Gift packaging-to-greetings cards maker International Greetings (IGR:AIM) is in demand, the shares sparking up 10.6% to 172.5p on a year-end trading update packed full of positives. CEO Paul Fineman pleases by flagging a forecast-busting financial performance for the year to March and guiding towards a higher-than-expected shareholder reward.
SHARES highlighted the potential for positive near-term newsflow from International Greetings in this week's small caps section of the magazine, where we also outlined the company's key competitive strengths and international export growth potential.
The designer and distributor of stationery and creative play products, whose enviable licensed product portfolio includes ranges launched under brands including Star Wars, Minions and Coca-Cola, has duly delivered.
Fineman (pictured above on the left) announces better-than-expected results for the year to March, all geographic regions delivering year-on-year growth to drive another year of double-digit earnings per share growth.
Positive momentum has returned to International Greetings' US business, reinvigorated under new regional boss Gideon Schlessinger and where the small cap is generating growth across all channels, among them the discounters and food and drug store chains.
'In the USA, the commercial, operational and financial performance of our business has been extremely encouraging', says the CEO, adding that recent investment in manufacturing assets is set to accelerate the group's profitable growth 'in the world's single largest market'.
Fineman also highlights a profits beat in the UK and China, improved returns in Australia, not to mention the successful mitigation of currency headwinds in Europe with the help of top-line growth and canny product mix management.
The £92 million cap has been re-energised and recently returned to the dividend list, having paid down significant amounts of debt since 2009. A strong trading performance and resultant cash generation means leverage has come down quicker-than-expected.
As such, the company now plans to pay a final dividend of 1.75p, resulting in a full-year dividend of 2.5p (2015: 1p), which is comfortably ahead of the 2p payout forecast by analysts. Cenkos has increased its March 2016 earnings per share estimate by 8% to 12.8p and reduced its year-end net debt forecast by more than £8 million to £18.1 million.
'This is a particularly exciting stage of our development in which we remain well positioned for organic growth and continue to seek compelling acquisition opportunities,' enthuses Fineman.
'Our culture of continuous improvement and our focus on creating commercially successful designs and products delivers a winning combination for our customers and trading partners. We are delighted to be meeting our core objectives of growth in underlying EPS and dividends whilst reducing average leverage all ahead of schedule.'