Samarkand FY23 Results
Samarkand Group plc, the cross-border eCommerce technology solution provider, is pleased to announce its audited results for the year ended 31 March 2023 ("FY23").
FY23 Financial highlights:
Revenue increased by 5.4% to £17.5m (2022: £16.6m) Brand Ownership revenues increased 48.1% to £6.7m (2022: £4.5m) Nomad Technology revenue decreased 19.4% to £6.0m (2022: £7.5m) Distribution revenues remained flat at £4.4m (2022: £4.4m) Gross margin increased from 50% to 55% Adjusted EBITDA loss decreased to by 64% to £2.2m (2022: £6.2m) Operating loss after taxation decreased by 40% to £4.6m (2022: £7.7m)
FY23 Strategic and operational highlights:
Launched successful open offer in September 2022, raising £1.9m from existing shareholders, giving the group the ability to continue to pursue its strategic objectives. Generated top line growth across the Group despite ongoing COVID related disruptions in China during the year. Major reduction in losses vs prior year as a result of adjustment of cost base and improvement in gross profit margins as we focus on our core activities and our goal of moving the Group into profitability. Expanded the portfolio of niche premium skincare and health and wellness brands, targeting key consumer trends in China. Saw the benefit of investment in acquisitions and impact of improvements made in higher growth rates for our owned brand portfolio in the UK and in China. Expanded the Napiers the Herbalists premium natural beauty product line, grew sales channels and successfully introduced the brand in China. Expanded our influencer livestream commerce capabilities through the Douyin social commerce platform. New material sales opportunities were unlocked for our brands, working in partnership with Chinese influencers. Shifted the focus of our technology resources to embedding and commercialising what has already been developed vs feature innovation enabling a reduction in our cost base. Improved operating efficiency across the business and strong progress in reducing inventory levels and improving stock turns.
Post period end highlights:
April and May revenue 13% above prior year, with an improvement in gross profit percentage from 53% to 63%. Revenue during the key shopping festival in June was 25% lower than prior year. The cancellation of key promotional events and weaker than expected performance across several livestream channels resulted in lower than expected sales. As a result, Q1 FY24 overall revenue is 5% below prior year. July month is on track to be in line with our expectations in terms of top and bottom line results. A number of new sales channels and partner relationships in the China market will come on stream in Q2 expanding the route to market and sales potential for our brands. Strong growth in influencer led livestream commerce with sales via the Douyin platform growing 220% year over year in Q1 FY24. Extended partnership with 1 existing brand and added 7 new niche beauty and skin care brands to our portfolio related to emerging skincare trends and beauty tools. Signed leading Southeast Asian duty-free retailer to our Nomad Checkout platform for cross-border DTC sales. Samarkand named “Best Cross-border Campaign” finalist in 2023 eCommerce Awards, in recognition of highly innovative China market entry strategy for Napiers the Herbalists, effectively leveraging the rapidly expanding Douyin platform to generate substantial sales.
David Hampstead, Chief Executive Officer of Samarkand Group, commented:
“I am delighted that we have been able to grow the business and to make strong progress towards profitability in an unprecedented and challenging trading environment. This demonstrates the resilience and adaptability of the business and in particular the capability of our colleagues. The reopening of the Chinese economy, a growing pipeline of new clients and channel partners and an ongoing focus on operational efficiency puts us in a good position to capitalise on opportunities that may emerge in the market. We are encouraged by the start of the new financial year and remain confident that the interplay of our China market development capabilities, underlying eCommerce technology and owned brand portfolio will put us in a good position to make further progress towards our goal of profitability.”
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