Very owner Shop Direct posts strong increase in sales and profit
In the year to 1 July, group sales increased by 5.6% on a like-for-like basis, or 3.7% on adjusted basis, to £1.93 billion after Very saw sales growth of 14.6%, or 12.6% on an adjusted basis, to £1.26 billion.
Underlying pre-tax profit climbed by 10.2%, or 6.6% on an adjusted basis, to £160.4 million.
The company also increased its number of new credit customers by 7.6%, with 14.1% growth at Very.
During the period, Shop Direct incurred exceptional costs of £121 million. This included £112 million in regulatory costs resulting from an increase in customer redress claims volumes across its market.
Sales via smartphone accounted for over half of Shop Direct’s online sales for the first time as the The MyVery app drove 32% of all Very’s mobile sales. This was up from 21% in 2016.
Alex Baldock, group chief executive at Shop Direct, said: “We’re pleased to report our fifth successive year of record sales and underlying profits. Once again, Very and mcommerce were the big drivers of our growth.
“Our fashion performance stood out in a volatile market as we brought even more famous brands within reach of our customers. Spotting the athleisure trend early boosted sportswear and V by Very became an £150 million brand in its first full year.
“Our long-term investments in digital, data, personalisation and Very are coming good. And our obsession with winning the ‘three-second audition’ on smartphones also continues to pay off. We’re delivering one of the most relevant shopping experiences on a 4.7-inch screen, with our five-star apps, digital marketing expertise and leadership in personalisation.”
The company said artificial intelligence is already driving results for the business and that it is planning to launch one of UK retail’s first AI-powered chatbots for customer service shortly.
Looking ahead, Baldock said: “We don’t expect the economic backdrop to get any easier, but we’ve started our new financial year in line with expectations and are confident of delivering another record year.”
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