International Greetings first-half sales drop on currency volatility

Giftware and packaging designer and maker International Greetings blamed currency volatility for lower sales and said profits in its Australian business would take a short-term hit from development costs.

The group reported a 1.5% fall in sales for the six months ended 30 September to £111.9m, compared to a year prior at £113.6m. due to a £2m impact from exchange rates on translation of overseas sales.

But International Greetings said like-for-like sales excluding the currency hit were slightly higher following incremental growth in Europe and the US market.

The firm said both the US and European regions offer lower profit margins compared to other areas such as Australia. But it added that development of its Australian joint venture would hit its profits in the short term.

"Whilst, in the short term, this will impact profitability, we are encouraged at the prospects now offered through establishing new opportunities for expansion," it said.

Gross profit margins also fell 1% during the period to equal 18%. The firm blamed the disappointing results on the above mentioned incremental sales in less lucrative regions.

Profit before tax, non-cash long term incentive plan charges and exceptional items rose considerably by 7.1% to £4m, compared with £3.7m a year prior.

Despite encouraging profits, the board reportedly does not intend to pay an interim dividend.

As of 8:09am the firm’s share price slipped 6.58% to 71p per share.