Online Retailer Expects Continued Growth in Second Half of FY25
- Very Group returns to profitability with £6.1m pre-tax profit despite a 4.5% revenue drop
- Revenue down to £1.17bn, Very UK brand at £1.02bn
- Electricals sales decline due to gaming product releases
- Fashion sales drop by 6%
- Adjusted EBITDA up 17.4% to £150m due to cost control
- Growth in home and sports categories
- Very Group cuts ties with HSBC, hands over loan portfolio to Natwest
The Very Group has reported a pre-tax profit of £6.1 million for the 26 weeks ended December 28, 2024, despite a 4.5% decrease in revenue to £1.17 billion. The company’s Very UK brand saw a 3% drop in sales to £1.02 billion. Electrical sales declined by 3.1%, mainly due to the impact of annualizing against a quarter with significant gaming product releases, while fashion sales fell by 6% due to a heavily discounted and contracting market. The decline in electrical sales, Very’s largest category, was attributed to this factor. Despite these challenges, the company achieved a 17.4% increase in adjusted EBITDA at £150 million thanks to diligent cost control. Additionally, growth in home and sports categories saw increases of 7.3% and 18.4%, respectively. The Very Group expects profitability to continue in the second half of FY25 as it focuses on higher margin sales and cost discipline. This comes after the company cut ties with HSBC, which managed its £1.8 billion customer loan portfolio for a decade, and handed over responsibility to Natwest for securitization of its buy now, pay later offer. Approximately 90% of Very’s sales are made through customer loans.
Factuality Level: 8
Factuality Justification: The article provides accurate information about The Very Group’s financial performance, including profitability, revenue, and specific categories. It also mentions the company’s focus on higher margin sales and cost discipline, as well as the change in banking partners. However, it contains some minor details that are tangential to the main topic, such as the reference to FY25.
Noise Level: 3
Noise Justification: The article provides relevant information about The Very Group’s financial performance and its focus on higher margin sales and cost discipline. However, it could benefit from more in-depth analysis of the factors contributing to the decline in electrical and fashion sales, as well as a clearer explanation of the impact of cutting ties with HSBC and partnering with Natwest.
Financial Relevance: Yes
Financial Markets Impacted: No
Financial Rating Justification: The article discusses The Very Group’s return to profitability, its revenue and sales decline, and its focus on higher margin sales and cost discipline. It also mentions the company cutting ties with HSBC and transferring responsibility of securitisation to Natwest for their buy now, pay later offer. These topics are related to financial performance and business operations.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.
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