22 November 2023  

THE PEBBLE GROUP PLC 

("The Pebble Group" or the "Group") 

Trading update

The Pebble Group (AIM: PEBB, OTCQX: PEBBF), a leading provider of digital commerce, products and related services to the global promotional products industry, is today updating the market on its expected performance in the year to 31 December 2023 ("FY 23").

Whilst we expect Facilisgroup to achieve revenue growth in the year, order intake at Brand Addition has been lower than anticipated and Group revenues for FY 23 are expected to be approximately £124m (FY 22: £134.0m). As the Group has continued to generate stronger gross margins in FY 23 compared to the prior year, the impact of the revenue reduction is expected to be partially mitigated, and deliver Group EBITDA of approximately £16m (FY 22: £18.0m), maintaining Group EBITDA margins close to FY 22.

Our cash position remains robust, and the Group expects net cash as at 31 December 2023 to be no less than prior year net cash of £15.1m, after continued capital investment into Facilisgroup and the payment of a dividend of £1.0m in June 2023.

The Group remains strong financially, and both of our businesses are strategically well-placed within their respective markets.

Facilisgroup: providing a digital commerce platform for promotional products businesses in North America

At Facilisgroup, despite the difficult market conditions, FY 23 revenues are expected to increase by approximately 10% compared to prior year of USD20.4m (GBP16.6m).

We expect the Gross Merchandise Value ("GMV") transacted through our technology by Partners (customers) to be approximately $1.4bn in FY 23, slightly ahead of FY 22. This reflects a more challenging economic environment in the second half of the year and consequently the proportion of our income, based on in-year Partner activity, has impacted our overall rate of growth in FY 23.

Facilisgroup EBITDA margins are expected to be approximately 50% (FY 22: 54.2%) as we continue to invest in our technology, sales and marketing strategies.

Partner (customer) retention rates continue to be market leading and consistent with prior year rates of 96%. The total number of Partners at 21 November 2023 is 242 (31 December 2022: 225), with an enlarged team supporting the new business pipeline.

We anticipate that Facilisgroup, with its strong market position, growth opportunities and excellent profit margins, will become the majority contributor to Group profits moving through 2024.

Brand Addition: providing promotional products and related services under contract to many of the world's most recognisable brands

We expect Brand Addition revenues for FY 23 to be approximately £106m (FY 22: £117.4m).

This reduction in revenues against FY 22 has been driven principally from our Technology and Consumer clients, whilst revenue from our Engineering and Transport sector clients has been more robust.

With gross margins increasing in FY 23 compared to the 30.7% achieved in FY 22, the impact of the revenue reduction is expected to be partially mitigated with the Brand Addition EBITDA margin expected to be approximately 9% (FY22: 9.8%).

Our clients are strong, global brands and retention rates continue to be high. At this point, we anticipate recovery in their spend with us during 2024.

Group outlook

Against the difficult economic backdrop, we are disappointed to report a reduction in our Group's expected FY 23 results, due to lower order intake at Brand Addition. Both of our businesses remain strong financially, are well differentiated within their respective markets and have a clear strategic plan. Our balance sheet is robust and we look forward to returning the Group to growth in 2024.

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About The Pebble Group 

The Pebble Group is a provider of digital commerce, products and related services to the global promotional products industry, comprising two differentiated businesses, Facilisgroup and Brand Addition, focused on specific areas of the promotional products market. For further information, please visit www.thepebblegroup.com.