International Greetings

HOLD

11/08/2011 Ben Jaglom

Card maker International Greetings (IGR) has reported a 47% increase in pre-tax profits to £5.2m for the year to March as its recovery continued.

The AIM-quoted venture says sales rose 7.4% to £223m and enthuses that it achieved 'record breaking production levels' at its factory in China. The £5.2m compares with a 2010 in which IGR had made some significant restructuring efforts including the paring of headcount by 800 personnel and the closure of its Latvian operations after losing £22.8m and £11.4m in 2009 and 2008. Net debt was reduced from £48.8m to £44.4m.

Chief executive officer Paul Fineman, who took over in January 2009, remarks the company made 'another good year of progress' having growth both sales and profits 'whilst continuing to reduce debt.' IGR's UK business grew sales from £81.8m to £89.9m, while sales in the USA and Europe stayed flat. Sales to Australia and New Zealand increased from £15.3m to £25.6m. Relocating of much of its manufacturing to China enabled the company to reach the 'record breaking' production levels because its Chinese operations produced 1.5m metres as day of gift wrap and one million crackers a day.

Analysts at house broker Arden are forecasting pre-tax profits of £6.9m (for earnings of 10.9p a share) on turnover of £223m in 2012.

Last rated by Growth Company Investor as a hold the company has made significant progress towards rebuilding its business following two years of horrendous losses. It looks back on track and seems fairly valued at the current price, bearing in mind the still-considerable debt pile of £44.4m. We retain our hold rating.