REG - Pebble Group (The) - Trading update

PebbleAnnouncement

22/11/2023 07:15

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RNS Number : 2057U  Pebble Group PLC (The)  22 November 2023

22 November 2023

THE PEBBLE GROUP PLC

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

 

Trading update

 

The Pebble Group (AIM: PEBB, OTCQX: PEBBF), a leading provider of digital
commerce, products and related services to the global promotional products
industry, is today updating the market on its expected performance in the year
to 31 December 2023 ("FY 23").

 

Whilst we expect Facilisgroup to achieve revenue growth in the year, order
intake at Brand Addition has been lower than anticipated and Group revenues
for FY 23 are expected to be approximately £124m (FY 22: £134.0m). As the
Group has continued to generate stronger gross margins in FY 23 compared to
the prior year, the impact of the revenue reduction is expected to be
partially mitigated, and deliver Group EBITDA of approximately £16m (FY 22:
£18.0m), maintaining Group EBITDA margins close to FY 22.

 

Our cash position remains robust, and the Group expects net cash as at 31
December 2023 to be no less than prior year net cash of £15.1m, after
continued capital investment into Facilisgroup and the payment of a dividend
of £1.0m in June 2023.

 

The Group remains strong financially, and both of our businesses are
strategically well-placed within their respective markets.

 

Facilisgroup: providing a digital commerce platform for promotional products
businesses in North America

 

At Facilisgroup, despite the difficult market conditions, FY 23 revenues are
expected to increase by approximately 10% compared to prior year of USD20.4m
(GBP16.6m).

 

We expect the Gross Merchandise Value ("GMV") transacted through our
technology by Partners (customers) to be approximately $1.4bn in FY 23,
slightly ahead of FY 22. This reflects a more challenging economic environment
in the second half of the year and consequently the proportion of our income,
based on in-year Partner activity, has impacted our overall rate of growth in
FY 23.

 

Facilisgroup EBITDA margins are expected to be approximately 50% (FY 22:
54.2%) as we continue to invest in our technology, sales and marketing
strategies.

 

Partner (customer) retention rates continue to be market leading and
consistent with prior year rates of 96%. The total number of Partners at 21
November 2023 is 242 (31 December 2022: 225), with an enlarged team supporting
the new business pipeline.

 

We anticipate that Facilisgroup, with its strong market position, growth
opportunities and excellent profit margins, will become the majority
contributor to Group profits moving through 2024.

 

Brand Addition: providing promotional products and related services under
contract to many of the world's most recognisable brands

 

We expect Brand Addition revenues for FY 23 to be approximately £106m (FY 22:
£117.4m).

This reduction in revenues against FY 22 has been driven principally from our
Technology and Consumer clients, whilst revenue from our Engineering and
Transport sector clients has been more robust.

 

With gross margins increasing in FY 23 compared to the 30.7% achieved in FY
22, the impact of the revenue reduction is expected to be partially mitigated
with the Brand Addition EBITDA margin expected to be approximately 9% (FY22:
9.8%).

 

Our clients are strong, global brands and retention rates continue to be high.
At this point, we anticipate recovery in their spend with us during 2024.

 

Group outlook

 

Against the difficult economic backdrop, we are disappointed to report a
reduction in our Group's expected FY 23 results, due to lower order intake at
Brand Addition. Both of our businesses remain strong financially, are well
differentiated within their respective markets and have a clear strategic
plan. Our balance sheet is robust and we look forward to returning the Group
to growth in 2024.

 

 

Enquiries:

 

 The Pebble Group                                           Temple Bar Advisory (Financial PR)

 Chris Lee, Chief Executive Officer                         Alex Child-Villiers

 Claire Thomson, Chief Financial Officer                    William Barker / Sam Livingstone

 +44 (0) 750 012 4121                                       +44 (0) 207 183 1190

                                                            pebble@templebaradvisory.com (mailto:pebble@templebaradvisory.com)

 Grant Thornton UK LLP (Nominated Adviser)                  Berenberg (Corporate Broker)

 Samantha Harrison / Harrison Clarke / Ciara Donnelly       Ben Wright / Marie Moy / Mollie D'Arcy Rice

 +44 (0) 207 184 4384                                       +44 (0) 203 207 7800

 

About The Pebble Group

 

The Pebble Group is a provider of digital commerce, products and related
services to the global promotional products industry, comprising two
differentiated businesses, Facilisgroup and Brand Addition, focused on
specific areas of the promotional products market. For further information,
please visit www.thepebblegroup.com (http://www.thepebblegroup.com/) .

 

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