Made.com H1 losses widen amid lower demand
Meanwhile, revenues grew 4% year-on-year from £171m to £178m as deferred revenue normalised through the period
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Made.com has revealed its loss before tax has dropped by 25.2% to £35.3m for the six months to 30 June 2022 (H1 FY22), down from a loss of £10.1m in the same period last year.
Adjusted EBITDA also declined by 32.6% year-on-year from £1.1m to a loss of £31.5m amid lower consumer demand. This resulted in costs relating to handling and clearing excess stock levels, and freight cost inflation, impacting £17m period-on-period.
Softening consumer confidence has also caused a 19% decline in Gross Order Values (GOV) period-on-period.
Meanwhile, revenues grew 4% year-on-year from £171m to £178m as deferred revenue normalised through the period.
The group said it has taken action to clear excess stock through targeted discounting, reducing gross margin by 810bps. Overall, stock levels have reduced from £63m, as at 31 December 2021, to £44m at the end of H1 FY22.
The announcement comes as Made.com revealed last week (23 September) that it has initiated a strategic review and formal sale process of the business to maximise value for shareholders and strengthen its balance sheet. This includes a strategic headcount review to reduce annualised headcount related costs by £6m.
Nicola Thompson, chief executive, said: “The first half of the year was a challenging time for the global economy and particularly for the retail sector. The group has faced a significant reduction in demand which has been difficult for the business and its stakeholders.
“Although we took immediate action to adjust inventory levels and control costs and have launched a transformation plan that will make the business more agile and resilient, we believe that the decision we have taken to launch the strategic review and formal sale process, is the best route to protect shareholder value.”
She added: “Made is not alone in being hit by supply chain problems and the cost of living squeeze, but we are confident that Made has a strong brand, an excellent product range and a large and loyal customer base across the UK and Europe.”
