Shares in Inspecs, the Bath-based spectacles designer and manufacturer, lost more than half their value in one day after it warned that sales would continue to be hit by the cost of living crisis into next year.
The departure of Inspecs chairman, the former Tesco boss and City grandee Lord MacLaurin, on 1 December also appeared to rattle investors, with shares in the group collapsing from 111.7p to 52.5p yesterday.
The shares were this morning trading at around 50p – a far cry from their high of just under 395p achieved in January.
The firm, which was launched by former bond trader Robin Totterman in 1988, floated on the London Stock Exchange’s AIM market in February 2020, with its shares debuting at 193p.
Based in Bath’s old Gas Light and Coke building on Upper Bristol Road, it produces a wide range of spectacle frames and lenses, including sunglasses and safety glasses.
Customers include global optical and non-optical retailers, global distributors and independent opticians, with its distribution network covering more than 80 countries and reaching around 70,000 outlets.
It has offices in the UK, Portugal, Scandinavia, the US and China, including Hong Kong, Macau and Shenzhen, and factories in Vietnam, China, the UK and Italy.
In yesterday’s trading update for the nine months to 30 September 2022, Inspecs, which has grown rapidly in recent years following a spate of acquisitions, said it was clear that it was not “immune to the macro environment or the downturn in consumer confidence, particularly in Europe”.
It added that this was expected to impact the remainder of this year and into the first half of 2023.
It said in Europe, and particular in Germany – one of its biggest markets – both the macro-economic climate and consumer confidence had deteriorated sharply in just one month.
German consumer confidence was now at a 25-year low, which was reflected in its order intake, which was 13% down on the previous year.
It added that it expected the German and French markets to remain weak into the first half of next year.
In the US, the order book remained at a similar level to the previous year, it said, while in the UK its frame business had grown
However, its Vietnamese and Chinese manufacturing business had been affected by the European slowdown and its order book had decreased.
Due to this, it is delaying the expansion of the existing Vietnamese factory and the investment in a new factory in Portugal until at least the third quarter of next year.
This followed delays to new state-of-the-art lens-making facility in Gloucester for Norville, the historic UK spectacle lens maker it bought in 2020.
However, it said the investment was still expected to deliver a return in 2023. The factory was working with the group’s ‘skunk works’ innovation team to continue developing ground-breaking lens technology for smart eyewear, along with other revolutionary lens-related projects, it said.
Inspecs said it had also been impacted by “unfavourable” foreign exchange movements, particularly with the Euro weakening against the US dollar.
As a result of Lord MacLaurin’s departure, Mr Totterman will move from CEO to an executive chair role from 1 December.
At the same time non-executive director Richard Peck, who was previously MD of Luxottica Retail northern Europe and MD of David Clulow, will become CEO.
