Inspecs swung to an interim loss in its first results as a public company, but forecast a better second half despite the impact of Covid-19.
The British company, which joined the London Alternative Investment Market in February, reported a pretax loss of $8.3 million in the first six months of the year compared with a profit of $5.1 million a year ago as coronavirus lockdowns shut most big markets for its products.
Revenues almost halved to $16.7 million from $30.4 million a year earlier. Underlying earnings before interest, tax, depreciation and amortization (Ebitda) slumped to $677,000 from $6.6 million.
However, the group ended up with a net cash of $10.5 million at the end of June compared with $13.7 million in net debt at the end of 2019.
Robin Totterman, the chief executiv, said the firm saw a recovery in sales and orders at the end of the first half, a trend which has continued.
“The majority of the group’s global retail chains and independent opticians have now reopened and, whilst it is apparent that footfall is reduced while outlets are operating under Covid-19 restrictions, the numbers of customers actually transacting as a proportion has increased,” he said.
”The second half has started well and we have experienced a significant increase in our order book.”
Global retail chains have started to use up existing stock supplies and are reordering, he pointed out, but also cautioned that “whether this is sustained going forward will be dependent on further lockdowns and the general state of the economy and consumer spending.”
“Although 2020 as a whole will be severely affected by Covid-19, current indications are that the second half of the year will see a continued improvement in the business performance over the first half,” said Totterman.
“The group is now back to generating underlying Ebitda and, notwithstanding the impacts of any new lockdowns, I am cautiously optimistic for the second half of the year and continue to look to the group’s long-term future with confidence.”
Inspecs, which makes frames for brands such as Superdry and Radley, launched a new business-to-business digital platform in September for trade customers enabling clients to see and order its entire catalogue in one place.
The company added that construction work on its Vietnam plant made good progress during the first half despite Covid-19-related travel restrictions, with the site expected to be ready for frame production shortly.
Regarding the purchase of the manufacturing operations of The Norville Group on July 13, Inspecs noted that the acquisition further enhances its vertically integrated solution package, enabling it to supply a fully glazed frame and lens package to the consumer. It added that the integration of Norville is progressing well and that it was able to retain 80 of the original team. Norville had been placed into administration after becoming insolvent.
Inspecs added that acquisitions remain a ”key pillar” of its strategy and that it will continue to evaluate further opportunities.