7 December 2021

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

THE PEBBLE GROUP PLC

("The Pebble Group," the "Company" or the "Group")

AIM: PEBB

TRADING UPDATE

Results for FY 21 expected to be at least in line with market expectations

The Board of The Pebble Group, a leading provider of technology, services and products to the global promotional products industry, is pleased to announce that the Group's results for the year ending 31 December 2021 ("FY 21") are expected to be at least in line with market expectations.

Both the Group's businesses, Facilisgroup and Brand Addition, continue to trade well in H2 21.

Highlights

Business update

Facilisgroup

Alongside our FY 20 Results announced in March 2021, Facilisgroup shared its aspiration to be the technology leader in the North American promotional products market and in doing so become a $50m annual recurring revenue (ARR) business by the end of 2024. We set annual milestones to this goal for Partner (customer) numbers; Gross Merchandise Value (GMV), processed through our technology; and spend by Partners through our Preferred Supplier network. By 31 December 2021, we expect our FY 21 milestones to be met with Partners, implemented or contracted and awaiting implementation, to be circa 205; GMV to be greater than $1.10bn; and spend with Preferred Suppliers to be circa $0.33bn. These indicators demonstrate the continued progress of the business and, together with its excellent retention record, underpin Facilisgroup's financial prospects into 2022.

Earlier in 2021, we launched, in beta form, our second technology product, an ecommerce platform focused on the promotional products market. Branded Commercio, this product allows promotional product distributors to easily implement bespoke ecommerce stores for their customers. We plan to exit beta stage in Q2 22, when the revenue generation from this product is expected to start. Our initial pricing model will be based upon the number of stores utilised by each customer, in effect increasing our percentage fee per dollar of GMV.

Facilisgroup has a highly profitable business model currently achieving EBITDA margins of more than 50%. Having set out our growth strategy and invested into our technology and team through 2020 and 2021, we intend to accelerate spend in our sales and marketing activities in 2022 and 2023 to support the achievement of our $50m ARR aspiration. As a result of this further investment in growth, we expect historic EBITDA margins to reduce by circa 5% to 10% in these years, with the belief that delivering ARR scale in Facilisgroup creates significant value.

Brand Addition

Brand Addition remains focused on its core strategy to win, grow, and retain multi-country out-sourced contracts, often valued in millions of pounds per year, with many of the world's leading brands. These businesses trust Brand Addition to protect their brands and create lasting impressions with their employees, customers, and wider stakeholders, through the strategic use of promotional merchandise.

We expect Brand Addition's revenue in FY 21 to be circa £100m (FY 20 £72.6m, FY 19 £97.9m), representing an immediate and full recovery from the demand challenges of 2020. This has been achieved against a challenging operational backdrop carried forward from COVID-19 lockdowns, the cross-border trading changes resulting from Brexit, and the global freight and supply chain disruption. This performance is a testament to the quality and determination of the whole team and the value clients place upon the services delivered by the business.

Looking ahead, new client contracts won in 2021, which are currently being implemented, are expected to contribute positively to FY 22 revenues.

Environmental, Social and Governance ("ESG")

We were pleased to publish our first ESG Report in October 2021, which set out the strategy and framework of our approach to ESG. The Group is committed to taking an industry leading position on ESG with the Board and senior management fully committed to building a business which invests responsibly in long term stakeholder relationships.

Balance sheet and cash

The Group's cash balances and working capital cycle has followed its usual and expected path with the working capital requirement reducing in Q4 20. At 6 December 2021, the Group had net cash excluding IFRS 16 lease liabilities of £8.8m, with no monies drawn down from the Company's £10.0m committed revolving credit facility. At the year end, 31 December 2021, we expect the net cash balance, excluding IFRS 16 lease liabilities, to be no less than £9.0m (31 December 2020: £7.1m).

Outlook

The Board expects the Group's results for FY 21 to be at least in line with market expectations.

The Group has a focused strategy to invest in scaling Facilisgroup's recurring revenues, alongside the continued attraction and retention of major contracts at Brand Addition and looks forward to updating stakeholders on progress against these goals throughout 2022.

Enquiries:

About The Pebble Group plc - www.thepebblegroup.com 

The Pebble Group is a provider of technology, services and products to the global promotional products industry, comprising two differentiated businesses, focused on specific areas of the promotional products market:

Facilisgroup - www.facilisgroup.com

Facilisgroup focuses on supporting the growth of mid-sized Promotional Product businesses in North America by providing a technology platform, which enables those businesses to benefit from significant business efficiency and gain meaningful supply chain advantage from the ability to purchase from quality suppliers under preferred terms.

Brand Addition - www.brandaddition.com

Brand Addition focuses upon providing promotional products and related services under contract to some of the world's most recognisable brands. Its largest contracts are valued in the millions of pounds with the products and services supplied being used for brand building, customer engagement and employee rewards. Working in close collaboration with its clients, Brand Addition designs products and product ranges, hosts client-branded global web stores and provides international sourcing and distribution solutions.

We categorise our revenues into two divisions, Corporate Programmes, that supports our clients' general marketing activities, and Consumer Promotions, that supports our clients in driving their own sales volumes.

The Pebble Group aims to act responsibility through effective management of its Environmental, Social and Governance ("ESG"). To find out more, read our ESG report - The Pebble Group ESG report 2021.