Profits collapse at online retailer Very Group, due to increased finance costs
Profits have plummeted at Liverpool-based online retailer, Very Group.
A £4.6m pre-tax profit for the year to July 1, 2023, is in stark contrast to the £63.9 figure the prior year.
Very, which operates the Very and Littlewoods online retail businesses, said this was due to figures being impacted by the heightened cost of funding to the company. Finance costs increased 43.5% in fiscal year 2023.
Group revenue was broadly flat at £2.15bn.
Very Finance revenue achieved growth of 6.1% to £422.1m, compared with £397.9m in 2022, while group adjusted free cashflow increased 9.6% to £128.4m (FY22: £117.2m).
Customer experience improvements helped to deliver the group’s best ever net promoter score at 35.9 which was an 8.2 improvement.
Underlying bad debt continued to be below pre-pandemic levels and fell as a percentage of the group’s debtor book year-on-year due to continued prudence and high quality credit risk management, the group, based in Speke, South Liverpool, said.
It also hailed robust group adjusted EBITDA of £276.5m (FY22: £291.4m), which was impacted by pricing investment and cost inflation, and mitigated by good cost management and the strong Very Finance contribution.
Lionel Desclée
Group CEO, Lionel Desclée, said: “Despite challenging economic conditions, our adaptable business model has driven market-beating top line growth, improved cash flow year-on-year, and our best ever customer satisfaction score.
“It’s down to the investments we made in pricing and our digital customer experience, our cost discipline, and the commitment of our people in serving families in the UK and Ireland.”
He added: “In the year ahead, we will continue to deliver a combination of investment-led growth – with a clear focus on improving our digital customer experience – and diligent cost management. While the market will remain challenging, we’re confident our proven and resilient business model, which combines multicategory online retail with flexible ways to pay, will continue to deliver for our customers.”
During the reporting period the group saw 13% growth in toys, gifts, and beauty following strategic price investment in the category. This performance was driven by toys (+20.6%) and personal care (+25.0%).
Electrical, Very UK’s largest category by retail sales, was up 3.3%, underpinned by small domestic appliances such as air fryers (+52.4%), and mobiles, tablets and wearable tech (+seven per cent).
Fashion and sports declined 8.2% year-on-year in a promotional market while annualising against a step up driven by the UK’s response to the Omicron COVID-19 variant in FY22. Within the category, casual womenswear (+4.8%) and casual menswear (+one per cent) performed strongly.
Home was down 1.4% year-on-year. Within the category, strong performance in textiles (+5.3%) and upholstery (+9.6%) was offset by declines in home accessories (-six per cent%) and garden (-12.7%).
The group expanded its own brand range, Everyday, adding 900 lines. Spanning women’s, men’s, and kids’ fashion, as well as homeware.
