Eyewear designer Inspecs reported a rise in like-for-like first quarter revenues despite the Covid-19 pandemic’s impact on operations. The frame maker and distributor posted revenues of $67 million for the three months to March 31, up 5 percent on a comparable basis year on year, according to a company spokesperson.The reported revenue figure includes three complete months of contributions from Germany-based Eschenbach, acquired last November for €95 million.
Overall, Inspecs said it had delivered a “strong performance” despite nationwide lockdowns in the UK, Germany and France, and some US states.“Whilst this performance marks a positive start to the year, the board remains cautious on 2021 as Covid-19 remains prevalent across the world,” the company said in a statement. With travel restrictions still in place, analysts are expecting a subdued summer for sunglasses sales.
Inspecs said the Eschenbach integration was “progressing to plan and the benefits of the enlarged group working together starting to be realized, with a number of joint projects underway.” According to the company’s spokesperson, the projects include lens manufacturing for Eschenbach by Norville – bought out administration last July for £2.4m (€2.8m-$3.3m) – and Eschenbach distributing licensed brands for Inspecs to independent opticians.
However, these were “just underway and will take time to ramp up,” the spokesperson added. “In-house manufacturing has to be prototyped in relation to some product lines for Eschenbach.”
Analysts at house brokerage Peel Hunt said the first quarter performance means Inspecs is “well on-track compared to our full-year sales forecast of $241m.” In a note to clients, the broker forecasts potential synergies from the Eschenbach tie-up of $8m to $16m, including both revenue and costs, to be delivered in 2022.
“We see numerous opportunities for Inspecs as it now has a platform to cross-sell products, add further brands and broaden the geographic presence,” Peel Hunt commented. They also pointed to “numerous revenue opportunities”, such as taking Inspec’s brands – Caterpillar, O’Neill and Superdry – into the distribution network of Tura, Eschenbach’s main US business.
There was also scope to use Norville for Eschenbach’s lens demand and taking Eschenbach’s brands into additional distribution channels, Peel Hunt said. “We also see the combined business as having a strong platform for further acquisitions and for brand owners, given the distribution platform in both retail chains and independent opticians.”
Inspecs will release its final results on June 18.