IGR

After a 2007/08 that management would rather forget the tide finally seems to be turning at wrapping paper and novelty specialist International Greetings (IGR:AIM). The closure of a factory in Latvia and substantial redundancies in south Wales have helped to dramatically improve costs allowing the company to issue an upbeat trading statement compared with the three profits warnings made last year. One third of its sales come from the own label market in the UK leaving it vulnerable to pressure from retailers. However, the house broker, Arden Partners, believes that the changes will save £8.5 million for the rest of this year and £10.5 million in a full calendar year. In addition, surplus property worth some £10 million will be sold.

The shares in the company have doubled since the end of March to 40p but are still miles adrift of the highs of over 400p achieved early last year. Arden is forecasting 2008/09 earnings of 4.7p which would put the shares on an attractive PE of just 8.5.

Shares says: Trading is improving and takeover rumours continue to sprout.

by: John Marshall