The Very Group, which operates digital retailers Very and Littlewoods, today announces its full year results for the 52 weeks ended 29 June 2024.
- Very UK revenue increased 0.7% to £1.84bn (FY23: £1.82bn), while Group revenue declined 1.0% to £2.13bn. The underlying retail performance was ahead of the online non-food retail market and delivered growth in market share for Very UK[1].
- Top-line performance includes strong Very Finance revenue growth of 3.1% to £435.0m (FY23: £422.1m).
- Resilient top line and careful cost management saw pre-exceptional operating profit grow 17.1% to £218.3m (FY23: £186.5m), its highest level since FY19, with operating costs as a percentage of revenue reaching the lowest the Group has ever achieved at 23.2%, despite inflationary pressures.
- Earnings before interest, taxes, depreciation and amortisation grew 8.4% to £267.6m (FY23: £246.9m).
- Continued delivery against strategic pillars, including in the ongoing replatforming to Very’s cloud-based Skyscape platform, introducing a new app for Very Ireland customers, and launching a new brand marketing campaign.
- Customer experience improvements helped to deliver the Group’s best-ever net promoter score2 at 40 (+4).
Robbie Feather, CEO at The Very Group, commented: “Our unique business model, combining multicategory digital retail with flexible ways to pay, is more relevant than ever for our customers. In a challenging environment, our results reflect a resilient retail performance that remained ahead of the UK online non-food market, as well as a continued strong Very Finance performance. This top line resilience coupled with our continual focus on strong cost management, has driven robust earnings growth in the year. Our results are thanks to the inherent strength of our business model and our loyal and growing customer base. This is underpinned by the tireless work of our people and the benefits of our customer focused investment.
“We are relentlessly focused on our customers’ needs and are adept at continuous transformation to make sure we meet and beat their expectations. We continue to invest in finding new ways to serve our customers, enhancing their shopping experience and giving them access to our wide range of products covering almost every area of life. This is then supported by the convenience and breadth of our flexible ways to pay.
“We can look back on our FY24 performance with pride and I am confident that we have a great platform on which to build further,”
Financial highlights
- Very UK revenue increased 0.7% to £1.84bn (FY23: 1.82bn), while Group revenue declined 1.0% to £2.13bn.
- Underpinning these results were market beating retail performances at both the Very UK and Group level, reflecting strategic investments in pricing and assortment of key categories to keep us competitive in a tough market.
- Very Finance revenue grew 3.1% to £435.0m (FY23: £422.1m), supported by 2.3% growth in the Group’s average debtor book.
- Bad debt as a percentage of the Group’s average debtor book fell 1.1%pts year-on-year reflecting continued high-quality credit risk management.
- Group pre-exceptional operating profit grew 17.1% to £218.3m (FY23: £267.7m), the best result since pre-pandemic trading in FY19, driven by diligent cost management and strong Very Finance contribution.
- Operating costs as a percentage of revenue decreased 0.8%pts to 23.2%, which is the lowest level the Group has ever achieved. This is despite the significant inflationary pressures faced by the market.
- Earnings before interest, taxes, depreciation and amortisation grew 8.4% to £267.6m (FY23: £246.9m).
- Positive Group adjusted free cashflow (post-financing) of £67.4m (FY23: £128.4m), with the impact of heightened interest tempered by stronger EBITDA and our cost reducing measures.
Operational highlights
Very.co.uk category performance
- Toys, gifts, and beauty grew 3.0% year-on-year, following a particularly strong peak trading period. Sales across our toy ranges (+7.7%) and personal care (+15.5%) were notable highlights.
- Electrical continues to be Very UK’s largest category by retail sales, growing 0.9% despite annualising against the incredibly strong sales in air fryers in the prior year. This is underpinned by the performances in computing (+9.9%), Apple products (+8.5%) and mobiles, tablets and wearable tech (+7.5%).
- Fashion and sports declined 5.5% year-on-year in a challenging and contracting market. However, certain categories continued to perform strongly, such as casual womenswear (+3.0%), watches (+3.6%) and premium fashion (+15.5%).
- Despite poor weather impacting garden (-16.5%), Very only saw a slight decline in its Home category (-0.7%) reflecting resilience in the market. The retailer saw growth in nursery (+15.2%) and beds (+6.2%), but this was offset by declines in garden, upholstery (-5.1%) and home textiles (-2.7%).
- Very continued to expend its retail assortment so customers have more choice than ever. In particular, a number of new brands have been introduced in Sports, such as Oakley and Veja, and Fashion, such as Seasalt Cornwall and Diesel.
Harnessing tech and customer data to improve the retail experience
- The Group continued to make progress with its multi-year tech investment roadmap, moving towards a more flexible, cloud-based architecture, including:
o Ongoing migration to the Group’s new user centric ecommerce platform, Skyscape. The platform makes it easier to team up with best-in-class tech partners to bring a cutting-edge retail experience to customers. Almost 50% of web traffic now flows through the new platform.
o Rolled out AI-powered product discovery across the Very website and app. Now, customers benefit from more intelligent auto-suggest, and enhanced personalisation in their search results, meaning they find the right product faster and easier than before.
o Launched a new app for the Very Ireland brand, bringing key features such as biometric login and augmented reality shopping to Irish customers for an easier and more rewarding shopping experience.
o Implemented a new real-time customer feedback system which means colleagues can interact with the customer experience faster than ever. This has supported the Group’s record-breaking customer satisfaction score in FY24.
- Using data to truly understand customers and enhance their retail experience has helped the Group deliver its best-year net promoter score of 40, up 4pts year-on-year.
Giving customers choice in delivery with world class fulfilment capability
- Distribution costs as a percentage of revenue improved 0.5%pts. This reflects improved efficiency as a result of continued investment in our logistics and fulfilment operations, including the benefits arising from strategic changes in our delivery proposition.
- Further investment has also been made to the delivery proposition, and during the year infrastructure was updated to enable the introduction of a two-speed click and collect service, giving customers the choice of standard or next day for when home delivery doesn’t suit.
- At Skygate, the highly automated fulfilment centre in the East Midlands, the Group:
o Processed a total of 31.9 million items.
o Dispatched the fastest order in 16 minutes (from order placement to ready for dispatch).
o Dispatched 214,000 orders on the busiest day of its financial year, 26 November 2023.
