Record Revenue And Continued Profit Growth At The Very Group

The Very Group (the “Group”), which operates online retail brands Very.co.uk, Littlewoods.com and LittlewoodsIreland.ie, today announces its full year results for the year ended 3 July 20211.

• Very retail sales up 24.9% to £1,535.6m, driving 13% Group revenue growth to a record £2,317.1m
• Very customers increased 12.4% to 3.82m, boosting Group customers by 7.6% to 4.82m
• Group profit before tax of £81.7m, up 68.8% on the prior year, reflecting increased Very retail sales and improved cost management
• The Group finished the year in strong financial health, with underlying operating cash flow of £245m
• Significant customer experience improvements including:
  • Our AI-powered chatbot, Very Assistant, now handles 268,000 queries monthly after being added to the Very website, making it our largest customer service channel
  • Extending order cut off for next day delivery from 7pm to the industry-leading time of 10pm
  • App sales up 45% year-on-year boosted by a more personalised, intuitive app experience
• Improved colleague experience with launch of hybrid working model and transformed office spaces to promote collaboration and community
• Strengthened our executive team with the appointment of former BBC technology director Matt Grest as chief information officer and Robbie Feather, former CEO of Fenwick, set to join the business as retail managing director in late 2021

Henry Birch, CEO at The Very Group, commented:

“I am pleased to report outstanding Group performance, including record revenue, continued profit growth and strong cashflow generation.

“Whether working remotely, educating and entertaining the kids, updating their homes or simply wanting to look and feel good, we’ve given millions of families the items they need via an extensive range of flexible payment products. 

“We’ve done this while moving our company forward operationally and strategically, from continuous digital customer experience improvements and developing our Very Pay platform to extending next day delivery cut off thanks to our highly automated fulfilment centre.

“I am most proud, however, of our colleagues. Through their dedication, adaptability and ingenuity, they consistently delivered for our customers while adjusting to new ways of working, with many facing personal tests.

“The current environment is not without challenge, but our pandemic experience has shown us that our multi-category offer, combining leading brands with our Very Pay platform, is relevant to an increasingly wide number of customers. We are in good shape to face any future uncertainty, and remain confident that we are well positioned to take advantage of a market and customer behaviour that is moving towards our model.” 

Financial highlights

• Very revenue up 18.2%2 to £1,878.4m (FY20: £1,589.8m) and Group revenue up 13.0%3 to a record £2,317.1m (FY20: £2,050.7m), driven by an increase in Very retail sales of 24.9% to £1,535.6m (FY20: £1,229.6m)
• Very customers increased 12.4% to 3.82m (FY20: 3.40m), boosting Group customers by 7.6% to 4.82m (FY20: 4.48m)
• Group profit before tax of £81.7m, up 68.8% year-on-year (FY20: £48.4m), including exceptional items of £41.3m (FY20: £42.6M)
• Underlying Group EBITDA increased 13.7% to £300.5m (FY20: £264.4m), reflecting increased Very retail sales and improved cost management
• Group gross margin maintained at 36.5% (FY20: 36.5%), with improvements in retail margin offset by a drop in Very Pay platform contribution
• Underlying bad debt expense 1.5%pts lower at 6.1% of the average debtor book
• Closing cash balance of £78.1m (FY20: £206.4m), reflecting the £119.4m final settlement of customer redress payments, with no further material increase in provisions expected
• Very’s average debtor book grew by 3.3% to £1,251.2m (FY20 £1,211.1m)
• Very Pay platform revenue decreased -8.6% to £359.6m (FY20: £393.3m) owing to higher levels of customer payments, reflecting enhanced credit decisioning and improved quality of underlying debtor book
• Launched soft search across our websites to allow customers to check their eligibility for our Very Pay platform before applying
• Strong performance from Littlewoods Ireland, with retail sales up 21.7% to £101.5m (FY20: £83.4m) 

Operational highlights

Sales growth across all Very categories, demonstrating strength of multi-category strategy

• Electrical (+38.9%), driven by flagship releases in gaming (+65.5%) and double-digit growth in all sub-categories
• Home (+26.7%), including home accessories (+27.9%), textiles (+27.0%) and furniture (+33.1%), driven by beds (+43.9%)
• Fashion and sport (+11.6%), with particular growth in:
  • Children’s, women’s and men’s sportswear (+67.7%, +50.1% and +24.3% respectively)
  • Celebrity and designer clothing (+69.5%), including Michelle Keegan (+25%)
• Developing categories (+6.9%), encompassing toys, camping and sports equipment and more, boosted by:
  • Beauty, fragrance and personal care (+14.8%), with more than 70 new beauty brands onboarded including Benefit, L’Occitane and Dyson Supersonic Hair Dryer
• Net increase of circa 100 brands across all categories, including New Look, Never Fully Dressed, Citizens of Humanity, Free People, Cox & Cox and Koble
• Launched a new stockless fulfilment model with adidas and Reebok, doubling the product lines available from these brands by shipping direct to customers as well as from our fulfilment centre

Customer service innovation

• Our artificial intelligence-powered chatbot, Very Assistant, previously only available via our app, was added to the Very website and became our largest customer service channel, answering 268,000 queries a month and resolving 75% of queries on first contact
• The chatbot’s success, combined with our focus on increasing online tools for customers to self-serve, saw inbound customer service contact reduce by almost a quarter year-on-year (23%)
• Very’s Trustpilot rating improved to ‘great’, with 75% of reviews in the 12 months to mid-August 2021 rating their experience as ‘excellent’ or ‘great’

Fulfilment milestones

• Migrated clothing and footwear returns to Skygate, our highly automated fulfilment centre in the East Midlands, making refunds faster and returned product available for re-sale within 30 minutes
• Extended the next day delivery cut off for customer orders from 7pm to 10pm
• Skygate has processed circa 40.5m individual items via circa 17.5m customer orders since its launch in March 2020
  • The fastest order to date was processed and despatched within 17 minutes
  • The record for the most individual items packed within in a single minute stands at 228

Implementing new ways of working

• Created and launched a hybrid way of working that is flexible around the needs of our customers, our business and our people
• More than £2m invested in creating the right processes, technology and support to enable our people to be highly collaborative in the office and focussed at home
• Transformed our offices with culture, community and collaboration in mind, adding open plan zones defined by distinctive décor, group break out spaces, hot desks, accessible kitchens and inclusive facilities

Tech and data investment

• Very’s app sales increased 45% year on year and visits were up 77%, boosted by numerous customer experience improvements
• Upgraded our retail forecasting capability to leverage more automation and machine learning, allowing us to forecast more accurately and ensure availability
• Progressed the building of a new customer forensic data capability to draw on our rich data asset and drive relevant, timely and personalised digital experiences

Ongoing focus on sustainability

• Continued our journey to net zero carbon by switching all UK operations to renewable energy and offsetting our inbound logistics emissions with partner Kuehne+Nagel
• Joined the United Nation’s CFO Taskforce, which creates a market for investments into the organisation’s Sustainable Development Goals
• Enhanced our environmental and social governance by launching an E&S board, chaired by non-executive director, Jacqui Humphries 

Source : The Very Group

For all the very latest news and intelligence on the UK's largest home improvement and garden retailers, sign up for the Insight DIY weekly newsletter.