us to support the transition to a circular
economy where our products are made from recycled materials and designed to be
reused or recycled at the end of their life. This year we expanded our
Smartwrap™ plastic-free giftwrap solution across additional markets,
including the UK and the US. Smartwrap(TM) sales in FY2025 have grown over
300% and contribute to a saving of over 91 tonnes of plastic in the year,
whilst delivering a high-quality product with strong commercial appeal. Our
product sustainability strategy focuses on reducing single-use plastics and
improving recyclability. In FY2025, 68% of single-use products and 76% of
packaging were fully recyclable, supported by continued investment in
eco-design and material innovation. Despite the fall in Group revenue, the
percentage of recyclable product ranges and packaging remained in line or
marginally improved on prior year, showing that we remain focused on the
sustainability of our single-use items and packaging.
Our commitment to sustainability is highlighted by targeted capital investment
in sustainable solutions, and we remain committed to continuing this approach
to further localise production, expand our portfolio of eco-friendly products,
and reduce carbon emissions across our value chain, all while closely aligning
with our customers' evolving sustainability priorities.
Planet
As a company with manufacturing operations and a global supply chain, we are
aware of our environmental footprint and the risks associated with climate
change. Our environmental strategy continues to progress, with improvements in
emissions reduction, waste minimisation, and climate-related risk analysis.
Operationally, waste to landfill was reduced to 31%, supported by strong zero
waste to landfill policies in our UK and European manufacturing sites.
Furthermore, solar installations in Mexico and local manufacturing investments
further illustrate our commitment to reducing greenhouse gas emissions. The
roll-out of the Group-wide ESG platform last year enabled the reporting of
Scope 1 and 2 emissions. The next project initiated by the Sustainability
Forum is the measurement of Scope 3 emissions in preparation for setting
Science-Based Targets in the coming year which align with stakeholder
expectations.
Detailed financial review
The Group's financial results are summarised below, setting out both the
reported and the adjusted results.
FY2025 FY2024
Reported Adjusting items Adjusted Reported Adjusting items Adjusted
$m $m $m $m $m $m
Revenue 729.3 - 729.3 800.1 - 800.1
Gross profit 100.9 6.0 106.9 141.6 0.5 142.1
Overheads (154.5) 52.8 (101.7) (112.6) 1.6 (111.0)
Operating (loss)/profit (53.6) 58.8 5.2 29.0 2.1 31.1
Net finance costs (2.0) (1.3) (3.3) (5.2) - (5.2)
(Loss)/profit before tax (55.6) 57.5 1.9 23.8 2.1 25.9
Tax (43.7) 37.2 (6.5) 13.3 (21.8) (8.5)
(Loss)/profit after tax (99.3) 94.7 (4.6) 37.1 (19.7) 17.4
Operating (loss)/profit (53.6) 58.8 5.2 29.0 2.1 31.1
Goodwill impairment 48.7 (48.7) - - - -
Depreciation and impairment of PPE and software 17.6 (6.2) 11.4 13.5 - 13.5
Depreciation and impairment of right-of-use assets 16.3 (1.2) 15.1 16.0 0.5 16.5
Amortisation of acquired intangibles 1.8 (1.8) - 1.8 (1.8) -
EBITDA 30.8 0.9 31.7 60.3 0.8 61.1
Diluted (loss)/earnings per share (104.6)c 99.0c (5.6)c 36.6c (20.3)c 16.3c
Revenue for the year ended 31 March 2025 declined by 9% to $729.3 million
(FY2024: $800.1 million), reflecting the continued impact of macroeconomic
headwinds on consumer behaviour and an increasingly competitive retail
landscape across key markets. Both the DG Americas and DG International
divisions experienced revenue declines, with the reduction more pronounced in
DG Americas, where the same underlying challenges were felt more acutely. DG
Americas revenue declined by 12%, driven by the loss of customer accounts,
weaker consumer demand, and further compounded by customer bankruptcies during
the year. DG International revenue declined by 3%, or 5% on a constant
currency basis, with foreign exchange movements partially offsetting the
underlying drop. The decline in DG International was primarily driven by
heightened competitive pressures, which led to lost business where pricing was
unsustainable, or margin compression where pricing was maintained to preserve
key customer relationships. Reduced consumer demand and supply chain
disruptions at a major customer also contributed to lower order volumes.
Adjusted gross margin decreased to 14.7% (FY2024: 17.8%) partly due to higher
freight costs associated with the Red Sea disruptions, particularly during the
first half of the year. Additionally, reduced operating leverage in DG
Americas due to lower manufacturing volumes adversely impacted margins. A
highly competitive retail environment also pressured pricing and margins
across the Group. These challenges offset the benefits of cost-saving measures
executed during the year, such as restructuring initiatives. These cost-saving
initiatives resulted in improved adjusted overheads year-over-year.
Consequently, the adjusted operating profit declined to $5.2 million (FY2024:
$31.1 million) in the year, with adjusted operating margin falling to 1%
(FY2024: 4%). This decline reflects the combined impact of the factors
discussed above, as well as customer bankruptcies, which not only reduced
sales and margins but also reduced profitability through higher inventory
write-downs and debtor provisions.
Adjusted net finance costs decreased to $3.3 million (FY2024: $5.2 million),
benefitting from a stronger average net cash position throughout the year.
Adjusted profit before tax was $1.9 million (FY2024: $25.9 million) with the
decline largely reflecting the combined pressures on gross margin and
operating profitability. The Group recorded a reported loss before tax of
$55.6 million (FY2024: profit before tax of $23.8 million). This result
includes adjusting items of $57.5 million (FY2024: $2.1 million) which are
primarily due to the non-cash write-down of DG Americas' assets.
The Group reported an adjusted loss after tax of $4.6 million (FY2024: profit
after tax of $17.4 million), with the reported loss after tax for the year at
$99.3 million (FY2024: profit after tax at $37.1 million), reflecting the
adjusting item relating to the derecognition of deferred tax assets in DG
Americas.
Adjusting items
Adjusting items are material, unusual, or non-recurring gains or losses
presented separately due to their nature, size, or incidence. They provide a
clearer view of the Group's underlying performance by excluding items not
related to core operations, ensuring consistency with how the business is
managed and measured. These may include events spanning multiple periods but
not considered part of normal trading activity.
The Group's adjusting items in the year to 31 March 2025 is a net charge
before tax of $57.5 million (FY2024: $2.1 million). The details of adjusting
items are included below:
FY2025 FY2024
$m $m
Impairment of assets (54.2) -
Integration and restructuring cost (6.4) (0.3)
Release of provisions for pre-acquisition duties 4.9 -
Amortisation of acquired intangibles (1.8) (1.8)
Total (57.5) (2.1)
An impairment charge of $54.2 million (FY2024: $nil) was recognised in the
year, comprising $48.7 million against goodwill arising from the acquisition
of DG Americas, $1.7 million relating to intangible assets, and $3.8 million
in plant and machinery. The impairment was triggered by the Chapter 11
bankruptcy of DG Americas' fourth-largest customer, alongside a broader
deterioration in the business's trading performance. In response, the Group
revised its long-term cash flow forecasts for DG Americas to reflect the
expected impact on future performance. Following this, the recoverable amount
was assessed using a fair value less costs to sell (FVLCTS) approach. This
resulted in a write-down of assets to their revised recoverable value. Further
detail is provided in note 9 of the consolidated accounts.
During FY2025, the Group incurred $6.4 million (FY2024: $0.3 million) in
integration and restructuring costs, reflecting initiatives aimed at
delivering operational efficiencies across multiple geographies. These costs
were primarily associated with post-acquisition integration, site
rationalisation, and organisational restructuring. In DG Americas,
restructuring activities included workforce alignment, the consolidation of
warehousing operations, lease-related adjustments, and efforts to simplify the
legal entity structure. This business also completed the sale of a surplus
distribution facility, delivering a profit on disposal. We also progressed the
closure of the Huizhou manufacturing facility, incurring costs associated with
severance, asset write-downs, and site security during the wind-down period.
In addition, reorganisation efforts in DG UK and its Far East sourcing offices
incurred costs associated with operational consolidation and the preparation
of a legacy site for sale. Integration and restructuring costs also include
the relocation of DG Australia's warehouse operations, which gave rise to
transition-related expenses and temporary dual-site running costs.
Separately, $0.4 million was paid to settle a historic DG Americas foreign
subsidiary customs matter, with the remaining $4.9 million provision released
following regulatory closure.
A further $1.8 million (FY2024: $1.8 million) was recognised for amortisation
of acquired intangible assets, excluded from adjusted results due to their
non-trading nature.
Please see Use of non-GAAP measures (APMs) section in note 1 of the accounts
for further details.
Taxation
The Group aims to manage its tax affairs in an open and transparent manner,
with the objective of full compliance with all applicable rules and
regulations in the tax jurisdictions in which it operates. The Group has not
entered into any tax avoidance or otherwise aggressive tax planning schemes
and the Group continues to operate its tax affairs in this manner.
The Group's adjusted tax charge for the year is $6.5 million (FY2024:
$8.5 million) against an adjusted profit before tax of $1.9 million (FY2024:
$25.9 million). This equates to an adjusted effective tax rate of 338.3%
(FY2024: 32.9%). Deferred tax assets relating to the entities in the UK (both
UK trading and PLC) and DG Americas are not being recognised due to the lack
of sufficient compelling evidence to suggest their recognition currently.
Consequently, the absence of tax relief on current year tax losses in the US,
inflates the adjusted effective tax charge for the Group. The profits in DG
Europe and DG Australia, which are considerable contributors to adjusted
profit before tax are taxed 25.8% and 30% respectively. Further details of
this tax charge are set out in note 7 of the accounts.
The taxation charge included in adjusting items of $37.2 million mainly
relates to the derecognition of deferred tax assets in DG Americas on the
basis that there is insufficient evidence to support future utilisation.
Tax paid in the year was $9.6 million (FY2024: $5.2 million). This is
$4.4 million higher than the prior year, reflecting temporary payment timing
differences. Had this timing difference not occurred, the payments would have
been lower than the prior year, reflective of profits in the Group's
tax-paying jurisdictions against the previous year.
Earnings per share
Diluted adjusted loss per share at 5.6 cents (FY2024: earnings per share at
16.3 cents) is lower year-on-year driven by the decline in profit after tax.
Diluted loss per share at 104.6 cents (FY2024: earnings per share at 36.6
cents) significantly declined, reflective of the DG Americas' impairment,
coupled with weaker underlying performance and higher tax charge. Further
details are set out in note 21 of the accounts.
Dividend
Although the Group seeks to return to more profitable sales growth, in the
face of increased macroeconomic and geopolitical uncertainty, the Board is not
recommending a dividend in respect of the year ended 31 March 2025.
Return on capital employed
Maximising return on capital employed remains a focus point across all
business units. In FY2025, adjusted return on capital employed declined to
2.3% (FY2024: 12.4%), primarily reflecting the reduction in profitability over
the year. Whilst we continued to focus on managing working capital and
improving capital efficiency, these improvements were not sufficient to offset
the impact of lower earnings. We remain committed to enhancing capital returns
through operational efficiency.
Cash flow and net cash
The Group ended the year with a net cash balance of $84.8 million (FY2024:
$95.2 million), representing a year-on-year decrease of $10.4 million. This
reduction was primarily driven by lower profitability, increased working
capital requirements, and higher integration and restructuring costs (reported
as adjusting items), which together significantly reduced cash generated from
operations. While tax payments were higher, this was partially offset by lower
interest and lease payments. In addition, proceeds from a property sale and a
reduction in capital expenditure also contributed positively to the year-end
cash position.
FY2025 FY2024
Cash flow
$m $m
Adjusted EBITDA 31.7 61.1
Add back for share-based payment charge 0.9 1.5
Movements in working capital (7.6) 26.7
Adjusted cash generated from operations 25.0 89.3
Adjusting items within cash generated from operations (8.8) (1.9)
Cash generated from operations 16.2 87.4
Adjusting items within investing and financing activities 8.6 -
Capital expenditure (net of disposals of property, plant and equipment) (6.5) (9.9)
Acquisition of business - (0.5)
Tax paid (9.6) (5.2)
Interest paid (2.6) (4.5)
Lease liabilities principal repayments (16.7) (18.4)
Dividends paid (including those paid to non-controlling interests) (0.7) -
Purchase of own shares - (3.5)
FX and other 0.9 (0.7)
Movement in net cash (10.4) 44.7
Opening net cash 95.2 50.5
Closing net cash 84.8 95.2
Working capital
There was a working capital absorption of $7.6 million in the year compared to
the significant release achieved in the prior year. This adverse result was
primarily attributable to the European operations, where a key retail partner
experienced supply chain disruptions in the latter part of the year. These
disruptions led to reduced sales call-offs and consequently increased
inventory levels. This was further compounded by unusually low stock levels at
March 2024, as buffer inventory had been drawn down earlier in the year to
address freight-related disruptions. The negative impact from Europe offset
progress made in improving working capital efficiency across the rest of DG
International and DG Americas.
The Group continues to take a disciplined approach to credit risk management,
with active monitoring of debtors and customer credit profiles. Despite the
challenging trading environment and high number of customer insolvencies in
the year, particularly in the US, doubtful debt write-offs remained low at
0.4% of revenue (FY2024: 0.2%), reflecting the effectiveness of our ongoing
efforts to mitigate credit risk.
Capital expenditure
Capital expenditure of $6.5 million was lower than the prior year (FY2024:
$9.9 million), driven by lower levels of investment in DG Americas, coupled
with high levels of site consolidation spend in previous years.
Average leverage
Average leverage remains a key metric for the Group, reflecting the
seasonality of working capital requirements and the importance of maintaining
adequate headroom within our banking facilities during peak funding periods.
As at 31 March 2025, average leverage was 0.0 times (FY2024: 0.0 times),
supported by an average net cash position of $40.2 million over the year, up
from $27.7 million in FY2024.
The definition of average leverage excludes lease liabilities from the
measurement of debt, with adjusted EBITDA correspondingly reduced for lease
payments, consistent with the methodology applied in prior periods.
Banking facilities
During the year, the $125 million Asset Backed Lending (ABL) facility with
HSBC and NatWest was supplemented by an agreement to extend its maturity to
June 2027 at reduced maximum level of $100 million. This facility was
cancelled on 30 May 2025, following the disposal of DG Americas. On 11 July
2025, the Group entered into a new Receivable Finance Facility with the same
banks. This £40 million facility has an initial minimum period of 36 months
and provides funding based on a borrowing base linked to eligible receivables
across participating Group companies. The facility does not include financial
ratio covenants but is subject to certain operational covenants.
Further details are set out in note 15 of the accounts.
Foreign exchange exposure management
The Group's 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. To aid comparability between periods, constant
currency figures are provided by retranslating the prior year's results using
current year exchange rates.
In FY2025, currency movements had a modest favourable impact. On a constant
currency basis, the revenue decline would have been $3.8 million higher, and
the decline in adjusted profit before tax would have been $0.6 million
greater, had FY2024 results been translated at FY2025 rates.
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.
Financial position and going concern basis
The Group's net assets decreased by $99.3 million to $270.2 million at
31 March 2025 (FY2024: $369.5 million). 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 year end
with a net cash position of $84.8 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 FY2026 and FY2027
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 the loss of a
significant portion of the business with one of our major customers, as well
as a recurrence of previous freight rate inflation or a cyber-attack, beyond
those risks already factored into the budgets and plans.
The base forecasts and additional sensitivity analysis have been tested
against the limitations of the banking facility. 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. 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.
Non-adjusting post balance sheet events
On 30 May 2025, the Group completed the disposal of its wholly owned
subsidiary, Design Group Americas, Inc., the holding company of the Group's US
division, to HUK 168 Limited, a special purpose vehicle owned by the Hilco
Capital group. Under the terms of the share purchase agreement, the Group
received a nominal consideration and will be entitled to 75% of any future net
proceeds realised by the buyer from a sale or realisation of DG Americas or
its assets, after agreed deductions and to the extent such proceeds are not
retained for DG Americas' working capital purposes. The Buyer will retain the
remaining 25% of any such proceeds. There is no ongoing recourse on the Group,
and no certainty that any further proceeds will be received.
The disposal enabled the Group to exit a structurally challenged and
loss-making part of the business ahead of its seasonal peak working capital
cycle. It simplified operations and allowed management to refocus on
stronger-performing markets in the UK, continental Europe, and Australia.
On 11 July 2025, the Group secured a new three-year receivables finance
facility of £40 million, supported up by the UK and Netherlands receivables.
The facility provides committed funding to support the Group's ongoing working
capital requirements and replaces the previous ABL facility, which was
terminated following the completion of the DG Americas disposal.
Rohan Cummings
Director
28 July 2025
Statement of Directors' responsibilities in respect of the financial
statements
The Directors are responsible for preparing the annual report and the
financial statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have prepared the Group financial
statements in accordance with UK-adopted International Accounting Standards
and the Company financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 102 'The Financial Reporting Standard applicable in the UK and
Republic of Ireland', and applicable law). Under company law, Directors must
not approve the financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and Company and of
the profit or loss of the Group for that period.
In preparing the financial statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· state where applicable UK-adopted International Accounting Standards have been
followed for the Company financial statements, subject to any material
departures disclosed and explained in the financial statements;
· make judgements and accounting estimates that are reasonable and prudent; and
· prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Group and Company will remain in business.
The Directors are responsible for safeguarding the assets of the Group and
Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are also responsible for keeping adequate accounting records
that are sufficient to show and explain the Group's and Company's transactions
and disclose with reasonable accuracy at any time the financial position of
the Group and Company and enable them to ensure that the financial statements
comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the
Company's website. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from legislation in other
jurisdictions.
Directors' confirmations
· In the case of each Director in office at the date the Directors' report is
approved:
· so far as the Director is aware, there is no relevant audit information of
which the Group's and Company's auditors are unaware; and
· they have taken all the steps that they ought to have taken as a director in
order to make themselves aware of any relevant audit information and
· to establish that the Group's and Company's auditors are aware of that
information.
Rohan Cummings
Chief Financial Officer
28 July 2025
Consolidated income statement
Year ended 31 March 2025
2025 2024
Note $000 $000
Revenue 2 729,265 800,051
Cost of sales 2 (628,344) (658,532)
Gross profit 100,921 141,519
Selling expenses (42,403) (44,143)
Administration expenses - costs (71,914) (70,045)
Administration expenses - goodwill impairment 9 (48,679) -
Other operating income 5 8,488 1,665
Operating (loss)/profit 3 (53,587) 28,996
Finance income 6 3,098 1,065
Finance costs 6 (5,042) (6,219)
(Loss)/profit before tax (55,531) 23,842
Income tax (charge)/credit 7 (43,744) 13,277
(Loss)/profit for the year (99,275) 37,119
Attributable to:
Owners of the Parent Company (99,685) 35,625
Non-controlling interests 410 1,494
(Loss)/earnings per ordinary share
2025 2024
Note cents cents
Basic 21 (104.6) 36.8
Diluted 21 (104.6) 36.6
Consolidated statement of comprehensive income
Year ended 31 March 2025
2025 2024
Note $000 $000
(Loss)/profit for the year (99,275) 37,119
Other comprehensive (expense)/income:
Items that will not be reclassified to profit or loss
Re-measurement of defined benefit pension and health benefit schemes 23 (40) (48)
Items that may be reclassified subsequently to profit or loss
Exchange difference on translation of foreign operations (6,357) (5,502)
Transfer to profit and loss on maturing cash flow hedges (398) (285)
Net unrealised gain on cash flow hedges (177) 292
Income tax relating to these items - -
(6,932) (5,495)
Other comprehensive expense for the year, net of tax (6,972) (5,543)
Total comprehensive (expense)/income for the year, net of tax (106,247) 31,576
Attributable to:
Owners of the Parent Company (106,330) 30,237
Non-controlling interests 83 1,339
(106,247) 31,576
Consolidated statement of changes in equity
Year ended 31 March 2025
Attributable to the owners of the Parent Company
Share Share premium and capital redemption reserve $000 Merger reserve $000 Hedging reserve $000 Translation reserve $000 Retained earnings/ Shareholders' equity Non-controlling interests $000 Total
capital (Accumulated losses) $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
(Loss)/profit for the year - - - - - (99,685) (99,685) 410 (99,275)
Other comprehensive expense - - - (575) (6,030) (40) (6,645) (327) (6,972)
Total comprehensive (expense)/income for the year - - - (575) (6,030) (99,725) (106,330) 83 (106,247)
Transactions with owners in their capacity as owners
Equity-settled share-based payments (note 23) - - - - - 925 925 - 925
Options exercised (note 20) 2 - - - - (2) - - -
Equity dividends paid - - - - - - - (668) (668)
Exchange differences 155 5,494 1,024 - - - 6,673 - 6,673
At 31 March 2025 6,358 224,704 41,907 (533) (11,770) 2,220 262,886 7,284 270,170
In line with the Group's accounting policies, 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 the translation
reserve.
Merger reserve
The merger reserve comprises premium on shares issued in relation to business
combinations.
Capital redemption reserve
The capital redemption reserve comprises amounts transferred from retained
earnings in relation to the redemption of preference shares. For ease of
presentation, the amount of $1.7 million relating to the capital redemption
reserve has been included within the column of share premium and capital
redemption reserve in the balances at the end of the year (2024: $1.7
million). The only movement in this balance relates to foreign exchange.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net
change in the fair value of cash flow hedging instruments related to hedged
transactions that qualify for hedge accounting and have not yet matured.
Translation reserve
The translation reserve comprises all foreign currency differences arising
from the translation of the financial statements of foreign operations.
Shareholders' equity
Shareholders' equity represents total equity attributable to owners of the
Parent Company.
Attributable to the owners of the Parent Company
Share Share premium and capital redemption reserve $000 Merger reserve $000 Hedging reserve $000 Translation reserve $000 Retained earnings $000 Shareholders' equity Non-controlling interests $000 Total
capital $000 $000
$000
At 1 April 2023 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 (note 23) - - - - - 1,432 1,432 - 1,432
Purchase of own shares (note 29) - - - - - (3,548) (3,548) - (3,548)
Options exercised (note 20) 16 - - - - (16) - - -
Exchange differences 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
Consolidated balance sheet
As at 31 March 2025
2025 2024
Note $000 $000
Non-current assets
Property, plant and equipment 8 53,558 67,062
Intangible assets 9 22,892 74,754
Right-of-use assets 10 64,969 59,115
Long-term assets 13 2,899 4,648
Deferred tax assets 11 1,306 39,099
Total non-current assets 145,624 244,678
Current assets
Assets held for sale 8 1,803 1,786
Inventory 12 172,651 165,401
Trade and other receivables 13 84,827 89,523
Income tax receivable 2,218 2,522
Derivative financial assets 24 1 68
Cash and cash equivalents 14 136,493 157,365
Total current assets 397,993 416,665
Total assets 2 543,617 661,343
Non-current liabilities
Loans and borrowings 15 (120) (817)
Lease liabilities 10 59,627 51,751
Deferred income 16 2,109 1,837
Provisions 17 2,540 2,796
Other financial liabilities 18 15,353 14,307
Deferred tax liabilities 11 73 150
Total non-current liabilities 79,582 70,024
Current liabilities
Bank overdraft 14 52,539 63,655
Loans and borrowings 15 (718) (700)
Lease liabilities 10 13,513 15,595
Deferred income 16 262 214
Provisions 17 1,741 7,527
Income tax payable 8,670 12,356
Trade and other payables 19 84,822 86,101
Other financial liabilities 18 33,036 37,084
Total current liabilities 193,865 221,832
Total liabilities 2 273,447 291,856
Net assets 270,170 369,487
Equity
Share capital 20 6,358 6,201
Share premium 222,970 217,518
Capital redemption reserve 1,734 1,692
Merger reserve 41,907 40,883
Hedging reserve (533) 42
Translation reserve (11,770) (5,740)
Retained earnings 2,220 101,022
Equity attributable to owners of the Parent Company 262,886 361,618
Non-controlling interests 7,284 7,869
Total equity 270,170 369,487
The consolidated financial statements were approved by the Board of Directors
on 28 July 2025 and were signed on its behalf by:
Rohan Cummings
Director
Consolidated cash flow statement
Year ended 31 March 2025
2025 2024
Note $000 $000
Cash flows from operating activities
(Loss)/profit for the year (99,275) 37,119
Adjustments for:
Depreciation of property, plant and equipment 8 10,679 12,326
Depreciation of right-of-use assets 10 15,505 16,470
Amortisation of intangible assets 9 2,430 3,032
Impairment/(reversal of impairment) of property, plant and equipment, 8,9,10 7,069 (553)
right-of-use assets and intangible assets
Goodwill impairment 9 48,679 -
Finance income 6 (3,098) (1,065)
Finance costs 6 5,042 6,219
Income tax charge/(credit) 7 43,744 (13,277)
(Profit)/loss on disposal of property, plant and equipment (4,542) 238
Profit on disposal of leases (70) -
Equity-settled share-based payments - expense 23 877 1,502
Operating profit after adjustments for non-cash items 27,040 62,011
Change in trade and other receivables 3,365 3,997
Change in inventory (6,338) 40,361
Change in trade and other payables, provisions and deferred income (7,864) (18,966)
Cash generated from operations 16,203 87,403
Tax paid (9,565) (5,159)
Interest and similar charges paid (2,813) (4,536)
Net cash inflow from operating activities 3,825 77,708
Cash flow from investing activities
Proceeds from sale of property, plant and equipment 8,837 782
Acquisition of business 28 - (496)
Acquisition of intangible assets 9 (627) (442)
Acquisition of property, plant and equipment 8 (6,121) (10,254)
Net cash inflow/(outflow) from investing activities 2,089 (10,410)
Cash flows from financing activities
Purchase of own shares 29 - (3,548)
Lease liabilities principal repayments 10 (16,504) (18,422)
Loan arrangement fees 14 - (2,045)
Dividends paid to non-controlling interests (668) -
Net cash outflow from financing activities (17,172) (24,015)
Net (decrease)/increase in cash and cash equivalents (11,258) 43,283
Cash and cash equivalents and bank overdrafts at beginning of the year 14 93,710 50,234
Effect of exchange rate fluctuations on cash held 1,502 193
Cash and cash equivalents and bank overdrafts at end of the year 14 83,954 93,710
Notes to the consolidated financial statements
Year ended 31 March 2025
1 Accounting policies
a. Basis of preparation
The consolidated financial statements of IG Design Group plc have been
prepared in accordance with UK-adopted International Accounting Standards and
with the requirements of the Companies Act 2006 applicable to companies
reporting under those standards.
The financial statements have been prepared under the historical cost
convention, except for certain financial instruments that are measured at fair
value, as explained in the accounting policies below. The Group financial
statements are presented in US dollars, and all values are rounded to the
nearest thousand, unless otherwise stated.
The preparation of financial statements 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 (see critical accounting
judgements and estimates section below). 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. The Company's
ordinary shares are listed on the Alternative Investment Market (AIM).
The financial statements are prepared under the historical cost convention
except for derivative financial instruments which are measured at fair value
and defined benefit pension plans where plan assets are measured at fair value
and obligations are valued in accordance with IAS 19 Employee Benefits.
The financial information set out in this document does not constitute
statutory accounts for IG Design Group plc for the year ended 31 March 2025
but is extracted from the Annual Report and Financial Statements. The Annual
Report and Financial Statements 2025 will be delivered to the Registrar of
Companies in due course. The auditors' report on those accounts was
unqualified and neither drew attention to any matters by way of emphasis nor
contained a statement under either Section 498(2) of Companies Act 2006
(accounting records or returns inadequate or accounts not agreeing with
records and returns), or section 498(3) of Companies Act 2006 (failure to
obtain necessary information and explanations).
The accounting policies used in the preparation of these financial statements
are detailed below. These policies have been consistently applied to all
financial years presented.
Presentation currency
The presentation 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. As such, the Parent Company's functional and presentational currency
differs to that of the Group's reporting currency.
Seasonality of the business
The business of the Group is seasonal and although revenues 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 and distribution 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.
Going concern
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 this report. This expectation is based on the Directors' assessment of
the Group's current financial position and future cash flow forecasts over the
going concern period. The assessment also considers the structure of the
Group's current borrowing facilities. In forming this view, the Directors have
also considered the Group's liquidity headroom, its ability to adapt to
changes in market conditions, and its capacity to manage principal business
risks over the forecast period.
On 11 July 2025, the Group entered into a new Receivables Finance facility
with HSBC and NatWest, replacing its previous Asset Backed Lending (ABL)
arrangement. The new facility is a minimum three-year agreement and provides
funding capacity based on the level of eligible receivables across
participating Group companies. The facility is subject to certain operational
covenants but not financial covenants.
In connection with the implementation of this new facility, the Group's
existing £15.0 million overdraft facility was cancelled.
Further details of the facility, including cash balances and borrowings are
provided in notes 14 and 15.
The Group also has access to supplier financing arrangements offered by
certain customers, which it may utilise at specific times of the year. These
arrangements are subject to the continuing support of the customers' banking
partners and could therefore be withdrawn at short notice. Under the terms of
the Group's Receivables Finance facility, the use of such supplier financing
arrangements requires prior written consent from the facility lenders.
The Directors have assessed detailed forecasts through to 30 September 2026.
These reflect the disposal of the DG Americas business, the reduced volatility
in profitability and cash generation across the remaining Group, and continued
progress towards more consistent and robust financial performance. The
forecasts also take into account the seasonal nature of the Group's
operations.
These forecasts have been sensitised to reflect severe but plausible adverse
scenarios. Specifically, the scenarios considered the following risks:
· a potential loss of significant trading with a major customer,
modelled as an estimated $10.9 million reduction in sales, with associated
impacts on cash flow, facility availability, and working capital;
· a sustained period of inflation in freight rates, resulting in
approximately $4.7 million of additional costs and related cash outflows; and
· the occurrence of a cyber security incident during peak trading
periods, modelled as a temporary $23.0 million reduction in receivables,
affecting both liquidity and availability under the Group's receivables-based
facility.
In the severe but plausible scenarios modelled, there remains sufficient
headroom in our forecast liquidity and sufficient headroom.
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.
Changes in accounting policies
There have been no changes to accounting policies during the year.
Other standards and interpretations
The Group also adopted the following new standards and amendments at the start
of the year, which did not have any material impact on the Group's financial
statements:
· Classification of Liabilities as Current or Non-current and
Non-current liabilities with covenants - Amendments to IAS 1;
· Lease Liability in Sale and Leaseback - Amendments to IFRS 16; and
· Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7.
Certain new accounting standards and interpretations have been published that
are not yet effective and have not been early adopted by the Group. These
standards are not expected to have a material impact on the entity in the
current or future reporting periods and on foreseeable future transactions:
· Amendments to IAS 21 - Lack of Exchangeability (effective for
annual periods beginning on or after 1 January 2025);
· Amendments to the Classification and Measurement of Financial
Instruments - Amendments to IFRS;
· IFRS 19 Subsidiaries without Public Accountability: Disclosures
(effective for annual periods beginning on or after 1 January 2027);
· IFRS 18 Presentation and Disclosure in Financial Statements
(effective for annual periods beginning on or after 1 January 2027).
b. Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the
Group is exposed, or has rights, to variable returns from its involvement with
the investee and has the ability to affect those returns through its power
over the investee.
Specifically, the Group controls an investee if, and only if, the Group has
power over the investee (i.e. existing rights that give it the current ability
to direct the relevant activities of the investee), exposure, or rights, to
variable returns from its involvement with the investee and the ability to use
its power over the investee to affect its returns. The financial statements of
subsidiaries, which we consider the Group to have control, are included in the
consolidated financial statements from the date that control commences until
the date that control ceases.
(ii) Transactions eliminated on consolidation
Intragroup balances and any unrealised gains and losses or income and expense
arising from intragroup transactions are eliminated in preparing the
consolidated financial statements.
(iii) Business combinations
Business combinations are accounted for using the acquisition method as at the
date on which control is transferred to the Group.
The Group measures goodwill at the acquisition date as:
· the fair value of the consideration transferred; plus
· the recognised amount of any non‑controlling interests in the
acquiree; plus
· if the business combination is achieved in stages, the fair value
of the existing equity interest in the acquiree; less
· the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
When the result is negative, a 'bargain purchase' gain is recognised
immediately in the income statement.
Provisional fair values allocated at a reporting date are finalised within
twelve months of the acquisition date.
c. Foreign currency
Items included in the financial statements of the Group's subsidiaries are
measured using the currency of the primary economic environment in which the
subsidiary operates ('functional currency').
The consolidated financial statements are presented in US dollars.
(i) Foreign currency transactions
Transactions in foreign currencies are recorded at the rate of exchange at the
date of the transaction. Monetary assets and liabilities denominated in
foreign currencies at the balance sheet date are translated into the
functional currency of the entity at the exchange rate prevailing at that date
and recognised in the income statement unless hedge accounting criteria apply
(see policy for financial instruments).
(ii) Financial statements of foreign operations
The assets and liabilities of foreign operations, including goodwill and fair
value adjustments arising on consolidation, are translated into US dollars at
the exchange rate prevailing at the balance sheet date. The revenues and
expenses of foreign operations are translated at an average rate for the
period where this rate approximates to the foreign exchange rates prevailing
at the dates of the transactions.
Share capital, share premium, capital redemption reserve and merger reserve
are denominated in pounds sterling, the Parent Company's functional currency.
They 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 reserve.
(iii) Net investment in foreign operations
Exchange differences on retranslation at the closing rate of the opening
balances of overseas entities are taken to other comprehensive income. They
are released into the income statement upon disposal of the entities.
Exchange differences arising on foreign currency borrowings and derivatives
designated as qualifying hedges are taken to other comprehensive income to the
extent that they are effective. They are released into the income statement on
maturity or disposal of the hedge.
Exchange differences arising from a monetary item receivable from or payable
to a foreign operation, the settlement of which is neither planned nor likely
in the foreseeable future, are considered to form part of a net investment in
a foreign operation and are recognised in other comprehensive income in the
translation reserve. The cumulative translation differences previously
recognised in other comprehensive income (or where the foreign operation is
part of a subsidiary, the parent's interest in the cumulative translation
differences) are released into the income statement upon disposal of the
foreign operation or on loss of control of the subsidiary that includes the
foreign operation. Other exchange differences are taken to the income
statement.
d. Financial instruments
Interest-bearing loans and borrowings and other financial liabilities
(excluding derivatives and put options over non-controlling interests) are
held at amortised cost, unless they are included in a hedge accounting
relationship.
Derivatives are measured initially at fair value. Subsequent measurement in
the financial statements depends on the classification of the derivative as
follows:
(i) Fair value hedges
Where a derivative is used to hedge the foreign exchange exposure of a
monetary asset or liability, any gain or loss on the derivative is recognised
in the income statement.
(ii) Cash flow hedges
Where a derivative is designated as a hedging instrument in a cash flow hedge,
the change in fair value is recognised in other comprehensive income to the
extent that it is effective and any ineffective portion is recognised in the
income statement. Where the underlying transaction results in a financial
asset, accumulated gains and losses are recognised in the income statement in
the same period as the hedged item affects profit or loss.
Where the hedged item results in a non-financial asset, the accumulated gains
and losses previously recognised in other comprehensive income are included in
the initial carrying value of the asset.
(iii) Unhedged derivatives
The movements in the fair value of unhedged derivatives are charged/credited
to the income statement.
The potential cash payments relating to put options issued by the Group over
the non-controlling interest of subsidiary companies acquired are measured at
estimated fair value and accounted for as financial liabilities. Subsequent to
initial recognition, any changes to the carrying amount of non‑controlling
interest put option liabilities are recognised through equity.
e. Cash and cash equivalents
Cash and cash equivalents comprise of cash balances, the borrowing base
available under the HSBC cash pooling facility and bank overdrafts that are
repayable on demand. These form an integral part of the Group's cash
management and are included as part of cash and cash equivalents in the
statement of cash flows. See note 14, 15 and 24.
f. Loans and borrowings
Loans and borrowings are initially measured at cost (which is equal to fair
value at inception) and are subsequently measured at amortised cost using the
effective interest method.
g. Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently
measured at amortised cost, which is generally equivalent to recognition at
nominal value less impairment loss calculated using the expected loss model.
The Group applies a simplified model to recognise lifetime expected credit
losses for its trade receivables and other receivables, including those due in
greater than twelve months, by making an accounting policy election. For any
receivables not expected to be paid, an expected credit loss of 100% is
recognised at the point this expectation arises. For all other receivables,
the expected loss is calculated based on reasonable and supportable
information that is relevant and available without undue cost or effort. This
includes both quantitative and qualitative information and analysis, based on
the Group's historical experience and informed credit assessment and including
forward‑looking information.
h. Trade and other payables
Trade payables are non-interest bearing and are recognised initially at fair
value and subsequently at amortised cost.
i. Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and impairment losses. Where parts of an item of property, plant and equipment
or other assets have different useful lives, they are accounted for as
separate items. The carrying values of property, plant and equipment and other
assets are periodically reviewed for impairment when events or changes in
circumstances indicate that the carrying values may not be recoverable.
Property, plant and equipment are depreciated over their estimated remaining
useful lives on a straight-line basis using the following estimated useful
lives:
Land and buildings
- Freehold land Not depreciated
- Buildings 25-30 years or life of lease
Plant and equipment 4-25 years
Fixtures and fittings 3-5 years
Motor vehicles 4 years
The assets' useful lives and residual values are reviewed, and adjusted if
appropriate, at each balance sheet date. Included within plant and equipment
are assets with a range of depreciation rates. These rates are tailored to the
nature of the assets to reflect their estimated useful lives.
Where the Group identifies assets held for sale, they are held at the lower of
current value and fair value less costs to sell.
j. Lease liabilities and lease right‑of-use assets
The Group leases various offices, warehouses, equipment and motor vehicles.
Rental contracts are typically made for fixed periods of one to 20 years but
may have extension options as described below. Lease terms are negotiated on
an individual basis and contain a wide range of different terms and
conditions. The lease agreements do not impose any covenants, but leased
assets may not be used as security for borrowing purposes.
Leases greater than twelve months in length, and those not of low value, are
recognised as a lease right-of‑use asset with the associated future lease
payment terms recognised as a lease liability. The right-of-use assets and the
associated lease liabilities are recognised by unwinding the future lease
payments at the rate implicit to the lease or, if the rate implicit to the
lease cannot be readily determined, at the relevant incremental borrowing
rate.
Lease liabilities include the net present value of the following lease
payments:
· fixed payments (including in substance fixed payments), less any
lease incentives receivable;
· amounts expected to be payable by the lessee under residual value
guarantees;
· the exercise price of a purchase option if the lessee is reasonably
certain to exercise that option; and
· payments of penalties for terminating the lease, if the lease term
reflects the lessee exercising that option.
The lease right-of-use assets are amortised over their useful economic lives
or the lease term, whichever is shorter. The lease liabilities are
derecognised by applying the future lease payments.
Extension and termination options are included in a number of property and
equipment leases across the Group. These terms are used to maximise
operational flexibility in terms of managing contracts. The majority of
extension and termination options held are exercisable only by the Group and
not by the respective lessor. In determining the lease term, management
considers all facts and circumstances that create an economic incentive to
exercise an extension option, or not exercise a termination option. Extension
options (or periods after termination options) are only included in the lease
term if the lease is reasonably certain to be extended (or not terminated).
The assessment is reviewed if a significant event or a significant change in
circumstances occurs which affects this assessment and that is within the
control of the lessee.
Rentals associated with leases that are of low value or less than twelve
months in length are expensed to the income statement on a straight-line
basis. The associated lease incentives are amortised in the income statement
over the life of the lease.
On acquisition, right-of-use assets and lease liabilities are recognised in
accordance with IFRS 16. The acquired lease liability is measured as if the
lease contract was a new lease at the acquisition date. The right-of-use asset
is measured at an amount equal to the recognised lease liability.
The right‑of‑use asset is adjusted to reflect any favourable or
unfavourable terms of the lease relative to market terms.
Right-of-use assets are impaired in line with the impairment accounting policy
below.
k. Intangible assets
(i) Goodwill
Goodwill is stated at cost less any impairment losses.
Acquisitions are accounted for using the purchase method. For acquisitions
that have occurred since 1 January 2004, goodwill represents the difference
between the fair value of the assets given in consideration and the fair value
of identifiable assets, liabilities and contingent liabilities of the
acquiree. For acquisitions made before 1 January 2004, goodwill is included on
the basis of its deemed cost, which represents the amount previously recorded
under UK GAAP.
The Group has expensed costs attributable to acquisitions in the income
statement. Given their one‑off nature, these costs are generally presented
within adjusting items.
(ii) Acquired intangible assets
An intangible asset acquired in a business combination is recognised at fair
value. Intangible assets principally relate to customer relationships, which
are valued using discounted cash flows based on historical customer attrition
rates, and trade names/brand, which are valued using an income approach.
The cost of intangible assets is amortised through the income statement on a
straight‑line basis over their estimated useful economic life and as these
are assets directly attributed to the acquisition of a business, the
amortisation costs are also presented within adjusting items.
(iii) Other intangible assets
Other intangible assets which are not acquired through a business combination
are recognised at cost, to the extent it is probable that the expected future
economic benefits attributable to the asset will flow to the Group and that
its cost can be measured reliably, and amortised on a straight-line basis over
their estimated useful economic life.
Intangibles are amortised over their estimated remaining useful lives on a
straight-line basis as follows:
Goodwill Not amortised
Computer software 3-5 years
Trade names 3-5 years
Customer relationships 3-15 years
Other intangibles 3-5 years
Customer relationships are wide ranging in useful economic lives, from shorter
relationships derived from smaller acquisitions to the long relationship with
Walmart acquired as part of the acquisition of Impact Innovations, Inc.
('Impact') in August 2018.
l. Impairment
All assets are reviewed regularly to determine whether there is any indication
of impairment. Goodwill is tested for impairment annually.
An impairment loss is recognised whenever the carrying amount of a
non‑financial asset or the cash‑generating unit (CGU) to which it belongs
exceeds its recoverable amount, being the greater of value in use and fair
value less costs to sell and is recognised in the income statement. Value in
use is estimated based on future cash flows discounted using a pre-tax
discount rate based upon the Group's weighted average cost of capital.
Financial assets are assessed for impairment using the expected credit loss
model which requires expected credit losses and changes to expected credit
losses at each reporting date to reflect changes in credit risk since initial
recognition.
The reversal of an impairment loss should be recognised if there has been a
sustainable change in the estimates used to determine the asset's recoverable
amount since the last impairment test was carried out. Impairment losses
relating to goodwill are not permitted to be reversed.
m. Inventories
Inventories are valued at the lower of cost (on a weighted average basis) and
net realisable value. For work‑in‑progress and finished goods, cost
includes an appropriate proportion of labour cost and overheads based on
normal operating capacity. For acquisitions, inventory acquired will be
assessed for fair value in accordance with IFRS 3 and if applicable an uplift
applied to inventory on hand relating to sales orders already attached to the
acquired inventory. The unwind of the uplift in value is treated as an
adjusting item.
n. Income tax
Income tax in the income statement comprises current and deferred tax. Income
tax is recognised in the income statement except to the extent that it relates
to items recognised in equity or other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year
using the applicable tax rates enacted or substantively enacted at the balance
sheet date and any adjustment to tax payable in prior years. Deferred tax is
provided, using the balance sheet liability method, on temporary differences
arising between the tax bases and the carrying amounts of assets and
liabilities in the financial statements.
The following temporary differences are not provided for: initial recognition
of goodwill not deductible for tax purposes; the initial recognition of assets
or liabilities that affect neither accounting nor taxable profit or loss other
than in a business combination; and differences relating to investments in
subsidiaries to the extent that they will not reverse in the foreseeable
future.
Deferred tax is determined using tax rates that are expected to apply when the
related deferred tax asset or liability is settled, using the applicable tax
rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profit will be available against which the asset can be
utilised. Deferred tax assets are impaired to the extent that it is no longer
probable that the related tax benefits will be realised.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against liabilities and when
they relate to income taxes levied by the same tax authority and the Group
intends to settle its current tax assets and liabilities on a net basis.
o. Revenue
Revenue from the sale of goods is recognised in the income statement net of
expected discounts, rebates, refunds, credits, price concessions or other
similar items, when the associated performance obligation has been satisfied,
and control of the goods has been transferred to the customer.
The Group recognises revenue on sales of Gift packaging, Party, Goods not for
resale, Craft, Stationery and Homeware consumable products across two
reporting segments.
Typically, the products that we supply form the only performance obligations
within a customer agreement, and although the Group can provide ancillary
services such as merchandising, these are not separately identifiable
obligations. Each customer arrangement/contract is assessed to identify the
performance obligations being provided to the customer. Where distinct
performance obligations are deemed to exist, an element of revenue is
apportioned to that obligation.
Revenue from sales is recognised based on the price specified in the contract,
net of any estimated volume discounts, rebates and sell-through provisions.
Accumulated experience is used to estimate and provide for these discounts,
using the expected value method, and revenue is only recognised to the extent
that it is highly probable that a significant reversal will not occur. A
refund liability (included in trade and other payables) is recognised for
these items payable to customers based on sales made in the period. No
significant element of financing is deemed present as the majority of sales
are made with credit terms of 30‑120 days, which is consistent with market
practice.
A significant part of the Group's businesses sell goods on a
'free‑on‑board' (FOB) basis, where the Group as the seller makes its goods
ready for collection at its premises on an agreed upon sales date and the
buyer incurs all transportation and handling costs and bears the risks for
bringing the goods to their chosen destination. In this situation, revenue is
recognised on collection by the customer.
Where the Group operates non‑FOB terms with customers, revenue is recognised
when the control of the goods has been transferred to the customer. These
terms include consignment stock agreements, where revenue is recognised upon
the customer removing goods from consignment stock.
p. Finance income and costs
Finance income and expense is recognised in the income statement as it
accrues. Finance costs comprise interest payable, finance charges on finance
leases, interest on lease liabilities, amortisation of capitalised fees and
unwinding of discounts on provisions. Net movements in the fair value of
derivatives which have not been designated as an effective hedge, and any
ineffective portion of fair value movement on derivatives designated as a
hedge, are also included within finance income or expense.
q. Supplier financing
The Group is party to supplier financing arrangements with one of its key
customers. This arrangement is considered non-recourse factoring and on
receipt of payment from the banks the associated trade receivable is
derecognised in accordance with IFRS 9.
r. Segment reporting
A segment is identified on the basis of internal reports that are regularly
reviewed by the Board in order to allocate resources to the segment and assess
its performance.
s. Pensions
(i) Defined contribution schemes
Obligations for contributions to defined contribution pension schemes are
expensed to the income statement as incurred.
(ii) Defined benefit schemes
Two pension schemes, one of which is in the Netherlands and the other in the
UK, are defined benefit schemes.
The Netherlands subsidiary operates an industrial defined benefit fund, based
on average wages, that has an agreed maximum contribution. The pension fund is
a multi‑employer fund and there is no contractual or constructive obligation
for charging the net defined benefit cost of the plan to participating
entities other than an agreed maximum contribution for the period, that is
shared between employer (4/7) and employees (3/7).
The Dutch Government is not planning to make employers fund any deficits in
industrial pension funds; accordingly, the Group treats the scheme as a
defined contribution scheme for disclosure purposes. The Group recognises a
cost equal to its contributions payable for the period.
The Group also administers a defined benefit scheme in the UK.
The net obligation for this scheme is calculated by estimating the amount of
the future benefit that employees have earned in return for their service in
the current and prior periods; that benefit is discounted to determine its
present value, and the fair value of the scheme assets is deducted. The
calculation is performed by a qualified independent actuary.
t. Share-based payments
The cost of equity-settled transactions with employees is measured by
reference to the fair value of the options at the date on which they are
granted. The fair value is determined by using an appropriate pricing model.
The fair value cost is then recognised over the vesting period, ending on the
date on which the relevant employees become fully entitled to the award.
The quantum of awards expected to vest and the relevant cost charged is
reviewed annually such that at each balance sheet date the cumulative expense
is the relevant share of the expected total cost, pro-rated across the vesting
period.
No expense is recognised for awards that are not expected to ultimately vest,
for example due to an employee leaving or business performance targets not
being met. The annual expense for equity-settled transactions is recognised in
the income statement with a corresponding entry in equity.
In the event that any scheme is cancelled, the Group recognises immediately
the amount that otherwise would have been recognised for services received
over the remainder of the vesting period. The Group calculates this charge
based on the number of the awards expected to achieve the performance
conditions immediately before the award was cancelled.
Employer social security charges are accrued, where applicable, at a rate
which management expects to be the prevailing rate when share‑based
incentives are exercised and is based on the latest market value of options
expected to vest or those already vested.
Deferred tax assets are recognised in respect of share-based payment schemes
when deferred tax assets are recognised in that territory.
u. Investment in own shares
The shares held in the Group's Employee Benefit Trust (IG Employee Share
Trustee Limited) for the purpose of fulfilling obligations in respect of share
option plans are treated as belonging to the Company and are deducted from its
retained earnings. The cost of shares held directly (treasury shares) is also
deducted from retained earnings.
v. Provisions
A provision is recognised when there is a probable legal or constructive
obligation as a result of a past event and a reliable estimate can be made of
the outflow of resources that will be required to settle the obligation. If
the effect is material, provisions are determined by discounting the expected
future cash flows at a pre‑tax rate that reflects current market
assessments of the time value of money and, where appropriate, the risks
specific to the liability.
Where discounting is used, the increase in the provision due to the passage of
time is recognised as finance costs.
w. Government grants
Government grants are recognised when it is reasonable to expect that the
grants will be received and that all related conditions will be met, usually
on submission of a valid claim for payment. Government grants in respect of
capital expenditure are included within deferred income on the balance sheet
and are released to the income statement on a straight-line basis over the
expected useful lives of the relevant assets.
x. Dividends
Dividends are recognised as a liability in the period in which they are
approved by the shareholders of the Company (final dividend) or paid (interim
dividend).
y. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or
production of an asset that necessarily takes a substantial period of time to
get ready for its intended use or sale are capitalised as part of the cost of
the respective asset. Costs directly attributable to the arrangement of new
borrowing facilities are included within the fair value of proceeds received
and amortised over the life of the relevant facilities. Other borrowing costs,
which can include costs associated with the extension of existing facilities,
are expensed in the period they occur.
Borrowing costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds.
z. Like-for-like comparators
Figures quoted at like-for-like exchange rates are calculated by retranslating
the prior year figures at the current year exchange rates.
Use of non-GAAP measures (APMs)
These financial statements include alternative performance measures (APMs)
that are presented in addition to the standard GAAP 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 factors which affect 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.
The APMs and their definitions are:
· 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 operating margin - adjusted operating profit divided by
revenue;
· 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;
· basic adjusted earnings/(loss) per share - basic 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 adjusting items;
· net cash - cash and cash equivalents, bank overdrafts and loan
arrangement fees;
· 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;
· cash conversion - adjusted cash generated from operations divided
by adjusted EBITDA;
Adjusting items are items that are material and/or, in the judgement of the
Directors, of an unusual or non‑recurring nature. These items are adjusted
to present 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. They
are 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) including fair value
adjustments to acquisitions.
Adjusting items
Impairment of assets((1)) Integration and restructuring cost Release of provisions for Amortisation of acquired intangibles((4)) Derecognition of deferred tax assets((5)) Adjusting items
pre-acquisition duties((3))
/(income)((2))
Year ended 31 March 2025 $000 $000 $000 $000 $000 $000
Cost of sales 3,750 2,845 (568) - - 6,027
Selling expenses - 783 - - - 783
Administration expenses 1,723 7,330 - 1,752 - 10,805
Goodwill impairment 48,679 - - - - 48,679
Other operating income - (4,713) (2,774) - - (7,487)
Adjustments to operating profit/loss 54,152 6,245 (3,342) 1,752 - 58,807
Other finance expenses/(income) - 240 (1,579) - - (1,339)
Adjustments to profit/loss before tax 54,152 6,485 (4,921) 1,752 - 57,468
Adjusting tax charge/(credit) - (217) - - 37,409 37,192
54,152 6,268 (4,921) 1,752 37,409 94,660
Impairment of assets((1)) Integration and restructuring cost/(income)((2)) Release of provisions for Amortisation of acquired intangibles((4)) Recognition of deferred tax assets((5)) Adjusting items
pre-acquisition duties((3))
Year ended 31 March 2024 $000 $000 $000 $000 $000 $000
Cost of sales - 548 - - - 548
Administration expenses - (249) - 1,803 - 1,554
Adjustments to operating profit/loss - 299 - 1,803 - 2,102
Adjusting tax charge/(credit) - (41) - (451) (21,313) (21,805)
- 258 - 1,352 (21,313) (19,703)
Adjusting items are separately presented by virtue of their nature, size
and/or incidence. 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 relate to the following transactions:
(1) Impairment of assets
In the year an impairment of $54.2 million (2024: $nil) has been recorded to
write-down $48.7 million goodwill on acquisition of DG Americas, $1.7 million
of DG Americas' intangible assets and $3.8 million in its plant and machinery.
Following the recent deterioration in the performance of DG Americas -
including the Group's fourth-largest customer entering Chapter 11 bankruptcy -
the revised long-term cash flow forecasts have led to the recognition of an
impairment. The impairment was determined based on the fair value of assets
less costs to sell. Further details are provided in note 9. (2024: $nil).
(2) Integration and restructuring cost/(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 projects are
outside of the normal operations of the business and typically incur one-off
costs to ensure successful implementation, therefore the management classifies
them as adjusting items. The costs incurred in FY2025 and FY2024 relate to DG
Americas and DG UK (and its subsidiary in Asia) businesses:
DG Americas business reorganisation
In FY2025, DG Americas incurred $2.1 million in staff-related restructuring
expenses (2024: $0.6 million). An additional $1.1 million was spent on site
rationalisation, including $0.2 million for consolidating warehouses in South
Centre and Hagerstown, and a $0.8 million lease impairment from existing
properties. A further $0.6 million was incurred on a legal entity
rationalisation project aimed at simplification of the DG Americas legal
structure.
In FY2024, comparable staff-related costs amounted to $0.6 million.
DG Americas site sales proceeds
On 11 March 2025, DG Americas completed the sale of a former distribution
facility located in Bloomsburg, Pennsylvania. The facility was sold for a
total consideration of $8.4 million. The carrying value of the asset was $2.9
million, and the Group incurred selling costs and taxes amounting to $0.6
million. As a result, the Group recognised a profit on disposal of $4.9
million. This asset was classified as held for sale in the Group's HY2025
financial statements.
China site closure
In June 2024, the Group announced the closure of Huizhou Gift International
Greetings Co. Ltd, a subsidiary of DG plc. During the year, $5.7 million of
restructuring costs were incurred in connection with the closure. These
comprised $3.9 million of staff-related costs, $0.8 million of asset
write-downs, $0.4 million of third-party security costs, and $0.6 million of
other closure-related expenses.
The asset write-down resulted from the reclassification of certain assets as
held for sale, triggered by the closure decision. These assets were measured
at the lower of carrying amount and fair value less costs to sell, in
accordance with IFRS 5 and based on Level 2 inputs of the fair value
hierarchy, as outlined in note 8. As these costs were directly related to the
site closure and not part of the Group's ongoing operations, they have been
treated as adjusting items.
DG UK business reorganisation
$0.7 million was spent on a consolidation project involving DG UK and DG
Americas' Far East sourcing offices (2024: $0.2 million). Further costs of
$0.2 million were incurred by the DG UK business in relation to a vacant site
held for sale, as part of a wider business reorganisation announced in March
2023.
DG Australia site relocation
In FY2025, DG Australia relocated its warehousing operations from a
long-standing leased facility to a newly secured site. Relocation costs
totalled $0.9 million, including $0.6 million of lease-related expenses for
the new warehouse, $0.2 million of which were classified as other finance
expenses. During the transition, the business incurred double-running costs,
as it remained contractually committed to the previous site while establishing
full operational capability at the new location. These costs have been treated
as adjusting items due to their non-recurring nature and direct link to the
relocation. The full operational capability at the new facility is expected to
be achieved in the first half of 2026.
Reversal of impairment (2024)
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 of $0.6
million.
(3) Release of provisions for pre-acquisition duties
In prior years, management recognised a provision relating to duties,
penalties and interest associated with pre-acquisition periods, based on
significant estimates and assumptions. These included assessments of
historical data, interpretations of relevant tax and legal regulations, and
potential outcomes of engagement with the customs authorities. Given the
complexity and uncertainty involved, management engaged external legal and tax
advisers to ensure the provisions reflected the most probable outcomes.
As previously disclosed, the initial provision comprised three elements: $0.7
million for duties, $1.9 million for interest, and $2.8 million for penalties.
During FY2025, following further legal and regulatory clarification, a payment
of $0.4 million was made in respect of duties and interest. Management,
supported by updated external advice, determined that the remaining provision
was no longer required. The matter is considered concluded with the relevant
authorities, and the full balance was released to income in the current year.
(4) Amortisation of acquired intangibles
Under UK-adopted international accounting standards, business combinations
require the recognition of acquired intangible assets such as customer
relationships and trade names. These are amortised over their useful lives,
with charges recognised in the income statement. As these charges arise as a
result of acquisition accounting and do not reflect the underlying trading
performance of the Group or the acquired business, they are excluded from
adjusted measures to provide a more consistent basis for comparing performance
across periods.
For the year ended 31 March 2025, amortisation of $1.8 million (2024: $1.8
million) related to intangible assets recognised on the acquisition of Impact
Innovations, Inc.
(5) Derecognition of deferred tax assets
Deferred tax assets are recognised only to the extent that it is probable they
will be recovered through the reversal of deferred tax liabilities or the
generation of future taxable profits, in accordance with IAS 12. As part of
the Group's annual review of recoverability, and reflecting updated forecasts
for DG Americas, management determined that sufficient future taxable profits
are no longer probable within the region. Consequently, $37.4 million of
previously recognised deferred tax assets have been derecognised in the
current year.
The cash flow effect of adjusting items
There was a $0.3 million net outflow in the current period's cash flow (2024:
$2.1 million net outflow) relating to adjusting items which included $0.2
million outflow (2024: $1.5 million) deferred from prior years.
Key accounting judgements and estimates
The following provides information on those policies that management considers
key because of the level of judgement and estimation required which often
involves assumptions regarding future events which can vary from what is
anticipated. The Directors believe that the financial statements reflect
appropriate judgements and estimates and provide a true and fair view of the
Group's performance and financial position.
The following are the critical judgements, apart from those involving
estimations (which are dealt with separately below), that the Directors have
made in the process of applying the Group's accounting policies and that have
the most significant effect on the amounts recognised in the financial
statements.
Accounting judgements
(i) Adjusting items
Judgement is required to determine whether items are appropriately classified
as adjusting items and that the values assigned are appropriate. Adjusting
items relate to impairments of assets, costs associated with acquisitions or
disposals, and significant items by virtue of their size or incidence.
Adjusting items are approved by the Board.
(ii) Taxation
Judgement is required in determining the Group's tax assets and liabilities.
Deferred tax assets have been recognised to the extent that management believe
that they are recoverable based on profit projections for future years.
These forecasts are consistent with those used elsewhere in the financial
statements (including impairment). Note 11 provides information on the gross
temporary differences and unused tax losses on which deferred tax assets have
not been recognised.
Accounting estimates
(i) Lease asset impairments
The Group has impaired the right‑of‑use assets in respect of several
properties that the Group has exited as part of the ongoing DG Americas
integration. This is based on the properties themselves being a CGU in line
with IAS 36 as they are being actively marketed for sub‑tenants.
The impairments are assessed at each reporting date and if necessary reversed
should there be available sub‑tenants for the properties, or early
termination agreed with the landlord.
The Group considers the impairment values to be immaterial.
(ii) Provision for slow-moving inventory
The Group has guidelines for providing for inventory which may be sold below
cost due to its age or condition.
The Directors assess the inventory at each location and in some cases decide
that there are specific reasons to provide more than the guideline levels, or
less if there are specific action plans in place which mean the guideline
provision level is not required. Determining the level of inventory provision
requires an estimation of likely future realisable value of the inventory in
various time frames and comparing with the cost of holding inventory for those
time frames.
This is an estimate and is based on best data at the time of recognition.
Regular monitoring of inventory levels, the ageing of inventory and the level
of the provision is carried out by the Directors to reassess this estimate.
The assumptions made in relation to the current period are consistent with
those in the prior year. As at 31 March 2025, inventory provisions were $32.9
million against a gross inventory value of $205.7 million (2024: $31.1
million provision, $196.5 million gross inventory value).
This provision estimate is subject to potential material change, for example
if market conditions change because expected customer demand fluctuates, or
shipping delays reduce our ability to deliver on time and in full.
Further to this, we performed a sensitivity analysis, assessing the impact of
a movement of 7% in either direction. 7% reflects the highest movement level
in five years and this was over Covid-19 which saw exceptional movements. The
results indicated a potential stock provision movement ranging from $35.2
million to $30.7 million. However, given that every year-on-year movement
since Covid-19 has been no more than 1%, we believe the risk of a material
movement is low.
(iii) Provision for pre-acquisition duties
In prior years, management recognised a provision relating to duties,
penalties and interest associated with pre-acquisition periods, based on
significant estimates and assumptions. These included assessments of
historical data, interpretations of relevant tax and legal regulations, and
potential outcomes of engagement with the customs authorities. Given the
complexity and uncertainty involved, management engaged external legal and tax
advisers to ensure the provisions reflected the most probable outcomes. As
previously disclosed, the initial provision comprised three elements: $0.7
million for duties, $1.9 million for interest, and $2.8 million for penalties.
FY2025, following further legal and regulatory clarification, a payment of
$0.4 million was made in respect of duties and interest. Management, supported
by updated external advice, determined that the remaining provision was no
longer required. The matter is considered concluded with the relevant
authorities, and the full balance was released to income in the current year.
Management is satisfied that no further material liability exists in relation
to this matter, and no additional provisions have been recognised.
The Group considers this provision to be immaterial.
(iv) Impairment of goodwill/intangible assets/property, plant &
equipment
The Group tests goodwill annually for impairment, or more frequently when
there are indicators that it may be impaired. Impairment occurs when the
carrying amount of an asset exceeds its recoverable amount. The recoverable
amounts of cash-generating units (CGU) are determined as the higher of value
in use (VIU) and fair value less costs to sell (FVLCTS).
An impairment loss of $54.2 million was recognised during the year ended 31
March 2025 (2024: $nil). This includes $48.7 million relating to goodwill on
the acquisition of DG Americas, $1.7 million in intangible assets, and $3.8
million in plant and equipment. Following the recent deterioration in the
performance of DG Americas - including the Group's fourth-largest customer
entering Chapter 11 bankruptcy - the revised long-term cash flow forecasts
have led to the recognition of an impairment. The impairment was determined
based on the fair value of assets less costs to sell.
No impairment was identified for any other CGUs. Further details are provided
in note 9.
2 Segmental information
The Group has one material business activity, being the design, manufacture
and distribution of Gift packaging, Party, Goods not for resale, Craft,
Stationery and Homeware consumable 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, UK, India
and Mexico, being the overseas entities of US companies. The DG International
segment comprises the consolidation of the separately owned businesses 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
liability and cash has 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 DG International Central and eliminations
Americas((a)) Group
$000 $000 $000 $000
Year ended 31 March 2025
Revenue - external 439,544 289,721 - 729,265
- inter-segment - 78 (78) -
Total segment revenue 439,544 289,799 (78) 729,265
Segment (loss)/profit before adjusting items (15,494) 28,150 (7,436) 5,220
Adjusting items (note 1) (51,499) (7,308) - (58,807)
Operating (loss)/profit (66,993) 20,842 (7,436) (53,587)
Finance income 3,098
Finance costs (5,042)
Income tax (43,744)
Loss for the year ended 31 March 2025 (99,275)
Balances at 31 March 2025
Segment assets 266,225 203,747 73,645 543,617
Segment liabilities (120,953) (101,479) (51,015) (273,447)
Capital expenditure additions
- property, plant and equipment 2,277 3,829 15 6,121
- intangible assets - 627 - 627
- right-of-use assets 5,083 17,656 - 22,739
Depreciation - property, plant and equipment 5,884 4,769 26 10,679
Impairment - property, plant and equipment 3,750 765 - 4,515
Amortisation - intangible assets 2,350 80 - 2,430
Impairment - intangible assets 1,723 - - 1,723
Impairment - goodwill 48,679 - - 48,679
Depreciation - right-of-use assets 10,517 4,980 8 15,505
Impairment - right-of-use assets 831 - - 831
Cost of sales 400,717 227,705 (78) 628,344
Profit/(loss) on disposal of property, plant and equipment 4,574 (32) - 4,542
(a) Including overseas entities for the DG Americas operating segment.
Included in cost of sales is $6.0 million relating to adjusting items.
DG DG International Central and eliminations
Americas((a)) 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 1) (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
Profit 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)
Cost of sales 429,594 228,971 (33) 658,532
(Loss)/profit on disposal of property, plant and equipment (279) 41 - (238)
Included in cost of sales is $548,000 relating to adjusting items.
(a) Including overseas entities for the DG Americas operating segment.
· The Group has one customer that accounts for 23% (2024: 24%) of the
total Group revenues. In the year ended 31 March 2025, total sales to that
customer were $168.5 million (2024: $193.4 million). This customer falls
solely within the DG Americas operating segment above. No other single
customer accounts for over 10% of total sales.
· The assets and liabilities that have not been allocated to segments
include deferred tax assets of $1.3 million (2024: $39.1 million), income tax
receivable of $2.2 million (2024: $2.5 million), income tax payable of $8.7
million (2024: $12.4 million) and deferred tax liabilities of $73,000 (2024:
$150,000).
The Group's information about its segmental assets (non-current assets
excluding deferred tax assets and other long-term assets) and revenue by
customer destination are detailed below:
Non-current assets
2025 2024
$000 $000
USA((a)) 66,055 136,520
UK 27,882 27,713
Netherlands 25,523 27,587
Other 21,959 9,111
141,419 200,931
(a) These figures include overseas entities relating to the DG Americas
operating segment. The overseas entities element is not material, and this
information is not readily available.
Revenue by customer destination
2025 2024 2025 2024
$000 $000 % %
Americas((a)) 468,970 526,203 64 66
UK 76,469 88,827 10 11
Rest of the world 183,826 185,021 26 23
729,265 800,051 100 100
(a) Included within Americas is $442.4 million (2024: $498.5 million)
relating to the country, USA.
All revenue arose from the sale of goods.
3 Operating (loss)/profit
Included in the income statement are the following charges/(credits):
2025 2024
Note $000 $000
Depreciation of tangible fixed assets 8 10,679 12,326
Impairment of tangible fixed assets 8 4,515 -
Depreciation of right-of-use assets 10 15,505 16,470
Impairment/(reversal of impairment) of right-of-use assets 10 831 (553)
(Profit)/loss on disposal of property, plant and equipment and intangible (4,612) 238
assets
Release of deferred grant income 5 (232) (211)
Goodwill impairment 9 48,679 -
Amortisation of intangible assets - software 9 475 1,225
Amortisation of intangible assets - other 9 1,955 1,807
Impairment of other intangible assets 9 1,723 -
Sub-lease rental income 5 (758) (687)
Provision for obsolete and slow-moving inventory 12 16,240 13,422
Reversal of previous write downs of inventory 12 (4,255) (4,548)
Loss on foreign exchange 373 835
2025 2024
$000 $000
Operating (loss)/profit analysed as:
Adjusted operating profit 5,220 31,098
Adjusting items (58,807) (2,102)
Operating (loss)/profit (53,587) 28,996
Auditors' remuneration:
2025 2024
$000 $000
Amounts receivable by auditor and its associates in respect of:
Audit of these financial statements 1,637 1,610
Audit of financial statements of subsidiaries pursuant to legislation
- Overseas subsidiaries 81 155
Other audit related assurance services - review of interim report 122 117
4 Staff numbers and costs
The average monthly number of persons employed by the Group (including
Directors) during the year, analysed by category, was as follows:
Number of employees
2025 2024
Selling and administration 940 1,105
Production and distribution 1,440 1,661
Temporary and agency staff 410 535
2,790 3,301
The aggregate payroll costs of these persons were as follows:
2025 2024
Note $000 $000
Wages and salaries 136,958 147,261
Share-based payments 23 877 1,502
Social security costs 13,761 13,878
Other pension costs 2,828 2,950
Temporary employee costs 11,803 10,662
166,227 176,253
For information on Directors' remuneration please refer to the section titled
'Directors' remuneration' within the Directors' remuneration report which
forms part of these audited financial statements.
5 Other operating income
2025 2024
$000 $000
Profit/(loss) on disposal of property, plant and equipment 4,542 (238)
Release of provisions for pre-acquisition duties 2,774 -
Sub-lease rental income 758 687
Grant income 232 211
Profit on disposal of leases 70 -
Insurance income - 850
Other 112 155
8,488 1,665
6 Finance income and costs
2025 2024
Finance income $000 $000
Release of provisions for interest on pre-acquisition duties 1,579 -
Interest receivable on bank deposits 1,381 971
Derivative financial instruments at fair value through the income statement 138 94
3,098 1,065
2025 2024
Finance costs $000 $000
Lease liability interest 2,485 2,336
Interest on customer financing 1,163 1,469
Amortisation of loan arrangement fees 708 779
Interest payable on bank loans and overdrafts 605 1,567
Unwinding of fair value discounts 81 68
5,042 6,219
7 Income tax charge/(credit)
Recognised in the income statement
2025 2024
$000 $000
Current tax charge
Current year 5,754 10,295
Adjustments in respect of previous years 319 236
6,073 10,531
Deferred tax charge/(credit)
Derecognition/(recognition) of deferred tax assets 37,761 (21,313)
Origination and reversal of temporary differences (81) (1,165)
Adjustments in respect of previous periods (9) (1,330)
37,671 (23,808)
Total tax charge/(credit) in income statement 43,744 (13,277)
Total tax charge on adjusting items
Total tax on profit/loss before adjusting items 6,552 8,528
Total tax on adjusting items 37,192 (21,805)
Total tax charge/(credit) in income statement 43,744 (13,277)
Reconciliation of effective tax rate
2025 2024
$000 $000
(Loss)/profit before tax (55,531) 23,842
(Loss)/profit before tax multiplied by the standard rate of corporation tax of (13,883) 5,961
25% in the UK (2024: 25%)
Effects of:
Income not taxable (1,249) (11)
Expenses not deductible for tax purposes 151 1,018
Differences between UK and overseas tax rates 400 (137)
Movement in uncertain tax provisions 243 1,585
Derecognition/(recognition) of deferred tax assets 37,761 (21,313)
Other items 6 (36)
Adjustments in respect of previous periods 310 (1,094)
Current year losses for which no deferred tax asset is recognised 20,005 750
Total tax charge/(credit) in income statement 43,744 (13,277)
See note 11 for further details.
OECD Pillar Two
On 20 June 2023, the government of the UK, where the ultimate Parent Company
of the Group is incorporated, substantively enacted the Pillar Two income
taxes legislation, effective for accounting periods beginning on 1 January
2024. Under the legislation, the Parent Company is required to pay, in the UK,
a top-up tax on profits of its subsidiaries that are taxed at an effective
rate of less than 15% under the Pillar Two tax calculation. In addition, local
legislation has been substantively enacted in other territories in which the
Group operates, where domestic minimum top-up taxes have been introduced.
The Group has applied the temporary exemption, introduced in May 2023, from
the accounting requirements for deferred taxes in IAS 12, so that an entity
should neither recognise nor disclose information about deferred tax assets
and liabilities related to Pillar Two income taxes. The new rules do not have
a significant impact on the tax charge for the Group.
8 Property, plant and equipment
Land and buildings
Freehold Leasehold $000 Plant and equipment $000 Fixtures and fittings Motor Total
$000 $000 vehicles $000
$000
Cost
Balance at 1 April 2023 44,877 5,466 113,157 6,719 2,338 172,557
Additions 443 285 10,535 400 200 11,863
Additions on acquisitions of a business - - 84 - - 84
Transfer to assets held for sale (2,656) - - - - (2,656)
Disposals - - (2,163) (193) (133) (2,489)
Effect of movements in foreign exchange 169 (103) 76 - (18) 124
Balance at 31 March 2024 42,833 5,648 121,689 6,926 2,387 179,483
Additions 262 85 5,197 488 89 6,121
Transfer to assets held for sale (3,576) (1,719) (12,655) (843) (236) (19,029)
Transfer to intangible assets - - (464) - - (464)
Disposals (775) (666) (2,075) (345) (184) (4,045)
Effect of movements in foreign exchange 412 27 900 80 (20) 1,399
Balance at 31 March 2025 39,156 3,375 112,592 6,306 2,036 163,465
Depreciation and impairment
Balance at 1 April 2023 (20,874) (4,526) (70,387) (4,740) (1,724) (102,251)
Depreciation charge for the year (1,899) (738) (8,934) (545) (210) (12,326)
Transfer to assets held for sale 870 - - - - 870
Disposals - - 1,164 194 111 1,469
Effect of movements in foreign exchange (173) 98 (110) (5) 7 (183)
Balance at 31 March 2024 (22,076) (5,166) (78,267) (5,096) (1,816) (112,421)
Depreciation charge for the year (1,681) (213) (8,195) (427) (163) (10,679)
Impairments - - (4,515) - - (4,515)
Transfer to assets held for sale 691 1,605 12,020 759 191 15,266
Disposals 697 665 1,707 350 166 3,585
Effect of movements in foreign exchange (288) (18) (748) (100) 11 (1,143)
Balance at 31 March 2025 (22,657) (3,127) (77,998) (4,514) (1,611) (109,907)
Net book value
At 31 March 2025 16,499 248 34,594 1,792 425 53,558
At 31 March 2024 20,757 482 43,422 1,830 571 67,062
In the first half of FY2025 a property in Bloomsburg, Pennsylvania with a net
book value of $2.9 million was transferred to assets held for sale, this
property was sold in the second half of the year for $8.4 million (see note 1
for further details).
Fixed assets relating to Huizhou Gift International Greetings Co. Ltd in China
were transferred to assets held for sale (net book value of $1.4 million was
written down to $0.6 million) as a result of their carrying value being less
than the fair value less cost to sell. These assets were disposed of in the
second half of the year resulting in a small loss on disposal (see note 1 for
further details).
In the prior year a property in Berwick, Pennsylvania (DG Americas) with a net
book value of $1.6 million and a property in Hirwaun, Wales (DG International)
with a net book value of $0.2 million were reclassified to assets held for
sale. Both properties are being actively marketed for sale and continue to be
shown as assets held for sale.
Depreciation is charged to cost of sales, selling costs or administration
costs within the income statement depending on the department to which the
assets relate.
No fixed assets creditors were included in Other financial liabilities (note
18) (2024: $1.6 million) as at the end of the financial year.
Impairment
Within the $4.5 million impairment charge, $0.8 million relates to the
write-down of assets relating to Huizhou Gift International Greetings Co. Ltd
(see note 1) and $3.8 million relates to the impairment of plant and equipment
in DG Americas (see note 9).
Security
Certain freehold properties with a cost of $14.0 million in the UK were
subject to a fixed charge in support of the ABL banking facility, other fixed
assets are secured with an all-assets lien on all existing and future assets
of the loan parties (see note 15 for further details).
9 Intangible assets
Computer software $000 Customer relationships $000 Other intangibles $000
Goodwill $000 Trade names $000 Total
$000
Cost
Balance at 1 April 2023 103,214 14,355 5,231 23,987 261 147,048
Additions - 361 - - 81 442
Additions on acquisition of business 206 - 50 22 - 278
Disposals - (1,748) - - - (1,748)
Effect of movements in foreign exchange 576 (6) (8) (22) (2) 538
Balance at 31 March 2024 103,996 12,962 5,273 23,987 340 146,558
Additions - 627 - - - 627
Transferred from tangible fixed assets - 464 - - - 464
Disposals - (705) (234) (846) (5) (1,790)
Effect of movements in foreign exchange 758 25 6 30 - 819
Balance at 31 March 2025 104,754 13,373 5,045 23,171 335 146,678
Amortisation and impairment
Balance at 1 April 2023 (42,086) (12,513) (5,231) (9,945) (140) (69,915)
Amortisation charge for the year - (1,225) (3) (1,804) - (3,032)
Disposals - 1,742 - - - 1,742
Effect of movements in foreign exchange (632) 4 6 21 2 (599)
Balance at 31 March 2024 (42,718) (11,992) (5,228) (11,728) (138) (71,804)
Amortisation charge for the year - (475) (17) (1,760) (178) (2,430)
Impairments (48,679) (63) - (1,660) - (50,402)
Disposals - 629 234 846 5 1,714
Effect of movements in foreign exchange (804) (22) (6) (32) - (864)
Balance at 31 March 2025 (92,201) (11,923) (5,017) (14,334) (311) (123,786)
Net book value
At 31 March 2025 12,553 1,450 28 8,837 24 22,892
At 31 March 2024 61,278 970 45 12,259 202 74,754
Computer software relates to purchased software and people costs associated
with the implementation of software.
The aggregate carrying amounts of goodwill allocated to each CGU are as
follows:
2025 2024
$000 $000
UK and Asia 2,683 2,613
Europe 6,551 6,525
USA - 48,680
Australia 3,319 3,460
12,553 61,278
All goodwill balances have arisen as a result of acquisitions and are not
internally generated.
Impairment
The Group tests goodwill annually for impairment, or more frequently when
there are indicators that it may be impaired.
Goodwill is allocated to the cash-generating units (CGUs) or groups of CGUs
that are expected to benefit from the synergies of the related business
combinations. This represents the lowest level at which goodwill is monitored
for internal management purposes. The recoverable amounts of CGUs are
determined as the higher of value in use (VIU) and fair value less costs to
sell (FVLCTS).
The Group has prepared detailed cash flow forecasts for each CGU covering a
three-year period. These forecasts, approved by management and the Board, are
based on historical performance, current trading conditions, and management's
expectations for future developments. The forecasts incorporate assumptions on
sales growth, EBITDA margins, and overhead costs.
Climate change is recognised as a risk that could affect future cash flows and
the recoverable amounts of CGUs, including goodwill. The Group's current
modelling primarily captures immediate, quantifiable impacts of
climate-related risks. Medium and long-term effects are not yet fully
reflected due to inherent uncertainty. The Group will continue to monitor and
refine its assessment of the impact of climate change in future reporting
periods.
The key assumptions used in the VIU calculations include sales growth, EBITDA
margins, discount rates, and long-term growth rates. Long-term growth rates do
not exceed the long-term economic growth expectations for the countries in
which the CGUs operate. Discount rates used are pre-tax rates that reflect
current market assessments of the time value of money and risks specific to
each CGU.
For the year ended 31 March 2025, the Group's post-tax weighted average cost
of capital (WACC) was 11.2% (2024: 10.8%). Pre-tax discount rates used in the
impairment testing were derived from this WACC and adjusted for relevant
jurisdictional tax rates.
Pre-tax discount rates used were:
2025 2024
UK and Asia 15.0% 14.3%
Europe 15.1% 14.5%
USA 18.9% 14.4%
Australia 15.9% 15.4%
Long-term growth rates used were:
2025 2024
UK and Asia 2.0% 2.0%
Europe 2.0% 2.0%
USA 2.1% 2.1%
Australia 2.5% 2.5%
An impairment loss of $54.2 million was recognised during the year ended 31
March 2025 (2024: $nil). This includes $48.7 million relating to goodwill on
the acquisition of DG Americas, $1.7 million in intangible assets, and $3.8
million in plant and equipment. The impairment was triggered by a
deterioration in DG Americas' performance, including the Group's
fourth-largest customer entering Chapter 11 bankruptcy. As a result, the
long-term forecasts for this CGU were revised downward.
The recoverable amount of DG Americas was determined using the Fair Value Less
Costs of Disposal (FVLCOD) approach. This approach yielded a higher
recoverable amount compared to other valuation methodologies, including the
Discounted Cash Flow (DCF) method (value in use) applied in prior periods, and
the income approach based on earnings multiples.
The fair value was determined using the Adjusted Book Value (ABV) Method, a
form of the Asset-Based Approach. This method estimates the equity value of
the CGU by subtracting the fair value of its liabilities from the fair value
of its assets. Given that the subject CGU is not generating adequate returns
on its assets, a hypothetical willing buyer and seller would likely consider
the underlying net asset value rather than relying solely on future cash
flows. Accordingly, the ABV Method was utilised to determine the recoverable
amount of the CGU.
In applying the ABV Method, we adjusted the values of DG Americas' assets and
liabilities to reflect fair value and arrive at an indication of stockholders'
equity. While the recoverable amounts of most assets and liabilities were
considered to approximate their book values, the following categories were
individually assessed and adjusted based on additional valuation procedures:
• owned real property;
• leased real property;
• personal property;
• goodwill and intangible assets; and
• right-of-use assets and lease liabilities.
In line with IFRS 13, the impairment is first allocated to goodwill, which is
deemed to have the least reliably measurable recoverable amount. After
goodwill is fully impaired, any remaining impairment is allocated on a pro
rata basis to other assets in the CGU, excluding land and other assets not
subject to impairment. We applied this approach by re-measuring individual
assets to the higher of (i) their fair value or (ii) their adjusted carrying
value after absorbing a proportionate share of the impairment.
As a result of these adjustments, a total impairment charge of $54.2 million
was recognised in FY2025, split between goodwill ($48.7 million), plant and
machinery ($3.8 million) and intangible assets ($1.7 million).
The recoverable amount of the CGU was categorised within Level 3 of the fair
value hierarchy under IFRS 13, due to the use of significant unobservable
inputs. Key assumptions used in the measurement included:
· fair value estimates of real property and personal property based
on independent third-party appraisals and comparable market data;
· adjustments to right-of-use assets and liabilities based on
prevailing market lease terms;
· estimated costs of disposal; and
· a discount rate of 14.5% applied where present value techniques
were used to estimate certain asset values.
Further to this, we performed a sensitivity analysis on the DG Americas fair
value, assessing the impact of a movement of 20% in either direction. The
results indicated a potential impairment ranging from $17.4 million ($17.4
million to goodwill) to $84.1 million ($48.7 million in goodwill, $10.7
million in Intangible Assets and $24.7 million to plant and equipment).
However, given the detailed and robust assessment carried out on the DG
Americas' assets, we believe the valuation is both fair and well supported.
No impairment was identified for any other CGUs. In all other CGUs, the
recoverable amount exceeded the carrying amount. Management performed
sensitivity analysis to assess the impact of changes in key assumptions. A
100-basis increase in the discount rate, a 0.5% reduction in terminal growth
rate, and a 7.5% reduction in forecast cash flows and reallocation of central
costs against remaining CGUs post DG Americas sale were applied. Under these
stress-tested scenarios, all CGUs except DG Americas maintained headroom, and
no impairment would be required.
The Directors are satisfied that the assumptions used in the impairment
assessment are appropriate and supported by external benchmarks and internal
projections. They do not believe that reasonably possible changes in key
assumptions would lead to impairment in any other CGUs.
10 Right-of-use assets and lease liabilities
Right-of-use assets
Land and buildings Plant and machinery $000 Motor Office equipment $000 Total
$000 vehicles $000
$000
Net book value at 1 April 2023 67,831 763 355 383 69,332
Additions 6,252 154 165 42 6,613
Disposals (1,119) - - (21) (1,140)
Depreciation charge (15,752) (340) (208) (170) (16,470)
Reversal of impairment 553 - - - 553
Effect of movements in foreign exchange 237 (35) 13 12 227
Net book value at 31 March 2024 58,002 542 325 246 59,115
Additions 21,175 1,064 479 21 22,739
Disposals (1,004) - - - (1,004)
Depreciation charge (14,695) (432) (242) (136) (15,505)
Impairment (831) - - - (831)
Effect of movements in foreign exchange 474 8 7 (34) 455
Net book value at 31 March 2025 63,121 1,182 569 97 64,969
In FY2025, the Group entered into a new lease in DG Australia for a warehouse
facility, resulting in the recognition of a right-of-use asset of $16.7
million. Additions include lease modifications and extensions of $3.7 million
(2024: $122,000).
Impairment charges totalling $831,000 were recognised during the year,
comprising $674,000 related to a previously partially impaired property in
Budd Lake, New Jersey, and $157,000 in relation to two other leasehold
properties. As at 31 March 2025, these properties remained fully impaired due
to continued lack of interest from potential sub-tenants. A reversal of the
impairment of all impaired properties, should conditions improve, would result
in an increase in the carrying amount of right-of-use assets of $2.2 million
(2024: $2.0 million).
Income statement
The income statement shows the following charges/(credits) relating to leases:
2025 2024
$000 $000
Interest expense (included in finance costs) 2,485 2,336
Depreciation charge 15,505 16,470
Impairment/(reversal of impairment) (see note 1) 831 (553)
Expense relating to short-term leases 100 152
Low-value lease costs were negligible in the year.
At 31 March 2025, the Group had estimated lease commitments for leases not yet
commenced of $nil (2024: $17.3 million).
Movement in lease liabilities
2025 2024
$000 $000
Balance at 1 April 67,346 80,187
Cash flow - financing activities (16,504) (18,422)
Additions 22,739 6,613
Disposals (1,091) (1,167)
Effect of movements in foreign exchange 650 135
Balance at 31 March 73,140 67,346
2025 2024
$000 $000
Non-current liabilities 59,627 51,751
Current liabilities 13,513 15,595
73,140 67,346
Total cash outflow in relation to leases is as follows:
2025 2024
$000 $000
Included in financing activities - payment of lease liabilities 16,504 18,422
Included in interest and similar charges paid 2,245 2,336
Short-term leases - 152
18,749 20,910
During the year sub-lease income from right-of-use assets was $758,000 (2024:
$687,000).
Non-cancellable operating lease rentals are receivable as follows:
2025 2024
$000 $000
Less than one year 1,267 401
Between one and five years 1,724 985
2,991 1,386
11 Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Property, plant
and equipment Tax losses
and intangible carried Doubtful Other timing
assets forward debts differences((a)) Total
$000 $000 $000 $000 $000
At 1 April 2023 4,009 7,345 5 3,821 15,180
Credit/(charge) to income statement 822 15,530 (4) 7,460 23,808
Credit/(charge) to equity 3 - - (42) (39)
At 31 March 2024 4,834 22,875 1 11,239 38,949
Deferred tax liabilities (191) - - (3) (194)
Deferred tax assets 5,025 22,875 1 11,242 39,143
4,834 22,875 1 11,239 38,949
Property, plant
and equipment Tax losses
and intangible carried Doubtful Other timing
assets forward debts differences((a)) Total
$000 $000 $000 $000 $000
At 1 April 2024 4,834 22,875 1 11,239 38,949
(Chage)/credit to income statement (4,766) (22,875) 5 (10,035) (37,671)
Charge to equity (7) - (1) (37) (45)
At 31 March 2025 61 - 5 1,167 1,233
Deferred tax liabilities (75) - - (3) (78)
Deferred tax assets 136 - 5 1,170 1,311
61 - 5 1,167 1,233
(a) Other timing differences include a deferred tax asset closing balance of
$489,000 (2024: $534,000) in respect of provision for inventory and $147,000
(2024: $1.7 million) in respect of leases.
Deferred tax is presented net on the balance sheet in so far as a right of
offset exists.
2025 2024
$000 $000
Net deferred tax asset 1,306 39,099
Net deferred tax liability (73) (150)
1,233 38,949
Deferred tax assets and liabilities are treated as non-current as it is
expected that they will be recovered or settled more than twelve months after
the reporting date.
The Group recognises deferred tax assets and liabilities based on estimates of
future taxable income and recoverability. Deferred tax is provided using the
balance sheet liability method, providing for temporary differences between
the carrying amounts of assets and liabilities for financial reporting
purposes and the amount used for taxation purposes.
As at 31 March 2025, there are no deferred tax assets in respect of tax losses
carried forward (2024: $22.9 million). During the year, in DG Americas, $37.4
million of previously recognised deferred tax assets were derecognised of
which $22.5 million related to tax losses.
At the end of the year in the US there are gross temporary differences of
$137.2 million (2024: $nil) and unused tax losses, with no expiry date,
of $86.8 million (2024: $nil) on which deferred tax assets have not been
recognised. In the UK there are gross temporary differences of $5.0 million
(2024: $671,000) and unused tax losses, with no expiry date, of $31.4 million
(2024: $36.0 million) on which deferred tax assets have not been recognised.
Deferred tax assets in these territories are not being recognised due to the
lack of sufficient compelling evidence to suggest their recognition at this
time.
No deferred tax liability (2024: $nil) has been recognised on remitted
earnings or on dividends declared and not paid. If all unremitted earnings
were repatriated with immediate effect, the full potential tax liability
which has not been recognised in respect of unremitted earnings is $146,000
(2024: $355,000).
Included within current tax liabilities is $8.1 million (2024: $6.7 million)
in respect of uncertain tax positions. As an international business, the Group
is exposed to the income tax laws of the jurisdictions in which it operates.
These laws are complex and subject to different interpretations by taxpayers
and tax authorities. The assessment of uncertain tax positions is subjective.
It is based on the Group's interpretation of country-specific tax law and its
application and interaction, on previous experience and on management
professional judgement supported by external advisers where necessary. The
amount consists of various tax risks which individually are not material. The
position is reviewed on an ongoing basis, and it is possible the amounts paid
will be different from the amounts provided but this is not expected to be
material.
No deferred tax charge was recognised through the statement of changes in
equity and there are no deferred tax balances with respect to cash flow
hedges.
12 Inventory
2025 2024
$000 $000
Raw materials and consumables 25,858 25,022
Work in progress 29,351 25,909
Finished goods 117,442 114,470
172,651 165,401
During the year, materials, consumables, changes in finished goods and work in
progress of $509.2 million (2024: $558.3 million) were recognised as an
expense and included in cost of sales.
Inventory provisions have been assessed as at 31 March 2025 and overall an
expense of $12.0 million has been recognised in the year (2024: $8.9 million).
This consists of the addition of new provisions for slow moving and obsolete
inventory of $16.2 million (2024: $13.4 million), and the release of previous
slow moving and obsolete inventory provisions amounting to $4.3 million (2024:
$4.5 million) due to inventory either being used or sold.
13 Long-term assets and trade and other receivables
Long-term assets are as follows:
2025 2024
$000 $000
Acquisition indemnities 650 1,052
Security deposits 642 1,164
Insurance related assets 1,607 2,432
2,899 4,648
Acquisition indemnities relate to previous acquisitions made by a DG Americas
business and indemnities provided by the seller. Security deposits relate to
leased properties and insurance related assets include a corporate owned life
insurance policy.
Trade and other receivables are as follows:
2025 2024
$000 $000
Trade receivables 76,571 77,565
Prepayments, other receivables and accrued income 7,864 11,444
VAT receivable 392 514
84,827 89,523
The Group is party to supplier financing arrangements with one 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. At 31 March 2025 nothing had been drawn down on this
arrangement (2024: $nil).
Please see note 15 for more details of the banking facilities.
There are no trade receivables in the current year (2024: $nil) expected to be
recovered in more than twelve months.
The Group's exposure to credit and currency risks and provisions for doubtful
debts related to trade and other receivables is disclosed in note 24.
14 Cash and cash equivalents/bank overdrafts
2025 2024
$000 $000
Cash and cash equivalents 136,493 157,365
Bank overdrafts (52,539) (63,655)
Cash and cash equivalents and bank overdrafts per cash flow statement 83,954 93,710
Cash and cash equivalents include $58.0 million (2024: $67.1 million) held
within the HSBC cash pooling facility, $70.5 million (2024: $80.9 million) of
cash deposits, and $7.9 million (2024: $9.3 million) of cash held in bank.
Bank overdrafts include $52.0 million (2024: $63.7 million) overdrafts within
the cash pooling facility, and other overdraft facilities.
Net cash
2025 2024
$000 $000
Cash and cash equivalents 83,954 93,710
Loan arrangement fees 838 1,517
Net cash as used in the financial review cash flow statement 84,792 95,227
The Group's exposure to interest rate risk and sensitivity analysis for
financial assets and liabilities are disclosed in note 24.
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
15 for further details of the Group's loans and overdrafts.
Changes in net cash
Loan Other assets
arrangement cash/bank
fees overdrafts Total
$000 $000 $000
Balance at 1 April 2023 250 50,234 50,484
Cash flows 2,261 42,250 44,511
Effect of other items
Amortisation of loan arrangement fees (1,000) - (1,000)
Effect of movements in foreign exchange 6 1,226 1,232
Balance at 31 March 2024 1,517 93,710 95,227
Cash flows - (11,258) (11,258)
Effect of other items
Amortisation of loan arrangement fees (708) - (708)
Effect of movements in foreign exchange 29 1,502 1,531
Balance at 31 March 2025 838 83,954 84,792
15 Loans and borrowings
This note provides information about the contractual terms of the Group's
interest-bearing loans and borrowings. For more information about the Group's
exposure to interest rate and foreign currency risk, see note 24.
2025 2024
$000 $000
Non-current liabilities
Secured bank loans - -
Loan arrangement fees (120) (817)
(120) (817)
Current liabilities
Current portion of secured bank loans - -
Loan arrangement fees (718) (700)
(718) (700)
Financing facilities
On 5 June 2023, the Group entered into an Asset Backed Lending (ABL) facility
with HSBC and NatWest, with a maximum facility amount of $125.0 million and 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. On 29
April 2025, the Group signed a supplemental agreement to the ABL facility,
extending the maturity date to 5 June 2027 and reducing the maximum facility
amount to $100.0 million. This facility was cancelled on 30 May 2025 following
the disposal of DG Americas.
On 11 July 2025, the Group entered into a new Receivables Finance Facility
with HSBC and NatWest. The facility has an initial minimum period of 36 months
and provides maximum £40 million funding based on a borrowing base linked to
eligible receivables across participating Group companies. Availability under
the facility is determined by reference to the value of receivables, subject
to eligibility criteria and concentration limits. The facility does not
include financial ratio covenants but is subject to certain operational
covenants.
The Group had an unsecured overdraft facility provided by HSBC of £16.5
million, which reduced to £8.5 million from August 2023. This facility was
replaced with £15.0 million overdraft facility on 30 May 2025 and was
subsequently cancelled on introduction of the Receivables Finance Facility.
Interest costs, loan arrangement fees and covenants
Interest charged on the Asset Backed Lending facility that was operational as
at 31 March 2025 was based, on one of two methods, dependent 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 was 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 was a minimum fixed
charge coverage ratio of 1.0 times, would had been only triggered if the
remaining availability of the facility was 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 twelve 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 were secured over the trade receivables that
they are drawn on.
Under the Receivables Finance Facility entered into on 11 July 2025, the Group
would incur interest on financed receivables in the form of a discount charge.
The discount is calculated daily on the Discounting Account Balance at a rate
equal to the Base Rate applicable to the currency of the receivable, plus a
margin of 1.75% per annum.
The Base Rates are defined in the agreement as follows:
· GBP: The Bank of England base rate;
· EUR: The European Central Bank base rate; and
· USD: The upper limit of the Federal Reserve's federal funds
target rate.
Additional fees apply including arrangement and service-related fees. No
non-utilisation or commitment fees apply under this facility.
The Group's Receivables Finance Facility is subject to certain operational
covenants but not financial covenants.
The Receivables Finance Facility is secured over eligible receivables assigned
by participating Group companies. The facility is supported by specific
security arrangements, including debentures or equivalent local law security
documents, held by a security agent on behalf of the lenders.
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 if used, the associated balances are recognised as trade
receivables until receipt of the payment from the bank, at which point the
receivable is derecognised.
16 Deferred income
2025 2024
$000 $000
Included within non-current liabilities
Deferred grant income 2,109 1,837
Included within current liabilities
Deferred grant income 254 211
Other deferred income 8 3
262 214
The deferred grant income is in respect of government grants relating to the
development of the Penallta site in Wales and the Byhalia site in Mississippi.
The conditions for the Wales grant were all fully met in January 2019 and for
the Byhalia site in January 2023. Deferred income is being released in line
with the depreciation of the assets for which the grant is related to.
17 Provisions
Duties,
interest and
Property penalties Other Total
$000 $000 $000 $000
Balance at 1 April 2023 6,519 5,462 294 12,275
Provisions made in the year 288 - 442 730
Provisions released during the year (2,004) - (294) (2,298)
Unwinding of fair value discounts 68 - - 68
Provisions utilised during the year (490) - - (490)
Effect of movements in foreign exchange 41 - (3) 38
Balance at 31 March 2024 4,422 5,462 439 10,323
Provisions made in the year 244 - 154 398
Provisions released during the year (163) (4,921) (268) (5,352)
Unwinding of fair value discounts 81 - - 81
Provisions utilised during the year (592) (414) (86) (1,092)
Effect of movements in foreign exchange 50 (127) - (77)
Balance at 31 March 2025 4,042 - 239 4,281
2025 2024
$000 $000
Non-current 2,540 2,796
Current 1,741 7,527
4,281 10,323
The property provision represents the estimated reinstatement cost of 16 of
the Group's leasehold properties under fully repairing leases (2024: 14
properties). Of the $2.5 million non-current balance, $2.0 million (2024: $2.0
million) relates to a lease expiring in 2036; the remainder relates to
provisions unwinding between one and five years.
The duties, interest and penalties provision represented the potential
liabilities relating to pre-acquisition duties owed by a foreign subsidiary of
the DG Americas division estimated at $5.5 million. During the year $414,000
was paid in relation to duties and interest. The matter has now been closed,
and the balance of provision has been released (see note 1 for further
details).
18 Other financial liabilities
2025 2024
$000 $000
Included within non-current liabilities
Rebates and customer claims 12,690 11,644
Employee costs 1,069 985
Other creditors and accruals 1,594 1,678
15,353 14,307
Included within current liabilities
Employee costs 11,101 18,209
Rebates and customer claims 10,679 8,033
Property costs 2,425 2,964
Fixed asset creditors - 1,609
Goods in transit 2,661 1,154
Other creditors and accruals 5,636 5,089
32,502 37,058
Forward foreign exchange contracts carried at fair value through the hedging 534 26
reserve
33,036 37,084
19 Trade and other payables
2025 2024
$000 $000
Trade payables 81,684 83,301
Other payables including social security 2,872 2,446
VAT payable 266 354
84,822 86,101
20 Share capital
Authorised share capital at 31 March 2025 and 2024 was £6.0 million, 121.0
million ordinary shares of 5 pence each.
Ordinary shares
In thousands of shares 2025 2024
In issue at 1 April 98,279 97,994
Options exercised during the year 29 285
In issue at 31 March - fully paid 98,308 98,279
2025 2024
$000 $000
Allotted, called up and fully paid
Ordinary shares of £0.05 each 6,358 6,201
Of the 98.3 million shares in the Company, 3.0 million (2024: 3.0 million) are
held by IG Employee Share Trustee Limited (the 'Employee Benefit Trust').
Long Term Incentive Plan (LTIP) options exercised during the year resulted in
29,000 ordinary shares issued at nil cost (2024: 285,000 ordinary shares
issued at nil cost).
The holders of ordinary shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at meetings of the
Company.
21 (Loss)/earnings per share
2025 2024
$000 $000
(Loss)/earnings
(Loss)/profit attributable to equity holders of the Company (99,685) 35,625
Adjustments
Adjusting items (note 1) 57,468 2,102
Add back non-controlling interest adjusting items (464) -
Total adjusting items 57,004 2,102
Tax charge on adjusting items (note 1) 37,192 (21,805)
Add back tax credit on non-controlling interest adjusting items 139 -
Total tax charge on adjusting items 37,331 (21,805)
Adjusted (loss)/earnings attributable to equity holders of the Company (5,350) 15,922
In thousands of shares 2025 2024
Issued ordinary shares at 1 April 98,279 97,994
Shares relating to share options 28 314
Less: shares held by Employee Benefit Trust (3,026) (1,457)
Weighted average number of shares for the purposes of calculating basic EPS 95,281 96,851
Effect of dilutive potential shares - share awards - 563
Weighted average number of shares for the purposes of calculating diluted EPS 95,281 97,414
1,083,000 share options (2024: nil) were not included in the calculation of
diluted (loss)/earnings per share because they were antidilutive.
2025 2024
Cents Cents
(Loss)/earnings per share
Basic (loss)/earnings per share (104.6) 36.8
Impact of adjusting items (net of tax) 99.0 (20.3)
Basic adjusted (loss)/earnings per share (5.6) 16.5
Diluted (loss)/earnings per share (104.6) 36.6
Diluted adjusted (loss)/earnings per share (5.6) 16.3
Adjusted (loss)/earnings per share are provided to reflect the underlying
earnings performance of the Group.
Basic (loss)/earnings per share
Basic EPS is calculated by dividing the profit/loss for the year 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 (loss)/earnings per share
Diluted EPS is calculated by dividing the profit/loss for the year
attributable to ordinary shareholders by the weighted average number of shares
outstanding during the period, plus the weighted average number of ordinary
shares that would be issued on the conversion of the potentially dilutive
shares.
22 Dividends paid and proposed
No dividends were paid in the current year (2024: nil) and the Directors are
not recommending the payment of a final dividend in respect of the year ended
31 March 2025.
23 Employee benefits
Post-employment benefits
The Group administers a defined benefit pension plan that was inherited
through the acquisition of CSS and covers certain employees of a UK
subsidiary. The scheme closed to future accrual on 31 December 2012. This is a
separate trustee administered fund holding the pension scheme assets to meet
long-term pension liabilities. The plan assets held in trust are governed by
UK regulations and responsibility for governance of the plan, including
investment decisions and contribution schedules, lies with the group of
trustees. The assets of the scheme are invested in the SPI With-Profits Fund,
which is provided by Phoenix Life Limited.
An actuarial valuation was updated on an approximate basis at 31 March 2025,
by a qualified actuary, independent of the scheme's sponsoring employer.
The major assumptions used by the actuary are shown below.
Present values of defined benefit obligation, fair value of assets and defined
benefit asset/(liability)
2025 2024
$000 $000
Fair value plan of assets 3,420 3,170
Present value of defined benefit obligation (935) (989)
Surplus in plan 2,485 2,181
Surplus not recognised (2,485) (2,181)
Net defined benefit asset to be recognised - -
In accordance with IAS 19, the surplus on the plan has not been recognised on
the basis it is not expected to be recovered, as the Group does not have an
unconditional right to any refund.
Reconciliation of opening and closing balances of the defined benefit
obligation
2025 2024
$000 $000
Defined benefit obligation as at 1 April (989) (1,245)
Interest expense (49) (54)
Benefits payments from plan assets - 307
Actuarial gains due to changes in demographic assumptions (8) 15
Actuarial gains due to changes in financial assumptions 170 18
Effect of experience adjustments (36) (5)
Effect of movement in foreign exchange (23) (25)
Defined benefit obligation as at 31 March (935) (989)
Reconciliation of opening and closing balances of the fair value of plan
assets
2025 2024
$000 $000
Fair value of plan assets as at 1 April 3,170 3,269
Interest income 159 154
Return on plan assets (49) (68)
Contributions by the Company 64 63
Benefits payments from plan assets - (307)
Admin expenses paid from plan assets (5) (6)
Effect of movement in foreign exchange 81 65
Fair value of plan assets as at 31 March 3,420 3,170
A total of $105,000 (2024: $94,000) has been credited to Group operating loss
during the year, including $5,000 (2024: $6,000) of expense netting against
net interest income of $110,000 (2024: $100,000).
The principal assumptions used by the independent qualified actuary for the
purposes of IAS 19 are as follows:
2025 2024
Increase in salaries - -
Increase in pensions - -
- at RPI capped at 5% 3.70% 3.30%
- at CPI capped at 5% 2.40% 2.40%
- at CPI capped at 2.5% 2.40% 2.40%
Discount rate 5.90% 4.90%
Inflation rate - RPI 3.10% 3.20%
Inflation rate - CPI 2.40% 2.40%
Due to the timescale covered, the assumptions may not be borne out in
practice.
The life expectancy assumptions (in number of years) used to estimate defined
benefit obligations at the year end are as follows:
2025 2024
Male retiring today at age 60 24.8 25.8
Female retiring today at age 60 28.4 27.8
Male retiring in 20 years at age 60 26.4 27.4
Female retiring in 20 years at age 60 30.0 29.4
In addition to the defined benefit pension scheme there is also a small
post-retirement healthcare scheme operated in the US, which was also inherited
through the acquisition of CSS. In total, the amounts taken through the
Group's statement of comprehensive income can be seen below:
2025 2024
$000 $000
UK pension scheme
Actuarial losses on defined benefit pension scheme (59) (55)
US health scheme 19 7
(40) (48)
Long Term Incentive Plans
The Group operates a Long Term Incentive Plan (LTIP). Under the LTIP, nil cost
options and conditional awards over ordinary shares of 5 pence each ('ordinary
shares') in the capital of the Company are awarded to Executive Board
Directors of the Company and other selected senior management team members
within the Group. During the year, awards were granted under the 2024-2027
LTIP scheme.
The performance period for each award under the LTIP is three years. The cost
to employees of ordinary shares issued under the LTIP if the LTIP vests is
nil. In principle, the number of ordinary shares to be granted to each
employee under the LTIP will not be more than 265% (and 325% in exceptional
cases) of the relevant employee's base annual salary. The maximum opportunity
available under the 2022-2025, 2023-2026 and 2024-2027 schemes is up to 125%
of base salary for the CEO and CFO.
Between 13 December 2023 and 9 February 2024, the trustee of the IG Design
Group plc Employee Benefit Trust (the 'EBT'), purchased 2 million ordinary
shares of 5 pence each at an average price of £1.40 per ordinary share. These
ordinary shares are to be held in the EBT and are intended to be used to
satisfy the exercise of share options by employees.
Vested LTIP schemes - outstanding options
2025 2024
Weighted Weighted
average average
exercise price Number of exercise price Number of
pence options pence options
Outstanding at 1 April nil 28,272 nil 310,096
Options vesting during the year nil - nil 4,640
Exercised during the year nil (28,272) nil (286,464)
Outstanding at 31 March nil - nil 28,272
Exercisable at 31 March nil - nil 28,272
Scheme details for plans in vesting periods during the year
During the financial year to 31 March 2025 there were three LTIP awards still
within their vesting period (2024: two).
Awards
2022-2025 2023-2026 2024-2027
Aug 2022, Aug 2023, Aug 2024,
Dec 2022, Nov 2023, Dec 2024
Grant date Feb 2023 Dec 2023
Fair value per share (£) 0.99 1.09 1.60
Number of participants 56 62 62
Initial award 2,567,747 2,477,864 1,530,958
Lapses and forfeitures (740,900) (724,121) (246,592)
Potential to vest as at 31 March 2025 1,826,847 1,753,743 1,284,366
Potential to vest as at 31 March 2024 1,987,288 2,414,737 -
Weighted average remaining contractual life of options outstanding at the end 1.07 2.16 3.18
of the year
The grant date fair value of the LTIP awards granted in the year, assuming
they are to vest in full, is $2.6 million.
The grant date fair values of the 2024-2027 scheme were determined using the
following factors:
Share price (£) 1.93
Exercise price Nil
Expected term 3 years (additional 2 years for holding period)
Risk-free interest rate 3.98% (3.77% for awards with holding period)
Expected dividend yield 0%
LTIP performance targets
Individuals were granted performance share awards under the 2022-2025,
2023-2026 and 2024-2027 schemes. Some individuals were also awarded restricted
share awards which are not subject to any performance condition (other than an
underpin condition) and the vesting is dependent on a continued service
requirement. The vesting of performance share awards are subject to a
continued service requirement. The extent of vesting is subject to performance
against performance conditions.
The performance share awards are weighted two-thirds towards a Relative Total
Shareholder Return (TSR) metric and one-third Earnings Per Share metric as the
performance measures. The TSR metric is a measurement of TSR by the Group
relative to a peer group of the FTSE SmallCap excluding Investment Trusts.
An underpin condition was also applied to the awards that allows the
Remuneration Committee to reduce vesting levels if it determines that vesting
outcomes reflect unwarranted windfall gains from share price movements.
Share-based payments charges/(credits)
The total charge/(credit) recognised for the year arising from
equity‑settled share‑based payments is as follows:
2025 2024
$000 $000
Charge in relation to the 2022-2025 LTIP scheme 207 778
Charge in relation to the 2023-2026 LTIP scheme 315 654
Charge in relation to the 2024-2027 LTIP scheme 403 -
Equity-settled share-based payments charge 925 1,432
Social security (credit)/charge (48) 70
Total equity-settled share-based payments charge 877 1,502
Deferred tax assets are recognised on share-based payment schemes when
deferred tax assets are recognised in that territory (see note 11).
Social security charges/(credits) on share-based payments
Social security is accrued, where applicable, at a rate which management
expects to be the prevailing rate when share‑based incentives are exercised
and is based on the latest market value of options expected to vest or having
already vested.
The total social security accrual outstanding at the year end in respect of
share-based payment transactions was $140,000 (2024: $182,000).
24 Financial instruments
Derivative financial assets
a) Fair values of financial instruments
The carrying values for each class of financial assets and financial
liabilities on the balance sheet are not considered to be materially different
to their fair values.
As at 31 March 2025, the Group had derivative contracts, which were measured
at Level 2 fair value subsequent to initial recognition, to the value of an
asset of $1,000 (2024: $68,000) and a liability of $534,000 (2024: $26,000).
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 which are 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.
b) Credit risk
Financial risk management
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group's receivables from customers
and investment securities.
The Group's exposure to credit risk is managed by dealing only with banks and
financial institutions with strong credit ratings. The Group's financial
credit risk is primarily attributable to its trade receivables.
The main customers of the Group are large and mid‑sized retailers, other
manufacturers and wholesalers of greetings products, service merchandisers and
trading companies. The Group has established procedures to minimise the risk
of default of trade receivables including detailed credit checks undertaken
before new customers are accepted and rigorous credit control procedures after
sale. These processes have proved effective in minimising the level of
provisions for doubtful debts required.
The amounts presented in the balance sheet are net of allowances for doubtful
receivables estimated by the Group's management, based on prior experience and
their assessment of the current economic environment.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit
exposure. Therefore, the maximum exposure to credit risk at the balance sheet
date was $216.0 million (2024: $239.6 million) being the total of the carrying
amount of financial assets.
The maximum exposure to credit risk for trade receivables at the balance sheet
date by reporting segment was:
2025 2024
$000 $000
DG Americas 51,578 52,248
DG International 24,993 25,317
76,571 77,565
Credit quality of financial assets and impairment losses
The ageing of trade receivables at the balance sheet date was:
2025 2024
Expected Provisions for Expected Provisions for
loss rate Gross doubtful debts loss rate Gross doubtful debts
% $000 $000 % $000 $000
Not past due 0.8 52,836 (446) 0.1 57,429 (56)
Past due 0-60 days 0.2 17,169 (35) 0.1 13,513 (14)
61-90 days 22.5 3,472 (782) 12.1 5,616 (677)
More than 90 days 36.7 6,888 (2,531) 49.8 3,495 (1,741)
4.7 80,365 (3,794) 3.1 80,053 (2,488)
There were no unimpaired balances outstanding at 31 March 2025 (2024: $nil)
where the Group had renegotiated the terms of the trade receivable. The
increase in provision year-on-year is reflective of the current macroeconomic
circumstances.
Expected credit loss assessment
For the Group's trade receivables, expected credit losses are measured using a
provisioning matrix based on the reason the trade receivable is past due. The
provision matrix rates are based on actual credit loss experience over the
past three years and adjusted, when required, to take into account current
macroeconomic factors. The Group applies experienced credit judgement that is
determined to be predictive of the risk of loss to assess the expected credit
loss, taking into account external ratings, financial statements and other
available information. The Group's trade receivables are unlikely to extend
past twelve months and, as such, for the purposes of expected credit loss
modelling, the lifetime expected credit loss impairments recognised are the
same as a twelve-month expected credit loss.
There have been no significant credit risk movements since initial recognition
of impairments.
The movement in the allowance for impairment in respect of trade receivables
during the year was as follows:
2025 2024
$000 $000
Balance at 1 April 2,488 1,737
Charge for the year 3,015 1,929
Unused amounts reversed (27) (73)
Amounts utilised (1,714) (1,112)
Effects of movement in foreign exchange 32 7
Balance at 31 March 3,794 2,488
The allowance account for trade receivables is used to record provisions for
doubtful debts unless the Group is satisfied that no recovery of the amount
owing is possible; at that point the amounts considered irrecoverable are
written off against the trade receivables directly.
c) Liquidity risk
Financial risk management
Liquidity risk is the risk that the Group, although solvent, will encounter
difficulties in meeting obligations associated with the financial liabilities
that are settled by delivering cash or another financial asset. The Group's
policy with regard to liquidity ensures adequate access to funds by
maintaining an appropriate mix of short-term and longer-term facilities, which
are reviewed on a regular basis. The maturity profile and details of debt
outstanding at 31 March 2025 are set out in note 15.
The following are the contractual maturities of financial liabilities,
including estimated interest payments:
Carrying Contractual One year One to two Two to five More than
amount cash flows or less years years five years
31 March 2025 Note $000 $000 $000 $000 $000 $000
Non-derivative financial liabilities
Other financial liabilities 18 47,855 (47,855) (32,502) (15,132) (218) (3)
Lease liabilities 10 73,140 (85,866) (16,388) (14,954) (27,408) (27,116)
Trade payables 19 81,684 (81,684) (81,684) - - -
Derivative financial liabilities
Forward foreign exchange contracts ((a)) 18 534 (24,082) (24,082) - - -
203,213 (239,487) (154,656) (30,086) (27,626) (27,119)
Carrying Contractual One year One to two Two to five More than
amount cash flows or less years years five years
31 March 2024 Note $000 $000 $000 $000 $000 $000
Non-derivative financial liabilities
Other financial liabilities 18 51,365 (51,365) (37,057) (14,235) (65) (8)
Lease liabilities 10 67,346 (73,768) (16,083) (20,584) (21,528) (15,573)
Trade payables 19 83,301 (83,301) (83,301) - - -
Derivative financial liabilities
Forward foreign exchange contracts ((a)) 18 26 (12,471) (12,471) - - -
202,038 (220,905) (148,912) (34,819) (21,593) (15,581)
(a) Carried at fair value through the hedging reserve and measured at Level 2.
The following table shows the facilities for bank loans, overdrafts,
asset‑backed loans and revolving credit facilities:
31 March 2025 31 March 2024
Facility used Facility used
Carrying contractual Facility Total Carrying contractual Facility Total
amount cash flows unused facility amount cash flows unused facility
$000 $000 $000 $000 $000 $000 $000 $000
Asset-backed loan facility - - (15,356) (15,356) - - (13,359) (13,359)
Bank overdrafts - - (13,633) (13,633) - - (17,075) (17,075)
- - (28,989) (28,989) - - (30,434) (30,434)
The ABL facilities varied through the year depending on the level of eligible
receivables. The maximum limit was $125.0 million. At 31 March 2025, the
available facility amounted to $15.4 million. See note 15 for more
information.
The following guarantees and trade finance facilities across several
jurisdictions are recognised as contingent liabilities. These items are
disclosed as contingent liabilities as they represent potential obligations
dependent on future events not wholly within the Group's control, and no
outflows of economic benefits are currently expected.
31 March 2025 31 March 2024
Facility Utilised Facility Utilised
$000 $000 $000 $000
UK Guarantee 3,557 1,966 3,155 1,918
UK Import line 1,293 - 1,262 -
Foreign Bills - - 6,309 -
USA Guarantee 5,500 2,980 5,500 2,980
Netherlands Guarantee (Trade and Import line) 703 247 702 256
11,053 5,193 16,928 5,154
d) Cash flow hedges
The following derivative financial instruments were designated as cash flow
hedges:
2025 2024
Forward exchange contracts carrying amount $000 $000
Derivative financial assets 1 68
Derivative financial liabilities (534) (26)
The Group has forward currency hedging contracts outstanding at 31 March 2025
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.
All contracts outstanding at the year end crystallise within 24 months of the
balance sheet date at average prices of 1.06 for US dollar to euro contracts
(2024: 1.09) and 1.30 for US dollar to GBP contracts (2024: 1.27). At the year
end the Group held $15.0 million for US dollar to euro contracts (2024: $8.6
million) and $10.0 million for US dollar to GBP contracts (2024: $4.0 million)
in hedge relationships.
When assessing the effectiveness of any derivative contracts, the Group
assesses sources of ineffectiveness which include movements in volumes or
timings of the hedged cash flows.
The cash flow hedges of the expected future purchases in the year were
assessed to be highly effective and as at 31 March 2025, a net unrealised
loss of $177,000 (2024: $292,000 profit) with related deferred tax credit of
$nil (2024: $nil) was included in other comprehensive income in respect of
these hedging contracts. Amounts relating to ineffectiveness recorded in the
income statement in the year were $nil (2024: $nil).
e) Market risk
Financial risk management
Market risk is the risk that changes in market prices, such as foreign
exchange rates, interest rates and equity prices, will affect the Group's
income or the value of its holdings of financial instruments.
The Group hedges a proportion, as deemed appropriate by management, of its
sales and purchases of inventory denominated in foreign currency by entering
into foreign exchange contracts. Such foreign exchange contracts typically
have maturities of less than one year.
The Group rarely hedges profit translation exposure, since such hedges provide
only a temporary deferral of the effects of movement in foreign exchange
rates. Similarly, the Group does not hedge its long-term investments in
overseas assets.
However, the Group holds loans that are denominated in the functional currency
of certain overseas entities.
The Group's exposure to foreign currency risk is as follows. This is based on
the carrying amount for monetary financial instruments, except derivatives,
when it is based on notional amounts.
US dollar Sterling Euro Other Total
31 March 2025 Note $000 $000 $000 $000 $000
Long-term assets 13 2,899 - - - 2,899
Cash and cash equivalents 14 68,217 57,485 4,086 6,705 136,493
Trade receivables 13 53,368 7,912 12,610 2,681 76,571
Derivative financial assets - 1 - - 1
Bank overdrafts 14 (28,849) (14,615) (9,075) - (52,539)
Loan arrangement fees 15 - 838 - - 838
Trade payables 19 (58,930) (11,770) (9,873) (1,111) (81,684)
Other payables 19 (1,479) (743) (719) (197) (3,138)
Balance sheet exposure 35,226 39,108 (2,971) 8,078 79,441
US dollar Sterling Euro Other Total
31 March 2024 Note $000 $000 $000 $000 $000
Long-term assets 13 4,648 - - - 4,648
Cash and cash equivalents 14 79,173 26,489 35,801 15,902 157,365
Trade receivables 13 54,460 6,994 12,568 3,543 77,565
Derivative financial assets - 68 - - 68
Bank overdrafts 14 (37,137) (8,703) (17,815) - (63,655)
Loan arrangement fees 15 - 1,517 - - 1,517
Trade payables 19 (62,583) (8,033) (10,571) (2,114) (83,301)
Other payables 19 (1,357) (652) (589) (202) (2,800)
Balance sheet exposure 37,204 17,680 19,394 17,129 91,407
The following significant exchange rates applied to US dollar during the year:
Average rate 31 March spot rate
2025 2024 2025 2024
Euro 0.93 0.96 0.92 0.92
Pound sterling 0.78 0.83 0.77 0.81
Sensitivity analysis
A 10% weakening of the following currencies against US dollar at 31 March 2025
would have affected equity and profit or loss by the amounts shown below. This
calculation assumes that the change occurred at the balance sheet date and had
been applied to risk exposures existing at that date.
This analysis assumes that all other variables, in particular other exchange
rates and interest rates, remain constant. The analysis was performed on the
same basis for 31 March 2024.
Equity Profit or Loss
2025 2024 2025 2024
$000 $000 $000 $000
Euro (270) 3,442 (702) (343)
Pound sterling 3,555 1,607 283 (26)
On the basis of the same assumptions, a 10% strengthening of the currencies
against US dollar at 31 March 2025 would have affected equity and profit or
loss by the following amounts:
Equity Profit or Loss
2025 2024 2025 2024
$000 $000 $000 $000
Euro 330 (4,207) 858 419
Pound sterling (4,345) (1,964) (346) 32
Profile
At the balance sheet date, the interest rate profile of the Group's
interest-bearing financial instruments was:
2025 2024
Variable rate instruments Note $000 $000
Financial assets 136,493 157,365
Financial liabilities (52,539) (63,655)
Net cash 14 83,954 93,710
A change of 50 basis points (0.5%) in interest rates in respect of financial
assets and liabilities at the balance sheet date would have affected equity
and profit or loss by the amounts shown below. This calculation assumes that
the change occurred at the balance sheet date and had been applied to risk
exposures existing at that date.
This analysis assumes that all other variables, in particular foreign currency
rates, remain constant and considers the effect on financial instruments with
variable interest rates and financial instruments at fair value through profit
or loss. The analysis is performed on the same basis for 31 March 2024.
Sensitivity analysis
2025 2024
$000 $000
Equity
Increase 420 469
Decrease - -
Profit or loss
Increase 420 469
Decrease - -
f) Capital management
The Board's policy is to hold a strong capital base so as to maintain
investor, creditor, customer and market confidence and to sustain future
development of the business. The Group is dependent on the continuing support
of its bankers for working capital facilities and so the Board's major
objective is to keep borrowings within these facilities.
The Board manages its trading capital, which it defines as its net assets
plus net debt. Net debt is calculated as total debt (bank overdrafts, loans
and borrowings as shown in the balance sheet), less cash and cash equivalents.
The banking facilities with the Group's principal bank have amended covenants
relating to earnings and liquidity cover and previous covenants relating to
interest cover, cash flow cover and leverage, and our articles currently
permit borrowings (including letter of credit facilities) to a maximum of four
times equity.
Equity
2025 2024
Note $000 $000
Net equity attributable to owners of the Parent Company 262,886 361,618
Net cash 14 (84,792) (95,227)
Trading capital 178,094 266,391
The main areas of capital management relate to the management of the
components of working capital including monitoring inventory turn, age of
inventory, age of trade receivables, balance sheet reforecasting, monthly
profit and loss, weekly cash flow forecasts and daily cash balances. Major
investment decisions are based on reviewing the expected future cash flows and
all major capital expenditure requires sign off by the Chief Financial Officer
and Chief Executive Officer, or, above certain limits, by the Board. There
were no major changes in the Group's approach to capital management during the
year. A particular focus of the Group is average leverage, measured as the
ratio of average monthly net debt before lease liabilities to adjusted EBITDA
reduced for lease payments.
25 Capital commitments
At 31 March 2025, the Group had outstanding authorised capital commitments to
purchase plant and equipment for $2.0 million (2024: $1.8 million).
26 Related parties
2025 2024
$000 $000
Sale of goods:
Hedlunds Pappers Industri AB 388 152
Festive Productions Ltd 16 6
404 158
There were no outstanding debtor balances in the current year (2024: $nil).
Identity of related parties and trading
Hedlund Import AB is under the ultimate control of the Hedlund family, who are
a major shareholder in the Company. Anders Hedlund is a director of Hedlunds
Pappers Industri AB which is under the ultimate control of the Hedlund family,
who are a major shareholder in the Company. Festive Productions Ltd is a
subsidiary undertaking of Malios Holding AG, a company under the ultimate
control of the Hedlund family.
The above trading takes place in the ordinary course of business.
Other related party transactions
Directors of the Company and their immediate relatives have an interest in 24%
(2024: 24%) of the voting shares of the Company. The shareholdings of
Directors and changes during the year are shown in the Directors' report.
Directors' remuneration
2025 2024
$000 $000
Short-term employee benefits 1,775 2,589
Share-based payments charge 387 371
2,162 2,960
See the Directors' remuneration report for more detail.
27 Non-controlling interests
Set out below is summarised financial information for each subsidiary that has
non-controlling interests that are material to the Group. IG Design Group
Australia Pty Ltd ('Australia') is considered a subsidiary of the Group. The
Group owns 50% of the share capital but can demonstrate that it has control as
required under IFRS.
2025 2024
Non-controlling interest - balance sheet as at 31 March
$000 $000
Non-current assets 21,390 5,976
Current assets 15,483 17,439
Current liabilities (6,636) (7,055)
Non-current liabilities (15,670) (621)
Non-controlling interest - comprehensive income for the year ended 31 March
2025 2024
$000 $000
Revenue 40,603 43,422
Profit after tax 821 2,988
Total comprehensive income 166 2,678
Non-controlling interest - cash flow for the year ended 31 March
2025 2024
$000 $000
Cash flows from operating activities 2,737 5,052
Cash flows from investing activities (792) (657)
Cash flows from financing activities (3,509) (1,628)
Net (decrease)/increase in cash and cash equivalents (1,564) 2,767
Non-controlling interest - movement for the year ended 31 March
2025 2024
$000 $000
Balance as at 1 April 7,869 6,530
Share of profits for the year 410 1,494
Other comprehensive income - 3
Dividend paid to non-controlling interest (668) -
Currency translation (327) (158)
Balance as at 31 March 7,284 7,869
28 Acquisitions
In the prior year IG Design Group Australia Pty Ltd acquired the trade and
assets of Sweetscents, an essentials oils manufacturing and wholesale business
for $496,000 on the 15 January 2024.
The fair value of assets acquired:
$000
Fixed assets 84
Trade names and customer relationships 72
Inventory 134
Fair value of assets acquired 290
Consideration paid in cash 496
Goodwill 206
29 Purchase of own shares
In the prior year between 13 December 2023 and 9 February 2024, the trustee of
the IG Design Group Plc Employee Benefit Trust (the 'EBT'), purchased 2
million ordinary shares of 5 pence each at an average price of £1.40 per
ordinary share. These ordinary shares are to be held in the EBT and are
intended to be used to satisfy the exercise of share options by employees.
The EBT is a discretionary trust for the benefit of the Company's employees,
including the Directors of the Company. The purchase of ordinary shares by the
EBT has been funded by a loan provided by the Company from its existing
financing facilities. The EBT has waived its rights to dividend payments.
30 Non-adjusting post balance sheet events
On 30 May 2025, the Group completed the disposal of its wholly owned
subsidiary, Design Group Americas, Inc., the holding company of the Group's DG
Americas division, to HUK 168 Limited, a special purpose vehicle owned by the
Hilco Capital group (the 'buyer').
Under the terms of the share purchase agreement, the Group received a nominal
upfront payment of $1 and will be entitled to 75% of any future net proceeds
realised by the Buyer from a sale or realisation of DG Americas or its assets,
after agreed deductions and to the extent such proceeds are not retained for
DG Americas' working capital purposes. The Buyer will retain the remaining 25%
of any such proceeds. There is no ongoing recourse on the Group, and no
certainty that any further proceeds will be received.
The disposal enabled the Group to exit a structurally challenged and
loss-making part of the business ahead of its seasonal peak working capital
cycle. It simplified operations and allowed management to refocus on
stronger-performing markets in the UK, continental Europe, and Australia.
On 11 July 2025, the Group finalised a new three-year receivables finance
facility of £40 million, secured over eligible receivables across
participating Group companies. The facility will provide committed funding to
support the Group's ongoing working capital requirements and replaces the
previous ABL facility, which terminated upon completion of the DG Americas
disposal.
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