Kitchenware firm slumps to loss as consumer spending dries up
The founder of kitchenware firm ProCook says the economic conditions are the toughest he has ever seen as the company reported losses of £200,000.
Daniel O’Neill, the chief executive of the Gloucestershire business, said the squeeze on disposable incomes across the UK has hit the business.
Total revenue declined by just under ten per cent to £62.3m or five per cent excluding the Amazon channels which the company exited over the last two years.
Like for like revenue declined by 10.7 per cent against outperformance in the prior year and remained 112.2 per cent above pre pandemic levels.
The company broadly held its UK kitchenware market share in a year of significant trading uncertainty, despite a significant shift away from online sales.
Gross profit margins were hit by higher supply chain costs and foreign exchange impacts, partly offset by pricing; supply chain costs now largely unwound, with marine freight costs stabilising back to pre-pandemic levels.
As a result there was an underlying loss before tax of £200,000 compared with a profit of £9.5m the previous year.
This year the company completed the opening of its new distribution centre and HQ in Gloucester which provides a significant increase in capacity and potential for operational efficiency benefits.
Trading conditions during the first quarter of the financial year have remained challenging, with the continued impact of inflation and further interest rate increases.
Revenue of £10.7m was 6.7 per cent lower year on year with like for like revenue down 7.9 per cent year on year impacted by the warm weather and soft homewares market during May and June.
The company said the outlook remains challenging and much is uncertain. While there are indications that inflationary pressures will ease over the months ahead, UK consumers have suffered a significant adverse impact on disposable incomes and discretionary spending power.
Daniel O’Neill said: “In the 27 years since we first founded ProCook our focus on product quality, value and service have served as the key pillars of our customer offer, and I am pleased that this year we have again increased our active customer base, added three more retail stores and upsized two more, and retained our excellent-rated Trustpilot score.
“Our value for money offer has enabled us to retain a resilient trading performance despite the many headwinds.
“This year the economic backdrop has been one of the toughest I have experienced in my career. Our customers and colleagues have felt the squeeze on disposable incomes as inflation has soared upwards. We have faced challenging trading conditions before, and emerged stronger, more nimble, and more determined to press ahead with our mission to become the customers’ first choice for kitchenware.
“I am pleased with the strong strategic progress we have made this year, despite the challenging economic backdrop. In opening our new distribution centre, simplifying our operations to focus on the UK, improving our in-store and online experience, and becoming a B Corp, while also extending and improving our product ranges, we have made significant steps forward. We have continued to invest in the areas that will support our long-term growth and performance, while taking difficult decisions to manage costs and preserve cash.
“We know that our proposition continues to resonate very well with customers, and with our progress this year, we have built a better business, paving the way for improved performance and future profitable growth in the years ahead.”
