A strong H1, with progress on many fronts
IG Design Group has delivered a strong set of interim results, as guided in October’s trading update, with adjusted PBT up 35% to $27.4m on a reported basis (+42% on a constant currency basis). This was driven by accelerated ordering of seasonal goods by retailer customers keen to de-risk their supply chains, alongside catch-up pricing and product engineering, which has delivered some gross margin recovery. While cautious on the outlook given continuing economic uncertainties, the Board has upgraded FY23E guidance to a small adjusted profit before tax (PBT).
A strong H1, with progress on many fronts
G4M’s interim results reflected the previously disclosed headline performance featured in last month’s AGM trading update. The improved H2 trading momentum highlighted in the AGM statement has pleasingly continued into November, with the company reiterating confidence that the full-year FY23E outturn will be in line with consensus market expectations. Future platform developments will focus not only on enhancements to customer service and experience, but also on evolution of the platform to support multiple channels and verticals between suppliers and customers.
Interim results in-line, with clear focus on future platform evolution
G4M reported H1 sales growth of 2% to 30 September, despite the trading challenges laid out in its September AGM trading update. The star of the show was Europe and Rest of the World, which delivered a sales uplift of 10%, reflecting the benefits of the additional Irish and Spanish hubs opened last year. The improved period-end trading momentum has continued into early October. Together with a return to a more normalised seasonal trading pattern, a number of website upgrades to be implemented in H2 and further productivity enhancement measures, the FY23E outlook remains in line with market consensus expectations following the September update.
Improved September momentum continuing into H2 – unchanged forecasts
IG Design Group has reported strong trading across both divisions for the H1 period ended 30 September. The primary driver is that the group’s retailer customers have brought forward their seasonal ordering to pre-empt a repeat of the supply chain challenges and disruptions that occurred in the run-up to Christmas 2021. The result of this reweighting towards H1 will be a significant improvement over last year’s difficult H1 period. As such, and mindful of the ongoing challenges of a difficult economic backdrop, there is no change to the Board’s expectations for FY23E’s full-year trading outturn. Our FY23E forecast is thus unchanged at this stage.
A strong first half, but no change to full-year guidance
Distil’s interim results to 30 September 2022 reflect the financial consequences of the strategic change to its business model, with the group assuming direct control of servicing its major UK customers and employing a third-party distributor for the rest of its business (primarily hospitality, wholesale and export). The reversal to a £602k adjusted operating loss should be seen in this light. To that point, we are making no changes to the reinitiated forecasts published after the Q1 trading update on 13 July. Net cash reserves stood at £0.95m as at 30 September (vs £1.56m at 31 March).
Interim results reflect business model shift
Sanderson Design Group (SDG) delivered an impressive 12.5% increase in adjusted underlying profit before tax to £6.3m for H1 FY23 from the previously disclosed 0.7% increase in group revenue. Strong performances from the higher-margin activities of the North American market, licensing and the Morris & Co brand were the keys drivers of a significant gross margin expansion, also supported by prices increases. A good start to H2 underpins the group’s anticipation to meet the Board’s expectations for the year, while simultaneously expressing caution in light of the various headwinds buffeting businesses globally. We are prudently reining back our forecasts to reflect that caution, while expecting the group to mitigate cost pressures and further benefit from its brand pricing power.
Resilient interim results in uncertain times
Against a backdrop of continuing global economic and market challenges, HeiQ has delivered a robust performance in H1. Management remains cautiously optimistic on meeting FY22E expectations. The company has made good progress on its four key technology platforms, including further product launches with strong revenue potential. The focus of the business model continues to shift towards commercialisation of its key technology platforms and IP (Intellectual Property) generation and monetisation, including licensing and partnerships with customers.
Resilient H1 performance + cautious optimism on H2 prospects = unchanged forecasts
Gear4music’s AGM trading update has reported sales growth in Q1 against tough comparatives. Trading over July and August was, however, impacted by the combination of extremely hot weather and the cost of living crisis, which has dampened discretionary consumer spending. While sales growth has picked up in September, the company believes it prudent to rein back full-year expectations given the prevailing market conditions. G4M is pointing to FY23E revenue of c.£155m with EBITDA of £9m.
Lack of visibility on consumer sentiment upturn prompts more prudent guidance
HeiQ has announced a reassuring trading update for the six months to 30 June ahead of its interim results announcement on 13 September. Turnover growth of more than 17% year on year for the period has been accompanied by a strong gross margin recovery compared with H2 FY21. There have been positive developments for three of its potential blockbuster technologies – HeiQ AeoniQ, HeiQ GrapheneX and HeiQ Synbio. HeiQ remains optimistic of trading in line with market guidance for FY22, assuming no unforeseen global economic events or further raw material price spikes.
Trading update shows continued momentum
Sanderson Design Group has reported a resilient H1 trading performance for the six months to 31 July, with group sales up 1% on a reported basis. Strong performances were delivered by the Morris & Co brand, Licensing, and in the US market, all of which delivered superior margins. Adjusted underlying H1 profit before tax is expected to be in line with Board expectations, as is full-year trading currently, notwithstanding ongoing market and consumer uncertainties in an inflationary global environment.
H1 trading update – a solid performance
Sanderson Design Group has announced the extension of its Morris & Co licensing agreement with NEXT plc for a period of up to two years from April 2023, covering NEXT’s in-store and online operations in the UK and Europe. This follows announcements of a Morris & Co collaboration with the Emery Walker Trust in May and a Harlequin collaboration deal with interior designer and TV broadcaster Sophie Robinson in June. The group will announce its H1 trading update for the six months to end July on 4 August.
Renewal of licensing agreement with NEXT
Distil’s Q1 trading update reflects the recently announced changes to the company’s business model, with the group assuming direct control of servicing its major UK customers, and employing a third-party distributor for the rest, from October onwards. In the interim, Distil and the outgoing UK distributor, Hi-Spirits, are running down their inventory of Distil brands. The company anticipates a one-off £580K adverse sales impact affecting H1 of the current year, with future years benefiting from taking direct control back in house and through better management of costs and brand promotional activities.