Collapse in pound brings Christmas cheer for IG Design Group boss
Britain's biggest wrapping paper company has described the collapse in the pound as "the icing on the cake" as it cheers bumper Christmas trading.
IG Design Group chief executive Paul Fineman told the Press Association that the company saw greater benefits from international sales following sterling's collapse, with foreign currencies boosting earnings in the holiday run-up.
It follows an 18% drop against the US dollar and a 10% fall against the euro since the UK referendum, which has also made British goods cheaper for international customers - including the company's gift wrap, bags, greeting cards, Christmas crackers and stationery.
"I'm pleased to say that a very significant part of our growth is not just about foreign exchange translation. The foreign exchange translation is the icing on the cake, not the cake itself," he said.
"Certainly it's helped us in terms of our export activities, which we're very pleased with, but we've had very good momentum in terms of growth outside the UK for several years," he said.
In its half-year results released in November, the company reported a 21.5% rise in sales to £145.5 million, and a 57.5% rise in pre-tax profit to £8.2 million in the six months to September 30. Currency translation boosted profits by 18.6%.
While the AIM-listed company is still awaiting a raft of electric point-of-sales (Epos) data that will confirm year-end sales, Mr Fineman stressed that the company has been experiencing "strong" organic growth in markets including the US, Australia, continental Europe and the UK, with discounters like Aldi and Lidl driving a healthy proportion of revenues.
"Overall, it seems like a pretty strong Christmas, across product categories: bags, greeting cards and crackers too," Mr Fineman said.
"And of all the data we have had back so far, we're seeing most channels performing well but the entry level and deep discounting is noticeably strong, I would say double-digit growth."
Though the holiday season has just came to a close, Mr Fineman is now gearing up for Christmas 2017.
Designs for products such as wrapping paper and crackers were made last summer, with manufacturing set to start this month, including at its UK factory near Cardiff.
IG Design Group employs around 650 people in the UK, including around 70 designers, while global staff fluctuates from 1,400 to 2,200 globally in the peak season.
Christmas products currently account for around 51% of company sales, but that follows a major restructuring and diversification programme that brought Christmas-dependent revenues down from around 85%.
It was a major debt pile accumulated during a number of acquisitions that led to the company-wide overhaul in 2008.
Seven years later, Mr Fineman said the company is treading more carefully.
"We are incredibly conscious about how important it is for us to be cash generative, and to take up business because it's profitable for us to do so."
Still, the company is lugging around £76.4 million in net debt.
But the group is now in a position where it can consider takeovers and expand the business into more challenging markets like Japan - which Mr Fineman says was a "tough nut to crack".
While there are no "imminent" acquisitions in the pipeline, he said options are open.
"There's not a week that goes by when a business is not either offered to us or we're in dialogue with someone," Mr Fineman said, adding that he would not rule out an acquisition by year-end.