Published
Jul 14, 2020
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Brand Architekts says lockdown not as bad as expected but sales are still down

Published
Jul 14, 2020


Personal care and beauty products group Brand Architekts said on Tuesday that the year to June 27 hadn’t been as bad as it had expected given that it included several months of lockdown. 


Brand Architekts


Yes, its sales performance during the second half of the financial year “was inevitably impacted by the Covid-19 pandemic, [but it] was stronger than the board had anticipated and communicated” at the time of its last trading update in April. 

That said, revenue generated in H2 was still “significantly below the comparative period last year”.

So what does that mean in numbers? Net sales for FY20 were £16.3 million, which excludes sales from discontinued operations and represents a decline of 17% on the prior year. Sales in the first half were £10.6 million, a decline of 15%, and in H2 they declined by 21%, with net sales of £5.7 million.

During the final quarter of the year, its brands' performance within UK grocers showed single-digit growth, while its online sales channels, whether through large e-tailers such as Amazon, or its own branded websites, “delivered significant growth”.

But that wasn’t enough to offset the “significant decline in other high street outlets whose store traffic was adversely impacted during lockdown”. Additionally, “several key international markets did not place orders during the last quarter of FY20, as a result of the closure of most general merchandise and department stores”.

But the board said it’s “confident that the new branded business model and structure will allow the business to respond to the significant changes in consumer shopping behaviour effectively and efficiently,” even though it expects group pre-tax profit for the full year to be significantly below last year.

The company has enough cash to see it through with its current £18 million being a big improvement on its net cash of around £15 million in January and net debt of over £7 million last year.

On Tuesday, the company also said that following the disposal of its Contract Manufacturing business in August 2019, it has put in place a new executive management team, led by Quentin Higham as CEO, “focused completely on the new standalone Brands business”. 

As part of the board succession planning, “to refresh the board and to ensure that we have the appropriate balance of skills, experience and knowledge for the long-term success of the business”, it has made some more changes too.

Non-Executive Chairman Brendan Hynes is stepping down after seven years this autumn and will be succeeded by Roger McDowell, the incumbent Senior Independent Director and Chair of the Remuneration Committee. He has “extensive knowledge of the business and provides a smooth and seamless transition”.

Meanwhile, Chris How, former CEO of the company when it was known as Swallowfield and also recently interim CEO, now becomes a Non-Executive Director.

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