BATH, England—Inspecs Group plc, (LSE: SPEC), a global eyewear and lens design house and manufacturer, reported its 2024 unaudited interim results for the six months ended June 30, 2024, showing that group revenue in the first half of 2024 was below last year, decreasing by 7.3 percent to £103 million compared with £111 million in the first half of 2023. The company attributed this to a one-off elevated level of sales in Q1 2023. On a constant exchange rate basis, revenue decreased by 5.2 percent to £105.4 million compared with £111.2 million in the first half of 2023. Gross profit margin significantly increased by 100 basis points to 52.4 percent, compared with 51.4 percent in the first half of 2023.

The company noted that underlying EBITDA reduced to £10.1 million, compared with £12.1 million in the first half of 2023, due to a decrease in revenue in the period, partially offset by cost savings. Cash generated from operations was £12.0 million, compared with £11.5 million in the first half of 2023, while working capital was reduced by £2.4 million. The company’s operating expenses decreased by 3.6 percent to £50.7 million, compared with £52 million in the first half of 2023, due to the delivery of operational efficiencies. 

“The Group has made steady progress during the period, with significantly improved gross profit margins delivered across all divisions and strong cash generation. We have achieved sustainable cost savings through the ongoing implementation of operational efficiencies, particularly in the U.S., and we will continue to undertake further initiatives during the second half,” said Richard Peck, chief executive officer.

Noting that overall market conditions remain soft, the second half of 2024 trading to date has exceeded the prior year, according to Inspecs, with the order book 7 percent higher than August 2023, as of the end of August 2024. The company added that the board is confident in meeting market expectations for the full year.

Operational highlights included the successful launch of a key eyewear brand into all stores of a major global retailer, the company stated. Additionally, two major retail chains in the United States are distributing additional brands from Q4 2024, while a leading optical retailer in Canada is distributing a major brand in all stores from Q4 2024; travel retail revenue increased by 45 percent as a result of a continued push into key global outlets; and further operational efficiency gains through the successful integration of Inspecs USA, including consolidation of warehousing facilities, the company noted.

Inspecs shared that construction of the new Vietnam manufacturing facility was completed on time and budget, with fit-out ongoing. The additional facility will enable Inspecs to increase manufacturing capacity and ensure better operational efficiencies from existing production.

“We have made good progress against our global distribution strategic pillar, evidenced through the agreement of new distribution and the expansion of existing partnerships with global retailers, as well as achieving revenue growth in travel retail. Despite ongoing challenges relating to inflationary pressures and the market readjusting after competitor acquisitions, the optical market remains resilient,” said Peck adding, that trading in the second half to date has exceeded the prior year and the company's order books are ahead of last year as of the end of August.

“It is expected that the reduction in net debt will accelerate in the second half due to reduced capital expenditure, following a period of increased investment in the new Vietnam manufacturing facility. Whilst we remain cautious in relation to market conditions and focused on the delivery of our cost-saving initiatives and planned shipments in Q4, the board is confident in meeting market expectations for the full year,” Peck said.