The Cettire Ltd (ASX: CTT) share price is leaping higher on Thursday.
In morning trade, the online luxury retailer's shares are up 11% to $3.10 following the release of its FY 2023 results.
Cettire share price leaps on strong growth
- Gross revenue up 87% to $539.2 million
- Sales revenue up 98% to $416.2 million
- Delivered margin up 156% to $95.6 million
- Adjusted EBITDA of $29.3 million
- Net profit after tax of $15.97 million
- Cash of $46.3 million, with zero debt
What happened during FY 2023?
For the 12 months ended 30 June, Cettire continued its strong growth and reported an 87% jump in gross revenue to $539.2 million.
This reflects a 63% increase in active customers to 423,000, sustained strength in repeat customer purchasing behaviour, higher average order value, and healthy demand for luxury goods. In respect to repeat customers, 58% of Cettire's gross revenue is now from repeat customers. This is up from 50% a year ago.
Things were even better for Cettire's earnings, with both its EBITDA and net profit metrics swinging from losses in FY 2022 to profit in FY 2023.
A key driver of this was its delivered margin performance. It increased by 156% over the prior corresponding period to $95.6 million. This represents 23% of sales revenue, which is up from 17.8% a year ago.
Management believes this demonstrates the successful execution of several cost optimisation initiatives outlined in its FY 2022 results, which reduced fulfilment cost per order.
In addition, the company's paid customer acquisition expenses came to 8% of sales revenue in FY 2023, which is a big improvement from 14.9% in the last financial year.
Big returns for investors
The Cettire share price is now up more than 250% over the last 12 months.
Management commentary
Cettire's founder and CEO, Dean Mintz, said:
FY23 has been another year of tremendous growth and transformation for Cettire. Through strong execution against our strategy to maximise profitable revenue growth, Cettire grew rapidly whilst also delivering significant profitability and cash generation.
Cettire is a highly nimble business, with a largely flexible cost base. This enables us to adjust quickly to market conditions and optimise performance. The pace at which we have been able to drive improved performance through FY23 is something I am particularly proud of.
Outlook
Possibly giving the Cettire share price an additional boost today was news that FY 2024 has started strongly.
Management advised that the positive trading momentum continues into FY 2024 as healthy demand remains.
During the month of July, Cettire delivered positive adjusted EBITDA, with sales revenue increasing by approximately 120% over the prior corresponding period. Mr Mintz concludes:
We are pleased by the early trading in FY24, with all our key markets performing strongly. Cettire is well positioned for another strong year of growth and profitability. We are well advanced in our preparations for China market entry, which remains a very attractive market opportunity and offers significant incremental growth potential.
