MADE Delivers Record Results With 61% Revenue Growth

Made.com Group Plc has published interim results for the six months to 30 June 2021, advising of record results with 61% revenue growth.

Financial Highlights

• Strong trading performance delivering £214m gross sales for the first half of 2021, 54% year-on-year growth
  
  
• Customer metrics underpin gross sales growth, with last twelve month active customers(1) at 1.2m, +34% over the six-month period, with average order value (AOV)(1) at £244, +12% year-on-year
  
  
• Revenue of £171m, +61% year-on-year, with Q2 revenue of £89m, +84% year-on-year
  
  
• Deferred revenue closed the period +81% year-on-year at £67m, remaining at elevated levels due to extended lead-times
  
  
• Gross margin was 48.7%, down 306bps year-on-year due to global freight inflationary pressures and foreign exchange headwind. Gross margin excluding freight costs and foreign exchange differences improved on better full price sales mix and economies of scale
  
  
• Adjusted EBITDA of £1.1m, +£12.2m year-on-year, with cost leverage across all operating cost lines, more than offsetting industry wide global freight inflationary pressures
  
  
• Reported losses before tax were (£10.1m) including one-off IPO related P&L charges of £5.4m, compared to (£15.2m) for the same period in 2020
  
  
• Net cash was £175m at the end of the period, following the IPO raise of £100m of gross proceeds. Free cash flow(1) of £30m, compared to £25m in the first half of 2020 

Philippe Chainieux, CEO of MADE, commented:

"I am very pleased with the progress made in the first half of the year, which is in line with the long-term goals set out at our IPO in June. We have continued to see strong and sustained consumer demand for our exclusive, design-led products and have gained significant market share with growth in all eight of our markets.

"Thanks to our agile business model and supplier relationships, we are well-positioned to navigate the industry-wide global supply chain disruption, which is expected to continue into the first half of next year. We have multiple levers to drive superior growth and will continue to strengthen our model through the ongoing implementation of our strategy: to invest in our unique customer proposition through further developing our curated, design-led range, enhancing customer experience, investing in our brand and expanding internationally. I am confident in the outlook for the Full Year and in MADE's long-term growth."

Strategic and operational highlights

• Significant strategic progress in strengthening our position as the leading digitally native lifestyle brand in home, delivering market share gains
  
  + Further growth of our design led range, with accelerated new product releases, increasing our range to more than 8,000 SKUs at the end of the first half.
  
  + Making encouraging progress on our ongoing beta testing of curated marketplace.  This further  enhances our homeware range, offering third-party artisan brands
  
  + Exceptional growth delivered across all geographies, gaining market share in all regions.  UK delivered gross sales growth of 55% compared to H1 2020.  Continental European markets are already at scale and grew gross sales by 53% compared to H1 2020, with Germany continuing to outperform the Continental European average

• Significant warehousing and logistics capacity secured at our existing sites to support high growth and lead-time service improvements
  
  + Nearly doubling our UK large goods warehouse, with the delivery of an additional 172,000 sqft of space delivered early August 2021. Letter of intent signed to extend warehousing space at our existing site in Antwerp, servicing our European customers
  
  + Continuing to deliver cost leverage with scale and careful cost management through all cost lines
  
  + Distribution cost efficiency supported by average order value (AOV) growth and negotiated cost improvements
  
  + Marketing costs remain below pre-pandemic levels, supported by range development, customer targeting efficiency and increased repeat order mix
  
  + Overhead leverage continues as we scale, with overheads at 10.4% of revenue for the period compared to 13.3% prior year
  
  + As part of the group's ESG strategy, we launched our circularity initiative with Geev, a third party platform to allow customers to give a second life to their products in the UK and France

Outlook

• Following a successful first half, visitor volumes remain robust, giving us confidence in maintaining full year expectation for +40% year-on-year gross sales growth
  
  
• Full year revenue expected to be ~£410m (~+65% year on year) with positive adjusted EBITDA, assuming global supply chain disruptions do not deteriorate further. Our planning assumes industry wide global supply chain disruptions continue to result in extended shipping times, range availability pressures and increased freight costs. Later than anticipated intake of goods to our warehouses, could impact revenue recognition timing and inflate deferred income.
  
  
• MADE is well positioned to manage this level of volatility.  We are an agile and fast paced business and we can react to changes quickly. We have deep direct relationships with key partners and we have a good level of supplier diversification.
  
  
• Directly controlled operating cost leverage achieved and expected to continue for second half 2021 and beyond
  
  
• Ambition of £1.2Bn+ gross sales and low teens adjusted EBITDA margin by 2025 reconfirmed, as the large and underpenetrated furniture and homeware market shifts online and we accelerate investment into our core customer proposition development - range expansion, industry leading lead-times and international expansion

Source : MADE.com

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