At the time of writing, the global luxury online retailer’s shares are down 14% to $2.60.
Cettire delivers explosive growth during the first half
- Gross revenue up 192% to $154.1 million
- Active customers up 208% to 209,000
- Product margin up 178% to $42.7 million
- Operating loss of $9.9 million compared to EBITDA of $4.8 million
- Net loss after tax of $8.3 million compared to a profit of $2.3 million
- Operating cashflow up 43% to $12.3 million
- Cash balance of $55.5 million at the end of December
What happened during the first half?
For the six months ended 31 December, Cettire delivered a 192% increase in gross revenue to $154.1 million. This was also more than the revenue of $124.5 million that the company generated during the entirety of FY 2021.
Management advised that this was driven by a 208% jump in active customers to 209,000, offset slightly by an 8% reduction in average order value to $712.
One big disappointment, which could be weighing heavily on the Cettire share price today, was that this stellar revenue growth did not translate into profit growth. In fact, the company posted a net loss after tax of $8.3 million, which compares to a profit of $2.3 million a year earlier.
This was because Cettire’s sales and customer growth was underpinned by a significant increase in advertising and marketing costs. For the six months, Cettire spent $25.9 million on these activities, which is up approximately 550% from just ~$3.9 million in the prior corresponding period. In addition, a 200% increase in merchant fees also weighed on its margins.
Cettire’s Founder, CEO, and Executive Director, Dean Mintz, appeared to be very pleased with the half.
He said: “A lot of the themes from our FY21 results continued in the first half of FY22. Cettire again grew very rapidly, substantially increasing unique visitors and active customers, further increasing the proportion of revenues from repeat customers, and overall continuing its growth trajectory.”
“The financial results delivered over the first half of FY22 demonstrate the substantial progress we’ve made in executing our growth strategy. A number of important enhancements were implemented to our consumer proposition including further localisation, enabled by our proprietary e-commerce storefront solution, and investing in our brand. What excites us is that Cettire has only just started and is in the early stages of its growth journey. The runway ahead is vast and we will continue to invest to capture the significant market opportunity we see for the business,” Mintz added.
The good news for shareholders is that Cettire has started the second half how it finished the first.
As of the end of January, the company’s unaudited gross revenue was up 242% on the prior corresponding period. However, no details were provided in respect to its profits for the period, though management hinted that its increased spend on marketing has continued.
Mr Mintz commented: “Our growth trajectory has continued into H2 FY22, where we have experienced a further acceleration in our growth rate in January. Given the global growth opportunity available to Cettire, we will be running the business to maximise revenues by further investing in brand and customer acquisition, to drive long-term shareholder value.”
“Our focus for the remainder of FY22 is to continue to enhance our customer proposition which is centred around our vast selection of luxury products, value and rapid fulfilment, whilst continuing to develop our deep and diverse supply relationships and investing in our world-class proprietary e-commerce technology that can be rapidly scaled to support entry to new product and geographic markets,” he concluded.