Resilience seems to be the keyword Very Group uses to describe its annual performance in an undeniably challenging market. But a fall in fixed income and pre-tax profits of around £50m (albeit still a positive £4.6m) does not tell the full story.
Fashion sales were down, but casual wear was strong, as was beauty.
The digital retailer, whose core brands include Very and Littlewoods, remained optimistic “driven by market-beating growth” for the 52 weeks ending July 1, it said in a statement on Thursday.
Very UK’s revenues rose 1.9% to £1.82bn, while group revenues remained flat overall at £2.15bn, with revenue growth exceeding 6% to £422m, helping to stop these figures from actually falling. It was the strong performance at Very Finance where it reached .
This large decline in pre-tax profit was mostly due to increased financing costs; and finance costs increased by an eye-popping 43.5% in FY23.
Group adjusted EBITDA remained “strong”, falling marginally to £276.5m from £291.4m a year ago, impacted by investment pricing and cost inflation, but driven by good cost management and strong Very Finance balanced by his contribution.
Another positive development was group adjusted free cash flow, up 9.6% to £128.4 million.
Very Group also stated that its overall performance remained ahead of the online non-food retail market, representing growth in market share over the same period.
In terms of performance, core areas such as fashion and sports saw an overall decline in the “promotional market” of 8.2% year-on-year. However, within the category, women’s casual was up 4.8%, while men’s casual was ahead by 1%, both “strong performers.”
In this market, which is becoming an increasingly important market, the Beauty sector grew by 13% on an annual basis and personal care increased by 25%, following the strategic price investment made in the category.
Very Group said investment in pricing and assortment of key categories, particularly during the peak, helped drive ahead-of-market growth in areas such as beauty “to secure market share and grow our borrower book supporting future revenue”.
And in a highly cost-conscious market, the group said it was also expanding its value-focused own brand range – Everyday – by adding 900 quality product lines covering women’s, men’s and children’s fashion, drawing attention to 85% of Everyday fashion. items are now available for £30 or less.
Customer experience, meanwhile, also improved, helping the group’s “best ever net promoter score” rise by 8.2 to 35.9.
The company also said it is continuing to invest in technology transformation, including migrating systems to a new e-commerce platform and launching AI-powered product discovery on Very’s website and app.
What does the future promise? Group CEO Lionel Desclée said: “Over the coming year, we will continue to deliver a combination of investment-led growth and thoughtful cost management, with a clear focus on improving our digital customer experience.
“While the market will remain challenging, we are confident that our proven and resilient business model, combining multi-category online retail with flexible payment methods, will continue to serve our customers.”
Analysts at GlobalData, meanwhile, were mostly bullish on the results and backed Very’s increased investment in AI, seeing it as an important tool “to drive growth” and noted that the business was faring “very well” in the challenging market.
The statement said: “Very’s investment in artificial intelligence is expected to increase group revenue in the coming years, as the improvements the company is making to its online platforms will support the online shopping journey. In fact, with the introduction of faster and more efficient search tools, consumers will be able to find products better.” online pureplay can increase conversion rate.Artificial intelligence will also help [it] “It will improve profit margins by streamlining its operations, which will lead to more accurate forecasts, faster responses to changes in demand and improvements in product availability.”
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