Hobbycraft achieves robust results with Adjusted EBITDA of £15.0m, growing sales +11.4% versus pre-pandemic levels following April 2021 store reopenings
FY22 Financial Highlights 1
- Strong sales performance with total revenue +14.8% to £203.1m (FY21: £176.9m) as we annualise store closures during FY21
- Total sales growth of +11.4% from the point stores reopened in April 2021 compared to pre-pandemic levels (FY20) and Total LFL sales growth of +5.0% on a 2-year basis, compared to FY20
- Adjusted EBITDA of £15.0m (FY21: £13.8m and FY20: £14.8m)
Dominic Jordan, CEO of Hobbycraft, said: "I am delighted to report another set of robust results with double-digit sales growth compared to pre-pandemic levels from the point that our stores reopened in April 2021 and full-year Adjusted EBITDA of £15.0m.
The financial year began during the third national lockdown and as a ‘non-essential retailer’ our stores were closed for the first seven weeks of year. Like other retailers we also suffered with on-going supply chain challenges, particularly in the run-up to peak trade, and experienced a significant increase in freight costs which compounded wider inflationary pressures across operations.
However, we continued to invest to drive future growth with the development of our new website platform which launched in March 2022, as well as investing in our store estate with the opening of seven new stores. This past year also saw the launch of our new Workshop channel with both online and store workshops adding a new revenue stream for the business, with exciting opportunities to grow this going forwards.
Our performance underlines the strength and breadth of our offer and the truly cohesive multichannel model we have built over recent years. It is also a testament to our exceptional colleagues who continue to inspire and provide fantastic service to our customers. I would like to thank all our colleagues for their continued hard work and passion.
As we emerge from the pandemic the business is incredibly well placed to build on the excellent performance in FY22 with multiple new initiatives including the new website, Workshop channel, further new stores and a subscription model which launches in the coming year. However, we are conscious that the year ahead will be very challenging, particularly given the significant inflationary pressures on our customers and we are starting to see this impact on market demand in the early part of FY23."
FY22 Operational and Strategic Highlights
- E-commerce sales grew +58.2% from the point that stores reopened in April 2021 compared to pre-pandemic levels (FY20)
- Continued growth in Click and Collect drove footfall to stores, with Click and Collect representing 33% of all E-commerce orders
- Hobbycraft Club has grown to 5.9 million members
- Targeted digital marketing, Facebook Live and YouTube demos drove engagement with new and existing customers
- Launch of new Workshop channel with both online and store workshops adding a new revenue stream for the business
- Seven new stores opened in Exeter, Leicester, Rochester, Chichester, Cirencester, Boucher Crescent (Northern Ireland) and Wimbledon, creating 100 new jobs.
Leading product ranges and customer service:
- Focused on product newness and breadth of offering whilst continuing to rationalise the range to build a simpler and better business
- Further enhanced product mix to provide customers with evolving specialist and inspirational products through more accessible pricing
- Achieved a Net Promoter Score (NPS) of 89.4% reflecting industry-leading customer satisfaction
- Further increased the sustainable product mix and made further progress on our packaging removal programme
A great place to work:
- In May 2022, Hobbycraft was voted the No.1 best big company to work for in the UK in the Best Companies survey, maintaining its 3-star accreditation – the highest standard of workplace engagement – from Best Companies Ltd
- Continued fundraising for our charity, Together for Short Lives, taking the total raised to £2.2m since the start of our partnership
- Further invested in our in-house Artisan programme with 113 Artisan colleagues across the business by the end of FY22 and 22 Artisan-developed products launched for sale, with all profits going to the Artisans
The decline in consumer confidence, brought about by the ongoing cost of living crisis, presents significant headwinds for the coming year. However, we continue to pursue multiple initiatives to mitigate against this challenging market:
- Further digital investment to enhance online customer experience and proposition following the launch of our new customer website in March 2022 and increasing the range of online workshops where customers can discover new crafts and master top techniques with help from our talented colleagues
- Development of the ‘experiential’ offering in stores through demos and workshops hosted by our in-house Artisans
- Launch of a new subscription model to support dedicated crafters, providing a range of additional benefits
- Plans to add to the estate of 109 stores by opening three new stores across the UK, including Bromborough, Biggleswade and Southend, creating 40 new retail jobs
- Priority focus remains on our broad ESG agenda, driving further progress in all key pillars from sustainable sourcing and packaging removal through to how we maximise diversity, inclusion and belonging across all aspects of our business
1 All FY21 metrics provided on a comparable 52-week basis