By Maitane Sardon

Shares in IG Design Group slumped after the gift wrap manufacturer said it expects full-year profit to come in well below market expectations, as challenging retail conditions hurt sales.

Shares were down 87 pence, or 61%, at 55.50 pence on Friday in early European trading. They have been down 58% over the past three months.

The company said it expects to post a 10% fall in revenue for the year ending in March 2025, with declines in both its Americas and International divisions.

Adjusted full-year profit is expected at around breakeven, significantly impacted and well below last year's $31.1 million, the company said. Market expectations were $32 million.

The company, which was working on the turnaround of its Americas division, said trading across both divisions was hurt during the key Christmas period, with Americas particularly affected.

IG Design pulled its guidance for the years beyond 2025 and said it will provide a further update on its results for the year ending March 31 in late April this year.

"The continuing challenging retail backdrop, especially in the U.S. market has undoubtably impacted the performance, position and confidence of many of our customers, with clear winners and losers emerging," IG Design Group Nonexecutive Chairman Stewart Gilliland said. "Whilst we do work with a significant proportion of the winners, our exposure to some of those finding things more challenging means that we are exposed to changing fortunes in the retail space."

The results were very disappointing, Panmure Liberum analyst Wayne Brown said in a research note. "If investors were not aware of just how tough the retail backdrop is, then IG Design is at the coal face seeing the outcome of this."

Write to Maitane Sardon at maitane.sardon@wsj.com

(END) Dow Jones Newswires

January 17, 2025 04:54 ET (09:54 GMT)

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