International Greetings

Greeting cards to wrapping paper manufacturer International Greetings (IGR) has reported a 50% rise in adjusted pre-tax profits following a period of cost-cutting.

The AIM-quoted concern declared profits of £3.2m before tax and exceptional items (2010: £2.1m) on sales of £110.3m (2010: £104.5m) for the six months to September. Net debt stood at £88.5m (£86.4m). Exceptional items stood at £1.1m and related to restructuring charges and provisions against its assets in China before its factory relocated.

Having spent the past year working on relocating its manufacturing facility to China the group noted that it had completed the card manufacturing for the Christmas season through its Chinese facility. Furthermore the company enthused that it has 'instigated our plans for the relocation of our facilities in good time' while at the same time focusing on meeting 'future production deadlines' while maintaining what it called 'our competitive position'.

Sales to the UK and Asia were flat at £62.3m (2010: £62.1m) while revenues for Europe rose from £12.7m to £13.7m. Australia performed particularly well with turnover to the region climbing 22.8% to £14.1m. Looking ahead the company noted it expects conditions to 'remain challenging' but that it will continue to 'drive further efficiencies'.

Analysts at house broker Arden Partners are forecasting pre-tax profits of £6.9m (EPS: 7.1p) on sales of £223m for the year to March 2012. In 2013 profits of £8.5m (EPS: 9.1p) on revenues of £230m are penciled in.

Last rated by Growth Company Investor this November at 61.5p as a hold, the shares currently trade at 63p. A business that has long battled with its enormous debt pile, the move to China was part of a crucial attempt by the business to cut costs, and to date it looks as if its efforts have started to bear fruit. Hold.