Hobbycraft has reported an 80% drop in profits for the year ending February 2024, despite achieving revenue growth.
- The company’s profit fell to £393,000 from £2 million the previous year due to one-off costs and inflation.
- Despite a decrease in profit, adjusted EBITDA was reported at £10.3 million, supported by improved gross margins.
- Sales increased by 3.4% to £218.3 million, with like-for-like sales growing by 1.1%.
- The company continued to expand, opening seven new stores and focusing on digital enhancements.
Hobbycraft, a prominent arts and crafts retailer, has faced a substantial 80% decrease in profits for the year concluding in February 2024. This decline brought profits down to £393,000 from the £2 million recorded the year prior. The company attributes this significant downturn to inflationary pressures and specific one-off costs that impacted the financial outcomes.
However, the company’s financial health maintains some robustness, as evidenced by an adjusted EBITDA of £10.3 million, which marks only a slight decrease from the previous year’s £10.7 million. This stability is largely credited to improved gross margins, which rose from 56.9% to 58.4%. These enhancements are a result of strategic pricing adjustments and an increase in sales of private-label products.
In terms of revenue, Hobbycraft experienced a 3.4% growth, bringing total sales to £218.3 million. Alongside this increase, like-for-like sales showed a modest rise of 1.1%, underlining the steady demand for the retailer’s offerings despite broader economic challenges.
Expanding its physical presence, the company opened seven new stores in various locations including Canterbury, Glasgow, and Lakeside. This expansion brings Hobbycraft’s total number of stores to 119. Additionally, there has been a considerable push towards enhancing digital capabilities, reflected in a 32.1% growth in online sales and strengthened click-and-collect services when compared to pre-pandemic levels.
Looking towards the future, Hobbycraft remains optimistic, outlining plans for further growth and development. The retailer is investing £8.7 million in new store openings and enhancements to its digital platforms, including the introduction of a dedicated mobile application. Leadership expressed confidence, indicating that the current fiscal year has begun positively with continued sales and margin improvements.
Hobbycraft’s strategic focus on digital growth and store expansion positions the company for future recovery despite recent profit challenges.
