IG Design: Cards and Christmas cracker giant nearly triples profit despite ‘soft demand’

IG Design, the world’s largest maker of greeting cards, wrapping paper and gift bags, has nearly tripled its annual profit despite a drop in revenue on “soft demand”, as it focuses on simplifying the business.

The London-listed Christmas cracker maker reported an adjusted pretax profit of $25.9m (£20.4m) for the financial year ending on 31 March 2024, up from $9.2m (£7.3m) the previous year.

The profit was in line with the company’s guidance upgrade at the end of April, before which analysts had forecast a figure of $20.5m (£16.2m). The upgrade in April sent IG’s shares up 30 per cent and they remain up 57 per cent so far this year.

However, IG also reported on Tuesday that revenue dropped to $800.1m (£630.6m) from $890.3m (£701.8m) over the 12 months, which it blamed on underperformance from its Americas division in the first half of the year and “continuing softness” in the UK and Australia.

The firm said continental Europe had proven “the exception” to the “soft demand” seen across a number of its markets.

Since becoming chief executive last April, Paul Bal has focused on exiting lossmaking contracts, cutting costs and rebuilding IG’s profit margins, which fell during the Covid-19 pandemic as the price of paper and shipping jumped while demand fell.

IG’s adjusted operating profit margin rose to 3.9 per cent for the last financial year, up 210 basis points compared to 2023. The firm said it remained confident that its margin would return to a pre-Covid level of 4.5 per cent by 31 March 2025.

Stewart Gilliland, IG’s chair, commented: “With an invigorated senior leadership across the group, our financing secured and a strengthened and stable board, the group is well-set to complete its recovery over the coming year; and embark on an exciting growth-focused strategy for the years beyond.

“Whilst the global political-economic backdrop could be better, the continued support of our customers and suppliers, who are working closely with our talented teams, positions us well to deliver better shareholder value.”