IG Design Group shares soared 20% to 81.6p in late afternoon trading on Tuesday following a growth in revenue to $965.1 million in FY 2022 against $873.2 million in FY 2021.
IG Design Group attributed its revenue climb to strong demand for its products and focus on delivering customer commitments.
The company announced an adjusted pre-tax loss of $1.3 million compared to an adjusted pre-tax profit of $32.8 million, along with a reported pre-tax profit of $2.2 million from a reported pre-tax profit of $14.7 million in the previous year.
The firm highlighted supply chain and cost inflation issues as the main factor behind its drop in profits, alongside a lack of freight availability throughout the financial year.
IG Design Group mentioned a net cash at year end fall to $30.2 million from $76.5 million as a result of increased costs and working capital requirements.
The company noted that a recent banking covenant amendment to March 2023 and a facility extension to March 2024 had secured access to financing to support its working capital requirements.
The design company confirmed a strong order book for FY 2023, which is currently at 71% of budgeted revenues, indicating continued demand and positive customer relationships.
The firm added that it was passing on cost inflation to customers where possible, resulting in a minor operating margin improvement estimated for FY 2023.
The company also commented that higher financing costs were expected linked to revised banking facilities and a maintained higher working capital as the group looked to manage its higher cost environment heading into the next term.
“The extent of the impact of the inflation and supply chain challenges in FY2022 have given us cause to re-examine our business, and we are therefore laying out today a foundation for a strategy with a clear focus on restoring profitable and sustainable growth,” said IG Design Group interim executive chair Stewart Gilliland.
“While it will no doubt evolve further over the coming months, the Board and wider management team are fully aligned, focused on mitigating cost pressures and creating a more resilient business.”
“This will provide a stronger base on which we can build in the future.”
IG Design Group reported a dividend of 1.7c per share from 11.8c per share in FY 2022.
