Sales at Otto UK have stabilised after slipping back just 2.2% to £709.4 million for the year ended February 28.
The home-shopping company posted its best-ever profit of £29.6m, compared with just £2m the previous year, but this included a one-off exceptional credit of £105.9 million relating to incorrect VAT charges from HM Revenue & Customs, which skewed the results.
Mike Hancox, outgoing chief executive of Otto UK, said: “I’m pleased we’ve managed to steady the sales decline and increase profitability. The main catalogues [Freemans, Grattan and Look Again] are still declining by single digits, but this compares with three years ago when they were down 12%.
“We’ve improved margins and the cost base, and implemented one-off initiatives which have been cash generative. The business was losing about £26m when I joined.”
Hancox, who will step down from Otto UK in September, said sales at Oli, the young fashion etail site it launched and spent £25m on last year, were lower than expected at £23m.
Market speculation suggests Otto UK could shut or relocate its Bradford head office, which houses more than 1,000 employees. Hancox said: “As part of a strategic review earlier this year all aspects of the business were examined but no decision has been made.”