Inspecs revenue falls in first half but second half is stronger so far

​Eyewear specialist Inspecs released a sluggish set of figures on Tuesday with the UK-based firm sharing its report for January to June. It confirmed earlier guidance as revenue fell.

In fact, revenue was down 7.3% at £103 million, but the company said this was due to “the one-off elevated level of sales in Q1 2023”.

The company makes eyewear for brands including Joseph, Viktor & Rolf, Barbour, Henri-Lloyd, Superdry, Radley, Temperley, Talbot Runhof and more. And in better news, on a constant exchange rates basis, it said revenue decreased by only 5.2% to £105.4 million while the gross profit margin “significantly” improved by 100 basis points to 52.4% from 51.4% a year earlier.

Also promising was the fact that operating expenses fell by 3.6% to £50.7 million “due to the delivery of operational efficiencies”.

However, the falling sales impacted profits with underlying EBITDA down to £10.1 million from £12.1 million.

The company saw strong cash generation, with cash from operations of £12  million, up from £11.5 million for the same period in 2023. Net debt also fell.

The company said that while “overall market conditions remain soft, H2 trading to date has exceeded the prior year”, with the order book at the end of last month 7% higher year on year.

It highlighted the “successful launch of a key eyewear brand into all stores of a major global retailer” during the period and a “leading optical retailer in Canada distributing a major brand in all stores from Q4”.

Travel retail revenue increased 45% as a result of a continued push into key global outlets and the construction of the new Vietnam manufacturing facility was completed on time and on budget, with the fit-out ongoing. 

CEO Richard Peck said: “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 US, and we will continue to undertake further initiatives during the second half.

“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.

“Trading in the second half to date has exceeded the prior year and our 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.”