Pandemic hits Brand Architekts' sales, dents growth plans
Brand Architekts is on a transformational journey to grow into a £50m revenue business within the next five years. So how’s its 'Project 50' progressing?
Not off to a good start, considering the pandemic hitting high street beauty sales. That pushed sales down 10% in the six months to 31 December to £9 million, the personal care brands developer and supplier reported Tuesday. Underlying profit also dipped to £0.8 million from £1.2 million a year ago.
But it wasn’t all downbeat news.There was also growth to report in business to UK grocers and, of course, online sales benefitted from the lockdowns, with a 125% improvement in e-tail and direct-to-consumer sales, although no monetary figures were given.
Meanwhile, pre-tax profit inched up to £0.4 million from £0.3 million a year ago, underlying gross profit margin also improved to 39% from 38% and net cash at period-end was also up £1 million to £19 million.
“The pandemic impacted footfall and consumer behaviour, resulting in a decline in beauty sales within the UK high-street [and] international markets and led to retailer caution with regards to 2020 Xmas gift sets volumes”, the company said, explaining its overall sales dip.
However, it also said a detailed review of operations resulted in an improved net cash position, increased net profitability and an overhaul of its brand portfolio. Expect to see its Project 50 strategy start to deliver return on investment from next financial year, it added.
Chief executive Quentin Higham said: "Since joining in May, we have taken time to get under the skin of the business and have started to build the foundations to deliver sustainable and profitable growth over the coming years.
“Despite the ongoing challenges caused by the pandemic, we have made good progress against our strategic priorities, as we work towards our Project 50 goal. As we move into the second half, we will maintain our focus on our four key pillars, in particular the investments we are making into our direct-to-consumer channel and Super Facialist marketing campaign".
He added: “While the current operating environment remains uncertain, we are confident we are building the right platform to achieve our long-term goals”.
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