ProCook Group (PROC) H2 2024 earnings summary

Executive summary

• Returned to profitability in FY24 with profit before tax of £1 million, driven by margin recovery, disciplined cost management, and retail outperformance despite website transition disruption.

• Achieved 1.7% revenue growth year-over-year, excluding exited Amazon EU channels, with retail stores as the primary growth driver and market share gains.

• Expanded product range into electricals and opened two new stores, with further store expansion planned and a strengthened leadership team.

• Gross margin improved by 420 basis points to 65.7% year-over-year, mainly due to lower freight costs and targeted price cuts.

• Generated £2 million free cash flow, reducing net debt to £0.7 million.

Financial highlights

• FY24 revenue was £62.6 million (+0.4% YoY), with UK core business up 1.7% YoY.

• Gross profit reached £41.1 million (65.7% margin), up from £38.3 million (61.5%) in FY23.

• Underlying operating profit was £2.1 million (3.4% margin), and underlying EBITDA was £7.4 million.

• Operating costs increased by £1.4 million to £39 million, reflecting new store openings, payroll inflation, and marketing investments.

• Like-for-like retail growth was 2.8%, with total retail growth of 8.7% including new stores and closures.

Outlook and guidance

• Plans to open 10 new stores in FY25, targeting 100 UK stores, £100 million revenue, and a 10% operating profit margin in the medium term.

• Expect low single-digit like-for-like revenue growth in FY25, mainly from e-commerce recovery.

• Gross margin expected to remain stable despite Red Sea shipping disruptions and rising container rates.

• Working capital to increase by ~£1 million; new store capex ~£300,000 each.

• No dividend anticipated for FY25 as investments focus on growth; nil corporate tax cash payments expected.