Inspecs Group, a leading British eyewear specialist with a global focus, has recently released its performance report for 2023. Although the company projects double-digit profit growth, its revenue for the year fell flat and came in below market expectations. Inspecs is known for manufacturing its own brands as well as licensed products for renowned labels such as Joseph, Viktor&Rolf, Barbour, Liberty, Superdry, Radley, Temperley, Ted Baker, and Talbot Runhof.

While the final results will be released in April, Inspecs has provided a trading update for the 12-month period ending on December 31st. The company primarily focused on margin improvement throughout the year and anticipates an unaudited adjusted underlying EBITDA increase of 16.1%, amounting to £18 million. However, Inspecs admitted that its overall performance fell short of expectations due to weaker trading in December.

In terms of revenue, Inspecs reported a figure of £200.3 million, which can be described as “broadly flat” in comparison to 2022. It is important to note that this actually represents a slight decline from the £201.3 million revenue of the previous year. When taking into account constant exchange rates, revenue experienced a more significant decrease of £3.2 million, totaling £197.8 million.

Despite this setback, Inspecs remains optimistic for 2024. The company credits new accounts and distribution as contributing factors to its positive outlook. Inspecs also highlighted its operational efficiencies, which led to an increased EBITDA margin on sales in 2023. The company expects further progress in this area in the upcoming year. Inspecs emphasized its ongoing expansion in Vietnam, which is on schedule and within budget. Production is anticipated to begin in the first half of 2024. Additionally, the company reported a reduction in losses from its Norville division, thanks to successful sales growth and improved performance under new management.

Inspecs’ Skunk Works Research and Development (R&D) operation continues to drive innovation and generate commercial revenues. The integration of its US businesses, which commenced in 2023, is expected to create synergies in the Americas throughout 2024. Notably, despite capital expenditure in Vietnam, Inspecs managed to reduce its net debt as a result of significant cash generation in 2023.

Following the reporting period, Inspecs made a strategic acquisition by purchasing Norwegian distributor A-Optikk AS for a nominal sum. This acquisition marks a renewed focus on strategic acquisitions for Inspecs and contributes to the group’s vertical integration. It will strengthen the company’s expansion plans in the Nordic market and provide a new distribution hub in Norway.

CEO Richard Peck acknowledged the impact of the softer trading environment on Inspecs’ revenue performance in December. However, he expressed optimism about the company’s focus on operational efficiencies in 2024. Peck highlighted the company’s reduced net debt and significant investment in additional manufacturing capacity, with the new Vietnam facility set to commence operations in the first half of 2024. With a stronger balance sheet and extended financing facilities, Inspecs is poised to drive sales growth in 2024 while further enhancing operational efficiency and capitalizing on group synergies.

Useful links:
1. Inspecs Group Official Website
2. Inspecs Group Brands