nve sto r upd a te Y20 H1 Re sults & I F 02 F Y20 H1 Ove - PDF document

nve sto r upd a te Y20 H1 Re sults & I F

02 F Y20 H1 Ove rvie w A PE RI OD OF BAL ANCI NG GROWT H WI T H I MPROVI NG PROF I T ABI L I T Y  Revenues grew by 16% from £42.5m to £49.4m  Strong European sales growth of 33%; UK sales reflecting margin growth strategy  EBITDA of £2.0m (FY19 H1 £0.7m); Operating Profit improved by £0.5m to £0.2m SUST AI NE D MARGI N RE COVE RY RE MAI NS OUR PRI MARY OBJE CT I VE  Gross margin improved by 250bps to 25.2% (FY19 H1: 22.7%)  Gross profit increased by 29% from £9.6m to £12.5m  Driven by a focus on higher margin product sales and reducing delivery costs CONF I DE NT OUT L OOK F OR T HE PE RI OD AHE AD  Well prepared for the peak trading period  Well placed to deliver FY20 EBITDA expectations in line with Board expectations

03 F Y20 H1 Hig hlig hts We b site s Pro fita b ility Sa le s EBITDA TOTAL REVENUE GROWTH WEBSITE VISITORS FY20 13.4m FY20 FY20 £2.0m £49.4m 10.0m £0.7m FY19 FY19 £42.5m FY19 £31.2m £0.7m FY18 7.1m FY18 FY18 £49.4m £2.0m 13.4m +16% +34% +206% INTERNATIONAL GROWTH EBITDA MARGIN WEBSITE CONVERSION FY20 3.0% FY20 £24.6m FY20 4.0% £18.5m FY19 3.2% FY19 FY19 1.5% 2.8% £13.3m FY18 FY18 2.3% FY18 3.0% £24.6m 4.0% ‐20bps +33% +250bps * FY20 data is for the 6‐months ended 30 September 2019; FY19 data is for the 6‐months ended 31 August 2019

Ove rvie w ina nc ia l Section 2 F

05 F Y20 H1 F ina nc ia l Hig hlig hts PROF I T ABI L I T Y FY20 FY19 FY18 GROSS PROFIT £'000 % of total sales £12.5m FY20 FY19 £9.6m Gross profit 12,460 25.2% 22.7% 25.0% FY18 £7.8m European Distribution (838) (1.7%) (2.0%) (2.2%) £12.5m +29% Marketing costs (3,931) (8.0%) (8.2%) (8.1%) EUROPEAN LOCAL COSTS * UK labour costs (4,003) (8.1%) (7.8%) (8.4%) £1.2m * FY20 FY19 £0.8m Other costs (1,692) (3.4%) (3.2%) (4.0%) FY18 £0.7m EBITDA margin 1,996 4.0% 1.5% 2.3% £1.2m * FY20 cost includes IFRS16 costs replacing rent

06 T ra d ing K PI s Period ended 13m to 31 Mar 19 31 Aug 18 30 Sep 19  Continuing strong sales growth especially internationally, now Rate of overall sales growth 36.2% 16.2% 36.3% representing 50% of sales (FY19 Rate of UK sales growth 34.1% 3.3% 32.9% H1: 42%) Rate of International sales growth 39.0% 33.0% 40.6%  UK growth impacted by competitive local market in other‐ Own‐brand sales (£’000) 8,978 12,873 31,289 brands Own‐brand growth 25.7% 43.4% 39.6% Other‐brand sales (£’000) 31,959 34,355 82,125  Own brand growth continues to Other‐brand growth 39.5% 7.5% outpace other brand growth 34.8% Own‐brand % of total sales 21.1% 26.1% 26.5%  Marketing cost increased 12% compared to 16% revenue growth Marketing costs (£'000) 3,500 3,931 9,752 Marketing as % of sales 8.2% 8.0% 8.3%  Labour costs % of sales reflect investment in operations well ahead of peak Total labour costs (£'000) 3,750 4,681 9,547 Labour costs as % of sales 8.8% 9.5% 8.1% * 13m growth % to 31 Mar 19 compares with 13 months to 31 Mar 18 * FY20 H1 growth compares 6m to 30 September 2019 with 6m to 31 August 2018

07 I nc o me Sta te me nts Period ended 13m to 31 Mar 19 31 Aug 18 30 Sept 19  Sales growth of 16% £'000 £'000 £'000  Marked improvement in gross Total Sales 118,155 42,521 49,397 margin from 22.7% to 25.2.% Product Profit* 31,558 11,264 13,966 Product Margin 27.5% 29.6%  27.8% European DC overheads of £1.2m (FY19 H1: £0.8m) Gross Profit 26,916 9,636 12,460 GP% 22.8% 22.7% 25.2%  4.0% EBITDA margin (FY19 H1: 1.5%) EBITDA 2,281 652 1,996 EBITDA as % of sales 1.9% 1.5% 4.0%  Depreciation includes £0.5m relating to ‘Right of Use’ assets Depreciation & Amortisation (2,292) (983) (1,771) under IFRS16 Net Finance expenses (598) (214) (504) Taxation 446 177 134  Finance expenses include £0.2m in interest relating to new lease Net loss (163) (368) (145) liabilities under IFRS16 Earnings per share (0.8p) (1.8p) (0.7p) * Representing product profit, excluding warranty income and consumer finance commissions

08 I F RS16 T a b le Reported £m Excluding IFRS16 IFRS16 numbers Gross profit 12.5 ‐ 12.5  Overheads (11.2) 0.7 (10.5) Recognised property leases for York, Manchester, Sweden and Germany EBITDA 1.3 0.7 2.0  Effective 1 April 2019; no prior year restatements Depreciation and Amortisation (1.2) (0.6) (1.8)  Opening Right of Use assets: £9.8m EBIT / Operating Profit 0.1 0.1 0.2  Opening lease liabilities: £10.6m Financial expenses (0.3) (0.2) (0.5) PBT (0.2) (0.1) (0.3)

09 Ba la nc e She e t Ove rvie w As at 31 Mar 19 31 Aug 18 30 Sep 19 £'000 £'000 £'000  Strong balance sheet – £18.6m net Freehold land and buildings 7,191 7,276 7,117 assets; £3.4m cash at bank at a Other PPE including Right of Use asset 3,575 2,535 13,054 seasonal low‐point in the year Intangible asset – software platform 5,814 4,905 6,563 Intangible assets – brand and goodwill 2,013 2,046 1,984  Fixed assets 18,593 16,762 28,718 Net Debt of £9.7m (FY19 H1: £7.6m) Inventories 18,661 21,326 24,032 Trade and other receivables 1,657 3,825 3,812  Continued investment in software Cash and cash equivalents 5,304 2,655 3,395 platform – £1.4m (FY19 H1: £1.1m) Current assets 25,622 27,806 31,239  Stock increased £2.7m (13%) in Loans and borrowings (8,555) (5,912) (9,146) part reflecting seasonal uplift Trade and other payables (11,533) (14,874) (17,745) ahead of peak Current liabilities (20,088) (20,786) (26,891)  Adoption of IFRS16 resulted in Net current assets 5,534 7,020 4,348 opening Right of Use assets of £9.8m and lease liability of £10.6m Loans and borrowings (4,272) (4,343) (3,970) Other long term liabilities (1,148) (943) (10,473) Non‐current liabilities (5,420) (5,286) (14,443) Net assets 18,707 18,496 18,623

£000’s 10 Ca sh F lo w Ove rvie w Open/Close

Busine ss Re vie w Section 3

12 Co mme rc ia l & Ope ra tio na l pro g re ss Comme rc ia l Prog re ss  Invested into higher margin SKUs:  Own brand focus  Reduced investment into lower margin other brands  Marketing focused on higher margin SKUs  Courier agreements renegotiated  Returns policies reviewed and efficiency improved Returns processing centre Ope ra tiona l Prog re ss  Upgraded Warehouse Management System now in place  24/7 operations planned between November and January in the UK  UK Management team expanded  Expanded UK on‐site storage capacity  UK Third party contingency facilities in place  Continuing shift to European distribution hubs Swedish distribution hub – June 2019

13 F Y20 H1 We b site me tric s Mobile shift c ontinue s H1 We bsite da ta FY18 FY19 FY20 diff FY18 FY19 FY20 diff Total unique website visitors 7.1m 10.0m 13.4m +33% UK mobile visitors 1.6m 2.2m 3.3m +51% Total pages viewed 37.5m 50.1m 66.1m +32% European mobile visitors 1.7m 2.9m 5.2m +80% UK website visitors 3.4m 4.3m 5.0m +16% Mobile % of total 47% 52% 65% +1300 BPS European website visitors 3.7m 5.7m 7.9m +38% Mobile revenue £8.2m £13.8m £20.3m +47% UK conversion rate 3.59% 4.61% 4.78% +17 BPS Mobile conversion 1.65% 1.95% 1.96% +1 BPS European conversion rate 2.14% 2.20% 2.08% ‐12 BPS  Mobile conversion improving, but remains lower than desktop N.B. FY20 figures are for the 6 month period to 30 September 2019; FY18 and FY19 figures are for the 6 month period ended 31 August 2017 and 2018 respectively We bsite c onve rsion ra te We bsite visitor g rowth 4m 5 Unique monthly visitors 4 3m 3 % 2m 2 1 1m 0 0 FY16 FY17 FY18 FY19 FY14 FY15 FY16 FY17 FY18 FY19 UK Conversion Rate European Conversion Rate

14 F Y20 H1 Custo me r me tric s Custome r sta tistic s Profita ble from first tra nsa c tion FY18 H1 FY19 H1 FY20 H1 FY18 FY19 FY20 Diff Average order value £131.66 £127.48 £120.05 Total database 1.55m 2.19m 3.19m +46% Gross profit per transaction £32.92 £28.94 £30.25 Email subscriber database 0.73m 0.79m 0.72m ‐9% Active customers (12 months) 0.39m 0.55m 0.77m +40% Relevant Marketing cost £2.34m £3.28m £3.65m Repeat customers last 12 months 25.8% 26.6% 27.0% +40 BPS New customers acquired 131,993 203,784 246,047 Cost of acquisition £17.69 £16.08 £14.82 Sales life time value £200 £190 £183 ‐4% Custome r De mog ra phic s Re pe a t c ustome r numbe rs, F Y15 – F Y19  More than 95% of 160,000 65+ customers are end users 55‐64 120,000  Customers range from 45‐54 Age parents & beginners, to professionals 35‐44 80,000 25‐34 40,000 18‐24 0% 10% 20% 30% 0 FY15 FY16 FY17 FY18 FY19 % of UK Revenue N.B. FY19 figures are for the 13 month period to 31 March 2019