Footasylum: Revenues rise 19 percent while profit falls

Footasylum plc in its unaudited results statement for the 26 week period ended August 25, 2018 said that revenues increased 19 percent to 98.6 million pounds (130 million dollars) with growth across all channels and major product categories. Store revenue was up 12 percent to 66.3 million pounds (87.4 million dollars), which the company said was however impacted by challenging trading conditions and delays in store openings and upsizes. Adjusted EBITDA of 1.5 million pounds (1.9 million dollars) against 4.4 million pounds last year, Footasylum added, reflects a lower gross margin and increased investment for future growth, while adjusted loss before tax was 4 million pounds (5.2 million dollars) compared to 2.3 million pounds last year.

Commenting on the trading, Barry Bown, Executive Chairman of Footasylum, said in a statement: "This has been a difficult trading period for Footasylum as we have contended with tough conditions on the high street and some delays in our programme of new store openings and upsizes ahead of the peak trading period. While we are pleased to be reporting good top line growth, and a particularly strong year-on-year revenue performance in both online and wholesale, our profitability has been impacted both by a lower overall gross margin from higher clearance activity in stores, as well as the extensive investments that are being made to position the company for future growth.”

Highlights of Footasylum’s half year performance

During the period under review, the company opened one new store, bringing the total store estate to 66, with plans to open a further five stores and upsize a total of five stores across the financial year, with four upsizes planned before peak trading.

Online revenues were up 29 percent in HY19 to 30.2 million pounds (39.8 million dollars), accounting for 31 percent of total revenue, up from 28 percent in HY18. In March 2017 Footasylum launched its wholesale operation, selling its own brands - initially Kings Will Dream - through a network of partners from small stores to major European operators. Revenue from wholesale was 2.1 million pounds (2.7 million dollars), around 2 percent of total revenue. As a result of its online and wholesale operations, the company generated 3 percent of its revenue internationally in HY19.

Footwear sales increased by 7.9 million pounds or 17 percent to 53.8 million pounds (70.9 million dollars) while apparel grew by 23 percent to 41.2 million pounds (54.3 million dollars). Accessories revenues were down 5 percent to 3.6 million pounds (4.7 million dollars).