IG Design is confident that orders for gift wrap, greetings cards and Christmas crackers (it owns the Tom Thumb brand) will be on time, despite problems with supply chains.
This is all well as Christmas related products accounted for 46% of its sales in the first half of the financial year. Overall, sales are up 11% in the first half to $483.9 million ($434.6 million) with pretax profits rising to $18.9 million ($17.1 million). The figures are quoted in dollars as two-thirds of its revenues derive from the US. It is consolidating warehousing and print production to a single site in Mississippi, which means moving a Uteco press for printing gift wrap across the country to the plant during the second six months of the financial year.
The company uses the same Italian presses at its site in Hengoed, South Wales. The UK now forms part of the International division along with Australia and activities in mainland Europe.
Demand for the Eco Nature portfolio of sustainable first products has led to strong sales, with retailers selling out of the lines. Products include gift wrap, bags, notebooks and greetings cards made from recycled papers and carrying botanical designs. Everything is recyclable, including the non plastic wrap for presentation bows.
The company spent $3.1 million on capital investment in the first half, explaining that this is a maintenance type spend, not additional capacity. A £3 million investment to produce paper fibre bags and to tie gift bows has been made over the last two years in the UK.
Despite the challenges and headwinds of cost and supply chain issues, IG Design is optimistic. CEO Paul Fineman says: “Despite being constrained at the half year by extraordinary supply chain challenges, our opportunity for long term profitable growth remains undiminished.
“As with many businesses, our current priority is managing the supply shortages and extreme inflationary pressures. Whilst in the short term we are not seeing an overall improvement in these dynamics, it is certain that at some stage supply issues will improve and we will mitigate the cost pressures, although it would be foolhardy to predict exactly when that will be. We therefore continue to focus on customer service and quality of our product propositions, both of which are key to the long term success of the business.
He adds: “We are confident our strategy remains the right one in the longer term and we remain committed to the goals outlined in the Growth plan announced in June this year.”
The business has already logged orders equivalent to 91% of its sales target for the financial year that ends in March 2022.
