Booktopia has released its disappointing first half results for FY23. The online book retailer will be entering its 20th year of operation next year and has ambitious plans to return to profitability.
Like many other retailers, Booktopia had a rough start to the financial year. Revenue is down 15.3 percent at $110.1m. According to the report released today, EBITDA is at $1.3m, down 68 percent. Booktopia says this is primarily due to lower revenue ($19.9m) and gross profit ($6.6m) offset by savings in employment and legal costs ($3.3m) which produced an underlying net loss of $3.9m.
In terms of actual units shipped, Booktopia has identified this number at 7.7m for last 12 months, down from 8.5m in the year prior. The total amount of books sold during the first half is 3.94 million, down 16.7 percent. The average selling price for each book dropped 2.4 percent to $27.60. However, the company expects the academic season to favourably impact sales as international students return for study and in-person study resumes for the majority of students across the country.
During this half, the company was also ordered to pay an ACCC penalty of $6 million for breaches in consumer protection laws late last year.
Reflecting results from other retailers, Booktopia receives the majority of its revenue from returning customers. 80 percent of revenue is coming from loyal repeat customers.
As reported last month, in response to this underperforming half, Booktopia has announced its plans to deliver up to $15 million earnings improvements with a series of cost cutting initiatives. According to last month’s business update, the business initiatives approved by the Board include 30 to 40 redundancies. Included alongside the organisational restructure is an initiative to optimise margins with some product cost increases, and a change in how the company recovers third-party delivery costs, resulting in a $4-5 million annualised earnings improvement.
“The first half presented difficult trading conditions with various economic headwinds combined with volatile conditions as consumer behaviour adjusted to the post-COVID retail environment,” Booktopia Chairman Peter George said.
“We have taken the necessary action to build a better business for the long term. We believe we have the right people, strategy, and brand to return to more traditional levels of growth in the future.”
Additionally, Booktopia today provided more insight into its new $12m Customer Fulfilment Center. The company confirmed today it expects to have its new highly automated Customer Fulfilment Centre open in November this year in time for critical end-of-year sales events including Black Friday and Christmas. The $12 million investment will reportedly allow for growth to at least $360 million in annual revenue.
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