Very Group celebrates record revenue as it eyes listing
Online retailer Very Group has announced record revenue in its full year results, ahead of an anticipated £4bn float.
The owner of fashion brands Very.co.uk and Littlewoods.com said group revenue had swelled 13 per cent to a record £2,317.1m.
Group revenue was driven by Very retail sales, which rose by almost a quarter to £1,535.6m.
Very also hit a total of 3.82m customers in the year ended July 3 2021, boosting the group’s total customers to 4.82m.
It is good news for the retailer as last month the Merseyside-based firm hired a trio of banks to organise an initial public offering (IPO)
Investment banks Barclays, Morgan Stanley and UBS were appointed to coordinate the float for next year, Sky News reported.
Group profit before tax reached £81.7m, up 68.8 per cent compared to 2020, including exceptional items of £41.3m.
Underlying group EBITDA saw a 13.7 per cent hike to £300.5m, a reflection of bolstered Very retail sales and improved cost management.
The brand has honed in on a need for speedy deliveries and extended its order cut off for next day delivery from 7pm to 10pm.
Sales via apps also rose 45 per cent compared to the previous year, after platforms were made more “personalised” and “intuitive.”
However, the Very Pay platform revenue dropped 8.6 per cent to £359.6m, down to higher levels of customer payments.
“If you wanted a set of figures to whet the appetite of potential investors The Very Group couldn’t do much better than its latest results,” Danni Hewson, AJ Bell financial analyst, said.
“Value with simple payment solutions will appeal to budget conscious shoppers and investments made to amp up automation in its fulfilment centre will help it navigate labour shortages,” Hewson added.
“It’s anticipating further growth which is why an injection of cash could help take it to the next level, but retail is a competitive beast and consumers are demanding more than ever from their shopping experience whether that’s online or instore and if the business does follow through on tentative plans to float next year investors will pull apart growth plans, ensuring this bump isn’t just a COVID coincidence.”
Henry Birch, CEO at The Very Group was pleased to report the record revenue, alongside continued profit growth and strong cashflow generation.
He added: “Whether working remotely, educating and entertaining the kids, updating their homes or simply wanting to look and feel good, we’ve given millions of families the items they need via an extensive range of flexible payment products.
“We are in good shape to face any future uncertainty, and remain confident that we are well positioned to take advantage of a market and customer behaviour that is moving towards our model.”
Harry Barnick, senior analyst at Third Bridge, said the outlook for 2021 and 2022 was “much more challenging.”
“Very Group will have to grapple with tough comparables, fierce competition and a disrupted supply chain.
“There are also significant regulatory headwinds for its financial services division. Affordability checks will be thrust front and centre as the financial ombudsman looks into historic credit limit increases.”