REG - Inspecs Group PLC - Full Year Trading Update

InspecsAnnouncement

29/01/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240129:nRSc1348Ba&default-theme=true

RNS Number : 1348B  Inspecs Group PLC  29 January 2024

29 January 2024

Inspecs Group plc

("INSPECS" or "the Group")

 

Full Year Trading Update

 

Inspecs Group plc, a leading designer, manufacturer, and distributor of
eyewear (sunglasses, optical frames, lenses and low vision products), today
announces a trading update for the year ended 31 December 2023 ahead of
reporting its final results on 17 April 2024.

 

The Group has maintained its focus on margin improvement through 2023 and
expects to report a 16.1% increase in unaudited Adjusted Underlying EDITDA to
£18.0m (2022: £15.5m). Despite this, financial performance is below the
market expectations due to softer trading in December.

 

Highlights

·   Operational efficiencies have driven an increased EBITDA margin on
sales in the year, with continual progress expected in 2024.

·    Vietnam expansion remains on track and budget, and provides enhanced
sustainability, with first production in H1 2024.

·    Norville losses continue to reduce with new management growing sales
and improving performance.

·    Skunk Works continues to drive innovation and commercial revenues.

·    Global launch of licenced eyewear brand secured during 2023 with
launch in spring 2024.

·    Integration of US businesses commenced in 2023 to generate synergies
within the Americas during 2024.

·    Reduction in net debt despite capex expenditure in Vietnam and
deferred acquisition consideration, with significant cash generation in 2023.

 

Revenue

Group revenue of £200.3m was broadly flat on 2022 (£201.3m), below our
expectations, however the Board remains positive for 2024 with new accounts
and distribution in place. On a constant exchange rate basis(1), revenue
decreased by £3.2m to £197.8m (2022: £201.0m).

 

1. Constant exchange rates: figures at constant exchange rates have been
calculated using the average exchange rates in effect for the corresponding
period in the relevant comparative year.

 

Financial position

The Group's net debt (excluding leases) decreased by £3.3m during the year to
£24.3m (31 December 2022: £27.6m). The Group invested £3.0m in the new
Vietnam factory to provide additional capacity, and a further £2.2m on
deferred acquisition consideration. Leverage has reduced in line with Board
expectations.

 

Acquisitions

Post period end, on 22 January 2024, the Group acquired Norwegian distributor,
A-Optikk AS, for a nominal sum. This acquisition marks a resumption of
strategic acquisitions which increase the Group's vertical integration.  It
will strengthen our Nordic business expansion plans and gives the Group a new
distribution hub in the Norwegian market.

 

Financial liquidity

In December, the Group exercised its option to extend its facilities with HSBC
for 12 months to October 2025, keeping the same margin. The Board expects to
further extend its facilities during the forthcoming year.

 

Outlook

The Group will continue to focus on delivering further operational
efficiencies and reducing costs, while also reducing net debt and leverage.
The new Vietnam facility is scheduled to come onstream in H1 2024, further
enhancing the Group's competitive position. The Group remains focused on
driving sales across all our operating businesses in 2024 and continuing to
develop Group synergies to enhance performance.

 

Richard Peck, Chief Executive Officer commented:

"Whilst our revenue performance was affected by a soft market in December, I
am encouraged that our focus on operational efficiencies in 2024 delivered an
improvement in our margins. The Group has also reduced its net debt while
investing in significant additional manufacturing capacity for the future,
with our new Vietnam facility coming onstream in H1 2024. Having further
strengthened the balance sheet and extended the maturity of our financing
facilities, I look forward to driving sales in 2024, whilst continuing our
programme of improving operational efficiency and continuing to develop Group
synergies to enhance our performance."

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR").

 

 

For further information please contact:

 

 Inspecs Group plc                         via FTI Consulting

 Richard Peck (CEO)                        Tel: +44 (0) 20 3727 1000

 Chris Kay (CFO)

 Peel Hunt (Nominated Adviser and Broker)  Tel: +44 (0) 20 7418 8900

 Adrian Trimmings

 Andrew Clark

 Lalit Bose

 FTI Consulting (Financial PR)             Tel: +44 (0) 20 3727 1000

 Alex Beagley

 Harriet Jackson

About INSPECS Group plc

INSPECS is a leading provider of eyewear solutions to the global eyewear
market. The Group produces a broad range of eyewear frames, low vision aids
and lenses, covering optical, sunglasses and safety, which are either
"Branded" (under licence or under the Group's own proprietary brands), or
"OEM" (unbranded or private label on behalf of retail customers).

INSPECS is building a global eyewear business through its vertically
integrated business model. Its continued growth is underpinned by six core
drivers: increasing the penetration of its own-brand portfolio, increasing
distribution in Asian Pacific markets, growing its travel retail markets,
maximising group synergies, expanding its manufacturing capacity and scaling
the research and development department as it develops new and innovative
eyewear products.

The Group has operations across the globe: with offices and subsidiaries in
the UK, Germany, Portugal, Scandinavia, the US and China (including Hong Kong,
Macau and Shenzhen), and manufacturing facilities in Vietnam, China, the UK
and Italy.

INSPECS customers are global optical and non-optical retailers, global
distributors and independent opticians. Its distribution network covers over
80 countries and reaches approximately 75,000 points of sale.

More information is available at: www.INSPECS.com (http://www.INSPECS.com)

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTUWVRRSBUAUUR