Bath-based Inspecs Group has posted the first set of financial results since the company was listed on the London Stock Exchange’s Alternative Investment Market (AIM) in February.
In the year to December 31, 2019, revenue increased by 6.9% to $61.25m (£49.5), while pre-tax profit increased by 102.4% to $7.35m (£5.9m). The group generated 24.9% of its revenue in the UK and 75.1% internationally, where it now operates in over 80 countries and approximately 30,000 points of sale.
‘This was a milestone year for Inspecs as we successfully listed on AIM and continued to make significant progress with our growth strategy, culminating in a strong set of results,’ said chief executive Robin Totterman.
The group’s manufacturing capabilities nearly doubled during 2019, with its Vietnam factory expanded from 4,300sqm to 8,800sqm, allowing frame-making capacity to grow from 3.2m to an expected 7m in future. The company said this would benefit export to the Americas with tariff-free access and continued investment at its factory in China would increase capacity in future. Production has also started at a new factory in Cadore, northern Italy, where the group’s premium frames would be produced.
The company also announced several key appointments, including former Luxottica retail managing director Richard Peck and founder of the Licensing Company, Angela Farrugia, as non-executive directors. Inspecs said Farrugia was named one of the most influential women in the global licensing industry in 2018 and had used her extensive brand licensing expertise and experience to advise clients across the consumer, fashion and retail sectors.
Steve Tulba, formerly managing director of Mondottica also joins as chief commercial officer.
Coronavirus response
Totterman said while the performance had been pleasing, recent months had seen Inspecs and its management team focus squarely on managing the impact of Covid-19.
‘We have taken a number of actions to reduce costs, preserve cash and protect our balance sheet and we are confident that we have a robust liquidity position which will see us through the challenges ahead.’
Company management have elected not to pay a dividend until the full effects of the pandemic were known and have taken a 60% cut to their salaries. A four-day week has been implemented and staff in the UK and USA have had salaries reduced by 20%.
‘Our number one priority at all times has been the health, safety and wellbeing of our brilliant people and I am proud of the way our core values have shone through. Nowhere was this better demonstrated than by the speed at which we diverted production to supply safety eyewear to frontline medical professionals in the NHS,’ he said.
‘Over the long term, the structural growth drivers in the $131bn global eyewear market remain unchanged and people will still require vision correction. Our resilient vertically integrated business model and manufacturing capabilities combined with the innovation of our design teams and the strength of our customer relationships, leaves us well positioned to benefit from the recovery as a leaner, more efficient business.’
Factories in China and Vietnam were almost back to full production capacity, said the company, but closure of outlets will clearly have an impact on the rest of the year’s financial performance. ‘Although our factories are continuing to produce existing orders received in the early part of the year, the continued lack of sales by our locked-down retail customers means that stock levels remain static, and requests for delays in delivering stock are more frequent. Where we can ship stock by sea, we do so, as it saves cost and adds four weeks to the lead time which will help phase in the new collections at an appropriate time for the market,’ said Totterman.
The company said it was in discussions with a number of large new customers who would utilise its Vietnam factory for their 2021 collections. ‘If this comes to fruition, we should see continued expansion of the group in the future once the macroeconomic situation has returned to previous levels.
‘We expect a very active Q4 and possibly Q3 when the effects of the virus on the industry will be clearer,’ said Totterman.