Facilisgroup is growing, but the same can’t be said for its parent firm.

Facilisgroup, a partnering community and software-as-a-service company for the promotional products industry, is on track to increase annual revenue by about 10% year over year in 2023, according to a financial update.

The anticipated tally, if achieved, would put the Missouri-headquartered company’s 2023 revenue in an approximate range of $22.45 million, as calculated off last year’s total of $20.4 million.

Still, Facilisgroup’s U.K-headquartered publicly traded parent firm, The Pebble Group, reported that its total annual revenue for the year is likely to decline by about 7.5% in 2023 to £124 million.

That’s a result of The Pebble Group’s other flagship company – global promo products distributor Brand Addition (asi/202515) – experiencing an anticipated year-over-year £11.4 million decline in sales.

Since The Pebble Group is headquartered in the United Kingdom and publicly traded there, it reports financial performance in British Pounds Sterling. Brand Addition’s expected 2023 revenue is £106 million, or in the neighborhood of $135 million in today’s U.S. dollars.

The performance comes in below earlier anticipations for annual growth and represents total global sales – those made in North America, Europe and beyond. Brand Addition didn’t break down sales by continent in the trading update, but the U.K.-headquartered distributorship’s international business has traditionally been larger than its North American sales.

“Against the difficult economic backdrop, we are disappointed to report a reduction in our group’s expected [Full-Year 2023] results, due to lower order intake at Brand Addition,” The Pebble Group said in a trading update.

Still, the firm added, “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.”

Facilisgroup Grows

In addition to expanding revenue, Facilisgroup this year has increased gross merchandise value (GMV) – essentially the sum of business transacted by customers through its technology. Facilisgroup GMV in 2023 will likely be about $1.4 billion, according to The Pebble Group.

While GMV was ahead of 2022, its potential greater growth was inhibited by what Facilisgroup described as a “more challenging economic environment” in the second half of the year for distributor customers who use its technology.

In the third quarter of 2023, promo distributors in North America collectively grew sales, on average, by 2.4% – the slowest growth rate of any quarter amid the ongoing recovery from COVID-era quarterly declines, ASI Research shows. Facilisgroup’s customers are in the U.S. and Canada.

While #promoproducts industry growth slowed in Q3, especially for the largest distributors, there were positives to report – including a healthy level-headed optimism about Q4. Stats, graphics, and lots of insights from distributors.https://t.co/omwsy8HS3Q

— Chris Ruvo (@ChrisR_ASI) November 1, 2023

Meanwhile, Facilisgroup reported that customer retention remained high at 96%. The firm’s total number of partners/customers increased from 225 at the end of 2022 to 242 toward the end of November 2023.

Ashely McCune, formerly a member of Counselor’s Power 50 list of promo’s most influential people, left her position as president of Facilisgroup in October. Current Power 50 lister Chris Lee, CEO of The Pebble Group, became acting president, a role he continues to fill. 

Reduced Tech-Client Spend Hurt Brand Addition

According to The Pebble Group, Brand Addition’s revenue declined due to a drop in business with technology and consumer clients. “Revenue from our engineering and transport sector clients has been more robust,” Brand Addition said.

On the bright side, Brand Addition’s gross margins increased. That could help lessen the impact of the revenue decline on the distributorship’s earnings before interest, taxes, depreciation and amortization; EBITDA margins should be about 9%, roughly equivalent to the prior year, the firm said.

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