Speedy payments fuel explosive growth for Entertainment Magpie
Re-commerce company Entertainment Magpie, which trades refurbished CDs, DVDs, games, books and technology products such as mobile phones and tablets, has hailed a “transformational” period since a capital investment 18 months ago.
Newly filed accounts show turnover hit £61.1m for the year to the end of May 2016 (six months to May 2015: £32.1m), with EBITDA profitability of £2.85m (six months 2015: £807,000) and an overall pre-tax profit of £676,000 (six months 2015: £319,000 loss).
The Stockport group saw a change in ownership structure during the period, when LDC exited the business in September 2015 and NVM Private Equity made a £6m investment as part of a secondary management buyout.
Accounts for the holding company reveal that NVM’s investment comprised £700,000 for a 36.7% stake, plus £1.1m preference shares and a £4.2m loan note.
In the directors’ report chief executive Steve Oliver called the investment “transformational” in funding the company’s ‘faster payment’ strategy, where customers are paid on the day of receipt of items to the warehouse.
This, he said, has led to an “explosive growth” in the trading of pre-owned consumer electronics and a substantial improvement in reputation with its Trust Pilot score consistently rated as ‘excellent’.
Co-founded by Oliver and Walter Gleeson in 2007, the company is now the world’s biggest online seller of pre-owned media and recently passed a positive feedback score of five million on eBay – the first eBay business in the world to do so.
Oliver added: “The group is very focused on replicating its market leading position on pre-owned media to become the UK’s largest consumer electronics recycler and is well on course to achieve that position within the next financial period and has already become the largest seller of pre-owned mobile phones on eBay UK.
“We have seen significant growth from the launch of our own sales channel, musicMagpie Store, which from a standing start 12 months ago, has now reached an annual sales run rate of £20m.”
Entertainment Magpie has grown to employ more than 800 staff, built up a customer base of more than three million people, won a host of awards and also launched in the US, although it trades there as decluttr.com.
Oliver told TheBusinessDesk that turnover for US business Entertainment Magpie Inc brought the total group turnover for the year to £74.1m in the period to the end of May 2016.
He said: “After the initial set up and trading losses experienced by the US business in its earlier years, EMI (Entertainment Magpie Inc) now contributes to the overall profitability of the business, with indeed a more than doubling of monthly year on year trading volumes having occurred post year end, and the directors see further very dramatic growth potential in the US for the future.
“The US combined with our growth in tech and the musicMagpie store leaves us well placed to break the £100m turnover mark this year.”
