Representing 28% of total group sales, UK revenue was up by 3% year on-year to £127.1m in the company’s full-year results for the period ending 31 March 2019, delivering adjusted operating profit of £8.1m, also up 3%. Its adjusted margin for 2019 was 6.4%, the same as 2018.
The Bedfordshire-headquarted company said the unification of its UK business continued to evolve this year, with a further rationalisation of the UK team and further development of processes and activities to leverage its scale in the UK.
It added that while it has seen benefits from this move towards increased cohesiveness, “the market is still very competitive, reflected by our flat adjusted operating margins”.
The firm said its ‘not-for-resale’ branded bags for retailers initiative, launched in 2018, continues to be a growth area for the UK business.
It invested in a second bag machine for its UK factory during the financial year. Sales in this product category reportedly increased by 53% compared to 2018, and 2020 is expected to see further growth in bag production volumes with new customers.
Additional product innovation during the financial year included the development and launch of the group’s sustainable product portfolio, which includes stationery made from recycled materials.
Highlights included developing a completely recyclable cracker range for UK customers, removing plastic from a selection of product packaging, removing non-recyclable glitter from a number of wrap, bag and card ranges, and reducing the size of wrap cores to further rationalise shipping volumes and cost.
The group also reported “outstanding performance” in the US, Europe and Australia. The Americas represented 50% of the group’s sales, with continental Europe representing 14% and Australia 9%.
Overall group sales were up by 37% to £448.8m, with adjusted operating profit jumping by 41% to £32.6m. Adjusted pre-tax profit, meanwhile, climbed by 39% to £30.3m.
Reported pre-tax-profit, however, was reduced from £19.7m in 2018 to £17.3m in the current year, which the group said was primarily as a result of the exceptional cost associated with last summer’s acquisition of US company Impact Innovations and the subsequent restructuring in the US.
“We have generated sales of more than 750 million units of consumer products across over 50,000 individually designed items,” said chief executive Paul Fineman.
“This tremendous level of innovation, together with our ability to manage and leverage considerable scale, has resulted in our business meeting ambitious targets and achieving record revenues, profit, cash generation and EPS. As a consequence, we have significantly enhanced our full year dividend up 42% to 8.50p.
“Having successfully concluded, in August 2018, the acquisition of Impact, I am particularly pleased that we have hit the ground running in terms of delivering on our plans for operational and commercial synergies that were identified at the time of the acquisition; an excellent example of collaboration and team work amongst our new and enlarged team in the US.”
He added: “As ever, our eye is on the future and we continue to invest to enhance our competitive advantage. We have delivered £7.9m of capital expenditure projects within the year and have additional exciting fast payback investments taking place in 2020.
“Furthermore, our investment in our team continues at pace with the focus on leveraging scale and driving innovation. Supported by an ever-strengthening balance sheet, our business remains very well placed to continue to grow both organically and through carefully considered M&A opportunities and we look forward to the future with enthusiasm and optimism.”
The firm’s shares fell by around 2% to 595p on the publication of the results on Tuesday (11 June) but had since risen to 622p at the time of writing.
