// The Very Group’s annual sales exceeds £2bn for the first time
// It saw a 65% increase in website visits
// Management now expects a return to profit for the year
The Very Group has posted strong annual revenue growth that saw it exceed £2 billion for the first time, prompting the online retailer to forecast a return to profit this year.
In a trading update for the year ending June 30, the owner of Littlewoods and Very said it had seen a 65 per cent increase in website visits, allowing its full year revenue to surpass £2 billion mark for the first time.
The Very Group said it now expected to report full year underlying EBITDA to be in the range of £255 million to £270 million, with the board expecting this to deliver a positive profit before tax.
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The company said its business model has proven resilient in the face of rapidly-changing customer behaviour, and despite experiencing peak trading levels, it also maintained full operational capacity throughout the Covid-19 crisis.
The Very Group said it did not utilise the government’s furlough scheme, nor did it need to access government-backed loan schemes.
It also boasted a strong liquidity and cash position with year-end cash headroom of more than £200 million.
“Thanks to the tireless efforts of our colleagues, we performed very strongly in quarter four, despite the challenges of Covid-19,” chief executive Henry Birch said.
“We prioritised the safety of our people and delivered an uninterrupted service for new and existing customers, who chose us as their preferred shopping destination during lockdown.
“As in the financial crisis, our business model proved adaptable and resilient in the face of volatile conditions and changing consumer buying patterns.
“We experienced peak trading levels and recruited unprecedented levels of new customers as our online multi-category model, supported by financial services came to the fore.”
He added: “Despite operational challenges caused by Covid, we adapted and pressed on with the migration to our Skygate fulfilment centre, which will create game-changing new benefits for our customers and our business.
“Economic conditions will continue to be challenging, but we believe we are more relevant than ever for customers, who are increasingly buying online.
“We are well positioned to continue the strong trading into the new financial year and will continue to invest to ensure we are at the forefront of whatever the new normal may be.
“Our purpose to ‘Make good things easily accessible to more people’ is more relevant than ever and we look forward to helping even more UK shoppers seamlessly access the products they need for themselves and their families.”
In the final quarter of trading, Very retail sales grew by 36 per cent year-on-year, driven by growth in electrical and home categories of 78 per cent and 53 per cent respectively.
Very share of the UK non-food market also grew by more than one per cent to almost three per cent and the top five performing departments were gaming, vision, computing, garden tools/DIY and small domestic appliances.
Overall group retail sales, including Littlewoods, grew by 28 per cent in the fourth quarter, compared with the prior year.
Although electrical and home grew strongly, the significant decline in fashion, which has relatively higher margin rates, resulted in overall cash margin at a similar level to prior year.