Studio has hired a financial advisor to conduct a formal sale process, as revenues increase by 17.2%.
Studio has announced plans to explore its sale options following an increase in profits and sales amid the Covid-19 pandemic.
In the 26 weeks to 25th September, the online value retailer saw adjusted profit before tax increase 52% to £17.7m as more Brits moved to online shopping, whilst non-essential high street shops were shuttered for parts of the year.
Revenues increased by 17.2% to £268m during the period, as Studio’s active customer base grew by 15% to 2.1m.
In the third quarter to date, Studio also reported “materially stronger profit performance” as November saw a less promotional market than the same period last year, with revenues up 32% year-on-year.
Studio said it is now undertaking a strategic review to explore sale options after receiving a letter from shareholders Frasers Group in October. In the letter Frasers Group, which owns a 37% stake in the business, told Studio it thought the group was “misunderstood by the market and as a consequence, significantly undervalued” and “although this may be fixable over the long-term, the group should conduct a strategic review.”
The board has since appointed Stifel as its financial advisor to conduct a formal sale process, however no interested parties have been announced as yet.
“I am very proud of the way that this group has responded over the last few months to the challenges of Covid-19,” group chief executive, Phil Maudsley, commented. “These interim results are testament to the strengths of our digitally-focused value business and the ability of our colleagues and customers to adapt rapidly to change. Our strategy to grow the Studio customer base and increase our customers’ spend with us, supported by our flexible credit offer has delivered a record trading performance which underpins our confidence in the group’s medium-term growth prospects.”