Record Revenue for Booktopia, but Challenges Lie Ahead

The online book retailer reported a ‘challenging’ FY, with revenue up 7.5 percent to $240.8 million and its gross profits increasing by 6.3 percent on PCP. However, due to volatile economic conditions, there have been restructuring costs and overheads that have had a negative impact on its EBITDA.

Booktopia’s underlying EBITDA was $6.2 million, down from the FY21 results of $13.6 million. There was an $8.7 million negative impact on its EBIDTA due to several one-off expenses and customer fulfilment costs as a result of COVID.

The restructuring costs, including redundancies and the removal of former CEO Tony Nash, cost the business $1.3 million. This followed a review of overhead expenditure in May, aligning with its realignment of costs for the business’ growth strategy. Other costs that impacted its EBITDA included increased customer fulfilment costs associated with COVID, M&A-related costs, and the Welbeck Investment Impairment.

Booktopia has accelerated depreciation of $2.8 million for the costs of the new 2,000 sqm fulfilment centre, located in South Strathfield, and is expected to be operational by Christmas 2023.

“Booktopia remains Australia’s number one choice for book buyers, and we are very proud of how our team has responded to the market conditions over the last 12 months. We have continued to grow our business across our key metrics, even compared to the extraordinary levels of activity in FY20 and FY21,” said the Acting CEO of Booktopia, Geoff Stalley. “The last financial year also presented a number of challenges for our business as we dealt with Sydney’s lockdowns during the first half and the broader economic, supply chain and human resource challenges of the second half. We have taken decisive action to address rising costs and have developed a comprehensive strategy to return the business to sustainable, profitable growth over the next few years.”

Booktopia has also provided $6 million for an outcome agreement with the ACCC. In December 2021, the ACCC instituted Federal Court proceedings, alleging that Booktopia was ‘making false or misleading representations to consumers about their rights to refunds and other remedies for faulty or damaged goods’. The $6 million will be payable over a maximum term of five years, paying instalments of $1.2 million annually. The matter will come before the Federal Court in December 2022 for a hearing on the financial penalty and other remedial orders.

In its FY update, the retailer reported its average customer spend in CY22 increased to $134.94, up 6.4 percent from FY21. Moreover, its AOV is also up six percent to $75.59, compared to $71.07 in FY21. The average selling price has also increased from $27.39 in FY21 to $28.27 in FY22. The business is not providing any forecasts for the full year.

Following its announcement of its FY results, its shares have increased 19.23 percent to $0.31 a share. On a five-day basis, its shares have risen 12.73 percent but remain 72.32 percent down from six months ago.

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