The Very Group said its business model has proven resilient in the face of rapidly-changing customer behaviour.
The Very Group has posted strong annual revenue growth that saw it exceed £2b for the first time, prompting the online retailer to forecast a return to profit this year.
In a trading update for the year ending 30th June, the owner of Littlewoods and Very said it had seen a 65% increase in website visits, allowing its full year revenue to surpass £2b for the first time.
The Very Group said it now expected to report full year underlying EBITDA to be in the range of £255m to £270m, with the board expecting this to deliver a positive profit before tax.
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. 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 £200m.
“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 commented. “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.”
In the final quarter of trading, Very retail sales grew by 36% year-on-year, driven by growth in electrical and home categories of 78% and 53% respectively.
Very share of the UK non-food market also grew by more than 1% to almost 3% 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% in the fourth quarter, compared with the prior year.
Henry concluded: “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.”