- Prachi Singh |
Shop Direct, operator of multi-category stores Very.co.uk, Littlewoods.com, VeryExclusive.co.uk and LittlewoodsIreland.ie, in its full-year results statement for the 52 weeks ended June 30, 2018 said that the group revenue grew 1.5 percent to 1,958.8 million pounds (2,578 million dollars) in a challenging external environment. The company added EBITDA increased 11 percent to 262.3 million pounds (345 million dollars), highlighting the strength of operational performance in the face of strong sector headwinds. Very customers increased 8.5 percent to 2.82 million, boosting total group customers by 2.2 percent to 4.02 million.
Commenting on the trading update, Henry Birch, Group Chief Executive at Shop Direct, said in a statement: “Four months into my role as CEO, I’m hugely excited by the potential of Shop Direct. Impressive growth in Very, and increases in group revenue and EBITDA show the resilience of our business, which is mobile-first, multi-category, and both a retailer and a credit provider. We’re trading in line with our expectations and preparing for the important peak season.”
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Financial highlights of Shop Direct’s full year results
Very, the company said, continued to outperform the online non-food retail market with revenue up 9.9 percent to 1,389.1 million pounds (1,827.5 million dollars) driven by strong customer recruitment, increased app penetration, and good growth in electrical and seasonal categories. Littlewoods’ revenue was down 14.5 percent to 569.7 million pounds (749.5 million dollars) driven by the annualisation of the closure of the commission scheme in the prior year, plus a challenged furniture & homeware performance.
Group gross margin declined 0.9 ppts to 39.9 percent, while operating profit before exceptional items grew 9.5 percent to 224.6 million pounds (295.6 million dollars). Statutory loss before tax was 24.7 million pounds.
Operational highlights of Shop Direct’s full year
Orders from the company’s Very smartphone app increased 39.5 percent year-on-year to represent 25.4 percent of total orders across all devices. Sales via mobile devices increased 5ppts year-on-year to 74 percent of total online sales. Visits to the Very website grew 11.6 percent to 374.4 million, helping to increase total visits to the group’s websites by 5.8 percent to 520.8 million.
During the year, the company strengthened the executive team with the arrivals of Henry Birch as Group CEO and Derek Harding as Group Finance Director, and the promotion of Sam Perkins to the Group Executive Board.
The company further said that the construction of its new 850,000 sq. ft., distribution and returns centre at the East Midlands Gateway development has begun. Operational by 2021, the site will let the company increase its cut-off time for next day delivery to midnight from 7pm, and explore same day delivery in the future.