Shares of Inspecs Group PLC (LSE:SPEC) fell 10.5% following the release of its first-half results, which showed weaker revenue and shrinking profit margins.
The global eyewear company reported revenue of £97.6 million for the six months ending June 30, down from £100.6 million in the same period last year. On a constant currency basis, revenue dropped by 1.3% to £99.3 million.
Gross profit margin decreased 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, coming in at 2.08p compared with 3.94p a year earlier.
The company attributed the results to “widely reported macro-challenges, including ongoing tariff disruption and subdued consumer confidence.” Specifically, manufacturing exports from China to the U.S. continued to face tariff disruption, while reduced government spending on low vision products impacted the U.S. Optics division.
Despite the headwinds, INSPECS managed to lower 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 costs within its Frames and Optics division.
Net debt, excluding leases, edged up slightly to £23.6 million from £22.9 million at the end of December 2024, mainly due to final payments on deferred consideration from acquisitions and funding for discontinued operations.
INSPECS said trading in the first two months of the second half is slightly behind plan, but expressed confidence in achieving its full-year guidance, citing a growing order book and rising cost efficiencies.
The company continues to target medium-term objectives of organic revenue growth 40% above the market rate and double-digit underlying EBITDA margins.
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