The Very Group back in the black as revenue tops £2bn
Online shopping giant The Very Group has returned to profit as sales topped £2bn for the first time in the year ending 30 June 2020.
Group revenue was up 2.9% to £2.051bn driven by a strong performance at its flagship site Very.co.uk which increased sales by 10.5% to £1.23bn.
Group profit before tax hit £48m and underlying EBITDA was £264m, but each of those figures exclude costs relating to COVID-19. However the group ended the year with a cash balance of £200m and reduced net debt by £144m.
CEO Henry Birch said he was "delighted" to announce the results adding that they were a result of "the combination of the commitment of our people and our flexible and resilient business model".
Henry Birch
"Despite the unprecedented challenges of the pandemic, the business has proven its adaptability yet again. We delivered for record levels of new customers, who used the Very app for items to entertain their families and improve their homes, and increasingly valued our flexible ways to spread the cost.
“We prioritised the safety of our colleagues, whilst remaining focused on customer experience. We migrated to, tested and launched Skygate, our new automated fulfilment centre, which enables us to process customer orders within 30 minutes, whilst materially reducing costs and is all set to support our Q2 peak trading period.
“The economic landscape will remain unpredictable. However, we believe our flexible and resilient business model, which gives customers access to the brands they love via flexible ways to pay, will help us thrive as customers continue to rely on online shopping. Our purpose, ‘to make good things easily accessible to more people’, has never been more relevant," Birch said.
Very.co.uk grew it customer base by 14.1% to 3.4m while the group, which also includes Littlewoods.com, grew its customer base by 10.6% to 4.48m. Very.co.uk customers were said to have increasingly turned to its app with orders via the channel up 34.4% year-on-year to represent 35.7% of total Very orders. Sales via mobile now account for 82% of its sales.
The "managed decline" of the Littlewoods brand slowed during the year with sales down -8.8% to £460.9m (in the prior year sales had dropped by 11.3% to £505.3m).
Underlying Group EBITDA was slightly lower dropping 2.9% to £264.4m (FY19: £272.4m), which was in line with guidance, with volume growth and cost efficiency largely mitigating £12.4m of COVID-19 impacts on EBITDA, the company said.
Fashion and sports sales were up 0.9% with particularly strong growth in women’s and children’s sports clothing (+21.6% and +22.6% respectively). New brands added in fashion included Topshop and Mint Velvet, while it grew its relationship with existing brands such as Tommy Hilfiger, Barbour and Hugo Boss. In addition it onboarded 50 new beauty brands including Elemis, Cowshed, Iconic London, Delilah, Nip + Fab and Ren.
The new Nike size tool
Other innovations throughout the year include the development of a new tool with Nike that helps customers find the right size and fit by viewing product lines on their choice of model, continued investment in an AI-powered chatbot, the migration of all necessary stock to the nw Skygate fulfilment centre and the introduction of soft credit searches.
In light of the pandemic, The Very Group said it was accelerating its digital development by three years bringing forward investment in systems and ways of working which will structurally improve its backend infrastructure. Office-based staff, who had switched to home working during the pandemic, will switch to flexible working on a permanent basis.
