Grays returns to profitability, exits B2C
Grays eCommerce Group has turned around the business, reporting statutory net profit after tax of $4.0 million, up from a statutory loss of $22.0 million in the prior corresponding period.
The company says its return to profitability is due to a renewed focus on its B2B business, which generated stronger revenues, and a successful investment program.
Revenues were up 14.6 per cent in the first half of the 2017 financial year, to $71.3 million, underpinned by B2B net revenue growth flowing from investments made.
EBITDA was down 12.4 per cent to $7.1 million, which the company partly attributed to its under-performing B2C division.
Commenting on the first-half results, Grays eCommerce Group’s CEO Mark Bayliss said, “Having successfully refocussed the business on its core strength of business-to-business (B2B) auctions, we are now building a growing and sustainable business.
“Over the past six months we saw the benefits from our investment in new facilities, systems and people start to flow through in the B2B division’s financial results. We continue to build on our strengths and grow in this attractive segment.”
The B2B division delivered strong results across the board, with gross sales and net revenue showing double-digit growth, and EBITDA increasing nearly 4 per cent.
The B2C division in contrast performed poorly, with 3.4 per cent growth in gross sales and an almost 10 per cent decline in net revenue, with an EBITDA loss of $0.3 million.
The company has decided to further rationalise its B2C categories to those that support B2B. It will undertake an orderly run-down of owned inventories, and B2C’s fixed cost base will be reduced.
“We believe that this approach to B2C is the right strategy. It will minimise future losses in B2C, while also ensuring that shareholder capital and management time is focused on the company’s growth engine, B2B, that will drive long-term shareholder value,” Bayliss said.
Following the company’s return to H1 profitability and growth opportunities, the board has declared a maiden interim dividend of 1.2 cents per share fully franked.
Looking ahead, Grays eCommerce Group expects to generate Group EBITDA in FY2017 at a similar level to that achieved in FY2016.