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Investing.com -- Inspecs Group PLC (LON:SPECI) stock fell 10.5% after the eyewear designer and manufacturer reported lower revenue and reduced profit margins in its first-half results.
The global eyewear business posted revenue of £97.6 million for the six months ended June 30, down from £100.6 million in the same period last year. On a constant currency basis, revenue decreased by 1.3% to £99.3 million.
Gross profit margin contracted by 80 basis points to 51.8%, while underlying EBITDA fell to £9.0 million from £11.0 million in the prior-year period. Diluted underlying earnings per share nearly halved to 2.08p from 3.94p a year earlier.
The company cited "widely reported macro-challenges, including ongoing tariff disruption and subdued consumer confidence" as factors affecting performance. Specifically, tariff disruption continued to impact manufacturing exports from China to the U.S., while reduced government expenditure on low vision products affected the company’s Optics division in the United States.
Despite these challenges, INSPECS managed to reduce operating expenses by 1.2% to £47.8 million and generated £11.2 million in cash from operations. The company also highlighted operational efficiencies, including a £1.1 million reduction in operating expenses within its Frames and Optics division.
Net debt excluding leases increased slightly to £23.6 million from £22.9 million at the end of December 2024, primarily due to final payments on deferred consideration related to acquisitions and funding of discontinued operations.
INSPECS reported that current trading in the first two months of the second half is slightly behind plan, but expressed confidence in meeting full-year guidance based on growing order books and increased cost savings.
The company maintains its medium-term targets of organic revenue growth 40% above the market rate and double-digit underlying EBITDA margins.