Despite facing challenges, Hobbycraft’s revenue grows while profits decline sharply, influenced by external pressures.
- Hobbycraft reports an 80% drop in profits to £393,000, largely due to one-off costs and inflationary pressures.
- The company achieves a revenue increase of 3.4%, bringing total sales to £218.3m with slight like-for-like sales growth.
- Investments continue with £8.7m allocated for new stores and digital service enhancements such as a new app.
- The financial outlook remains positive, expecting growth despite UK retail market pressures.
Hobbycraft has revealed an 80% decrease in profits for the fiscal year ending on 18 February 2024, with profits dropping to £393,000 from the previous year’s £2m. This sharp decline is attributed primarily to one-off expenses coupled with rising inflationary pressures affecting operational costs.
Despite these profit challenges, Hobbycraft has managed to achieve revenue growth, increasing sales by 3.4%, equivalent to a £7.2m rise, pushing total revenue to £218.3m. Additionally, like-for-like sales saw a modest growth of 1.1%, indicating a stable customer base.
The company’s adjusted EBITDA showed resilience, reaching £10.3m, a slight dip from last year’s £10.7m. This performance was supported by improved gross margins, which increased to 58.4% from 56.9%, largely due to strategic pricing adjustments and an increase in the sale of own-brand products.
Hobbycraft has intensified its focus on expanding its digital and physical presence. Online sales and click-and-collect services have grown by 32.1% compared to pre-pandemic levels, showcasing the company’s adaptability to changing consumer behaviours. The retailer also opened seven new stores in various key locations, enhancing its retail footprint across the UK.
Investments in the business continue, with £8.7m earmarked for further store openings and enhancing digital offerings, including launching a new Hobbycraft app. This forward-looking strategy reveals an optimism for overcoming market pressures, with the company anticipating further sales and margin improvements in the current financial year.
Hobbycraft remains focused on growth and adaptation despite recent financial hurdles.
