IG Design Group PLC (LON:INGR) continues to deliver impressive growth. Its Q1 trading update shows momentum carrying into the new financial year and the group on track to meet (and possibly exceed) our FY18 target. Initiatives to stimulate organic growth and further benefits of last year’s US acquisition are driving progress, with the stronger balance sheet also giving potential for further acquisitions. The share price has performed well over the last year and the valuation is underpinned by the strong cash generation.
All territories at least in line with expectations
The Americas are the group’s largest sales region (49% of FY17 pro-forma revenue). Creative play grew strongly to 18% of regional revenues in FY17 and the momentum has clearly carried over into FY18, with plenty of opportunities to expand the range with value retailers and drugstores. The Australian region has now got going with its major new discount customer for everyday greeting cards and the benefits of scale are starting to register. The UK stationery and creative play segments, which stuttered last year, have been reorganised as a unified operation and are now back on track, with the new retail collateral offer shipping in H2. Continental Europe continues to perform well both through its own initiatives and from market share gains by its customers. Further details on the operations can be found in our Outlook note.
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