Shop Direct, which owns online retailers including Very and Littlewoods, has announced an 11% increase in EBITDA to £262.3m and a 9.5% rise in operating profit to £224.6m, for the year to 30 June, driven by strong sales at Very.com.
Total group revenue grew by 1.8% to £1.95bn, and revenue at Very rose 9.9% to £1.4bn for the year.
However, revenues at Littlewoods dropped by 14.5% to £569.7m, as a result of the closure of the retailer’s commission scheme and a challenging homeware market.
The group also announced a statutory loss before tax of £24.7m, compared with a profit of £24.9m last year. This was blamed on a provision of £128m to cover additional “customer redress”, as well as investment in a new fulfilment centre.
The construction of Shop Direct’s new 850,000 sq ft, distribution and returns centre at the East Midlands Gateway development has begun. Operational by 2021, the site will let the etailer increase its cut-off time for next day delivery to midnight from 7pm, and explore same day delivery in the future.
Group gross margin declined 0.9 percentage points to 39.9% for the year due to the higher proportion of electrical sales.
Shop Direct said that 74% of total online sales for Very are now made on mobile devices, and 25.4% come through the Very app.
Group chief executive Henry Birch, who joined the business four months ago, said: “Impressive growth in Very, and increases in group revenue and EBITDA show the resilience of our business, which is mobile-first, multi-category, and both a retailer and a credit provider.
“In the last year we’ve become an even more customer-centric organisation, growing customer numbers to more than four million. Our record net promoter score (NPS) is testament to our progress, as is making vital investments in technology and infrastructure to meet our customers’ future needs.
“We’re trading in line with our expectations and preparing for the important peak season. It’s a changing and competitive market but our growth trajectory and differentiated customer offer gives us confidence for the year ahead.”