TIDMITS
RNS Number : 5749G
In The Style Group PLC
27 July 2021
27 July 2021
In The Style Group plc
("In The Style", the "Company" or the "Group")
Annual Results for the 12 months ended 31 March 2021
Transformational year for In The Style
In The Style, the fast-growing digital womenswear fashion brand
with an innovative influencer collaboration model, announces its
results for the 12 months to 31 March 2021 (the "Period") following
the Group's successful Admission to the London Stock Exchange's AIM
on 15 March 2021 (the "Admission" or "IPO").
Financial Highlights:
31 March 2021 31 March 2020
Financial KPI's GBP'000 GBP'000 Change
------------------- -------------- -------------- -------
Revenue 44,705 19,303 +132%
Gross Profit 20,589 10,234 +101%
Adjusted* EBITDA 3,799 (1,136)
Profit Before Tax
(PBT) 125 (2,157)
------------------- -------------- -------------- -------
Adjusted* PBT 2,471 (2,157)
------------------- -------------- -------------- -------
Adjusted* EPS (p) 0.002 (0.001)
------------------- -------------- -------------- -------
*To provide comparability across reporting years, the results
within this report are presented on an 'underlying' basis. In the
current year, total Adjusting Items of GBP2.3m relate to costs
associated with the Group's IPO as well as one-off bonuses awarded
prior to the Group's IPO.
-- Revenue increased 132% to GBP44.7 million (FY20: GBP19.3 million)
o Direct-to-consumer revenue increased 108% to GBP36.4 million.
(FY20: GBP17.5m)
o Wholesale revenue increased 353% to GBP8.3 million (FY20:
GBP1.8 million).
-- Adjusted EBITDA increased to GBP3.8 million, ahead of
expectations (FY20: loss of GBP1.1 million).
-- Adjusted Profit Before Tax increased to GBP2.5 million (FY20: loss of GBP2.2 million).
-- Successful IPO in March 2021 raising GBP11.0 million in gross
proceeds from institutional investors to support the Group's
long-term growth. As a result, at the Period end the Group had cash
of GBP11.9 million (FY20: GBP2.0 million).
Operational highlights:
-- Increased frequency of new product collection launches,
moving from a typical frequency of up to two collections per week
in FY20 to consistently releasing between three and four new
collections per week in FY21. This supported progress across
several operational KPIs:
o Website visits increased 30% year on year;
o Conversion rate improved 62bps year on year;
o Average order value increased 10% year on year;
o Order frequency increased 16% year on year
-- New customer acquisition grew 19% year on year
o Excluding the customer acquisition impact of the
well-supported Be Kind charity campaign that the Group first ran in
February 2020, in the prior financial year, and repeated in
February 2021, new customer acquisition increased 59% year on
year.
-- Sales via the proprietary In The Style app increased
significantly to represent 55% of total e-commerce sales during the
Period (FY20: 19%).
-- More than GBP200,000 raised for the Samaritans, Family Action
and Age UK charities through sales of popular ranges such as the
'Be Kind' collection and charity Christmas jumpers.
Post Period end highlights:
-- Nine new influencers have launched collections since the year
end including the highly successfully new collaboration with TV
personality and influencer Stacey Solomon with record sales
generated from the initial collection launch.
-- New partnership launched with Asda to sell In The Style
collections across more than 100 Asda stores.
Current trading and outlook:
-- Sales in the first quarter of the FY22 financial year are 44%
ahead of the prior year, despite the strong 'lockdown' comparatives
in FY21.
-- Both e-commerce and wholesale channels have performed
strongly over the first quarter of the new financial year with
several successful collection launches from the Group's existing
influencers including the launch of the debut Stacey Solomon x In
The Style collection.
-- Underpinned by its unique and dynamic model, relevant brand
and broad customer appeal, In The Style is very well-positioned to
continue its strong growth.
Adam Frisby, CEO and founder of In The Style, commented:
"FY21 was a transformational year for In The Style, during which
we delivered outstanding growth and strategic progress while
remaining true to our mission of empowering our customers to be
brave, embrace body confidence and, most of all, love themselves
for who they are.
Central to our success is our differentiated influencer
collaboration model that creates a strong customer connection,
drives highly efficient customer acquisition marketing metrics, and
gives us exposure to a broad range of customers. We have maintained
very positive trading momentum through the early part of FY22
despite the strong prior year comparatives and continue to progress
well against our strategic objectives, driven in part by new
initiatives including the exceptionally well received Stacey
Solomon collaboration and our nationwide Asda partnership.
I'd like to take this opportunity to thank our partners,
colleagues, and customers as well as both our old and new
shareholders for their support of the In The Style brand. Following
our successful IPO, I believe we are very well positioned to
continue to build on our strong momentum and achieve our
significant growth ambitions."
Enquiries
In The Style Group plc
Jim Sharp, Non-Executive Chairman Via Hudson Sandler
Adam Frisby, CEO
Paul Masters, CFO & COO
Liberum Capital Limited (Nomad
and Broker)
Clayton Bush
Scott Mathieson
Ed Thomas
Miquela Bezuidenhoudt +44 (0)20 3100 2000
Hudson Sandler
Alex Brennan +44 (0)20 7796 4133
Lucy Wollam inthestyle@hudsonsandler.com
Nick Moore
Notes to Editors
In The Style is a fast-growing digital womenswear fashion brand
with an innovative influencer collaboration model.
Founded in 2013 by entrepreneur Adam Frisby, the brand champions
female empowerment, inclusivity, body positivity and real
beauty.
The brand's innovative and highly adaptable influencer
collaboration model, which sees it work with influencers on a
long-term basis to collaboratively design, develop and promote
branded collections, differentiates it from competitors.
In The Style currently partners with a stable of 15 influencers,
including Stacey Solomon, Dani Dyer, Jacqueline Jossa and Billie
Faiers. Together they enjoy a combined global social media reach of
almost 30m followers.
Chairman's Statement
INTRODUCTION
It is with great pleasure that I welcome our new shareholders
within this, In The Style's maiden Annual Results as a public
company. We were delighted with the positive reception to the
Company's IPO on the London Stock Exchange's AIM in March from such
a range of high-quality investors, which is a great testament to In
The Style's differentiated brand, attractive and highly relevant
business model and the many exciting growth opportunities that lie
ahead.
FY21 PERFORMANCE OVERVIEW
FY21 was a step change year for In The Style as the business
continued to accelerate its growth.
Group revenue for the 12 months to 31 March 2021 was GBP44.7m,
an increase of 132% compared to the prior year. Adjusted EBITDA, a
non-GAAP metric used by the Board to provide a meaningful analysis
of trading results, increased to GBP3.8m (FY20: loss of GBP1.1m).
Reported Operating Profit after Adjusting items increased to
GBP0.5m (FY20: loss of GBP1.8m) and the group made a Profit after
Tax of GBP0.6m (FY'20: loss of GBP2.2m). The Adjusting items are
detailed in note 6 and note 30 to the financial statements. This
impressive performance was underpinned by a growing customer base
attracted by the In The Style brand and its relevant values, the
strength of the Group's differentiated influencer collaboration
model and the continued structural shift towards e-commerce in the
clothing market. The Financial Review section provides a more
in-depth analysis of the Group's financial results.
ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG)
In The Style was created with inclusivity and kindness at its
core, and we recognise the brand's responsibility to impact our
customers, colleagues, communities and the environment
positively.
During what was undoubtedly a challenging year for our customers
and communities as a result of the Covid-19 pandemic, the business
demonstrated its values by undertaking a number of initiatives to
support its customers and the wider community. This included
raising more than GBP200,000 for charitable organisations including
Samaritans, Family Action and Age UK through the sale of special
clothing collections such as the hugely successful Be Kind
campaign.
The Board is committed to operating an ethical business and
maintaining a programme of continual improvement across all aspects
of corporate social responsibility ("CSR") in line with its
position as a leading operator within the industry. Monitoring
progress against the Group's CSR objectives is spearheaded by CEO
Adam Frisby and CFO/COO Paul Masters, with updates regularly
communicated to and scrutinised by the Board of Directors.
At In The Style we believe that every worker in our supply chain
should be respected, work in good and safe working conditions and
receive a fair wage. While we do not own any of the factories
making our products, we know it is our responsibility to work with
our suppliers to ensure all products manufactured for our brand are
done so in a safe and ethical way, respecting universal human
rights. To help ensure this, In The Style works with a tight base
of suppliers that are required to sign up to the Group's strict
Code of Conduct and there is a programme of visits in place by In
The Style's team, in line with industry best practice. In addition,
prior to the Company's IPO, the Board commissioned Anthesis, a
leading sustainability consultancy, to conduct an independent
assessment of the Group's CSR and sustainability programme
including a comprehensive programme to audit the Group's supply
chain. The findings and recommended actions have been integrated
into the Group's CSR roadmap.
The Board recognises the importance in upholding high standards
of corporate governance for the benefit of all stakeholders. Having
adopted the QCA Corporate Governance Code at IPO, this will
underpin the Group's ongoing commitment to transparency and
integrity during the next phase of its journey as a public
company.
BOARD OF DIRECTORS
In The Style is led by a talented and ambitious senior team. The
Group was delighted to strengthen its Board of Directors with the
appointments of two skilled Independent Non-Executive Directors at
the IPO, Adam Bellamy and Nancy Cruickshank.
Adam is a highly experienced financial professional, having held
senior financial roles at D&D London, Pure Gym and Atmosphere
Bars & Clubs, and non-executive roles at Loungers and Ten
Entertainment Group. Nancy brings huge experience in data,
technology, and digital businesses, garnered from her career as a
serial tech entrepreneur and most recent role as an Executive
Director at Carlsberg Group leading on its Digital Business
Transformation programme, as well as her non-executive roles at
Allegro, Bango and Flutter.
I would like to thank both Nancy and Adam for their insight and
the valuable contribution they have already made since joining the
Group, and look forward to working with them closely over the
coming years.
OUTLOOK
We are pleased to report a strong maiden performance during what
was undoubtedly a year of unprecedented change and significant
macroeconomic volatility. The Group achieved growth across all
channels, delivered excellent progress against its strategy and
reinforced its foundation for sustainable growth. This performance
is testament to the empowering values and strong ethos that form
the core of the In The Style brand, and their continued relevance
and resonance amongst our core customer demographic.
Since the year end, In The Style has continued to deliver
excellent strategic progress including the very successful launch
of the debut collection of influencer, author and presenter Stacey
Solomon, whose social media following on Instagram totals more than
4.5m, and the launch of In The Style's retail partnership with
ASDA, which has seen the brand featured within more than 100 stores
nationwide.
Sales in the first quarter of the FY22 financial year are 44%
ahead of the prior year, which is especially pleasing given the
strong 'lockdown period' comparatives in the prior year. Both
e-commerce and wholesale channels have performed strongly over the
first quarter of the new financial year with several successful
collection launches from the Group's existing influencers,
including the launch of the debut Stacey Solomon x In The Style
collection.
While uncertainty remains regarding the economy, easing of
social restrictions and the long-term implications of these on
consumer behaviour, we remain confident that, underpinned by its
unique and dynamic model, relevant brand and broad customer appeal,
In The Style is very well-positioned to continue its growth and
create value for all of its stakeholders.
Jim Sharp
Non-Executive Chairman
Chief Executive's Strategic Review
I am very pleased to present In The Style's first Strategic
Review following the Group's successful IPO in March 2021. We
welcome our new shareholders to the business and are pleased to
report that the Group continued to deliver against its growth
priorities during the year whilst staying true to the brand's clear
mission and values.
An authentic, campaigning brand with a differentiated influencer
collaboration approach
In The Style is a fast-growing, digital womenswear fashion brand
that sells on-trend and affordable clothing and accessories. In The
Style is an inclusive brand, for every kind of woman regardless of
her shape or size. We champion female empowerment, body confidence
and real beauty, with each of these values central to our
approaches to brand marketing and product sizing.
In The Style takes an approach to celebrity and social media
influencer collaborations which is differentiated from many other
fashion brands. Rather than simply paying celebrities and social
media influencers to wear and promote our clothes, we work closely
with these partners to design, develop, and launch eponymous
clothing collections. The influencers we work with enjoy royalty
payments based on the profit generated by their collections,
thereby incentivising them to actively promote sales, in turn
driving efficient marketing for the Group.
The Group currently works with more than 15 influencers who
collectively have a combined social media reach of more than 30m.
This gives the In The Style brand broad exposure to a wide range of
highly engaged customers. When appraising potential collaborators,
the Group considers a number of aspects including the social media
influencer's embodiment of the Group's brand values, and their
resonance with the In The Style customer base.
In The Style's products are design-led rather than price-led and
approximately 85% of products are designed by our in-house teams.
We work closely with each influencer to curate product ranges based
on our understanding of the In The Style customer, the influencer's
appeal to specific segments of our customer base, and seasonal
trends. The time from design to going on sale is typically between
eight and ten weeks. In the run up to launch, both In The Style and
its influencer partners build customer anticipation by sharing
teasers and conducting Q&As across social media channels.
Product collections are launched on In The Style's proprietary
app one hour prior to being available on our e-commerce website.
This prompts app downloads which, in turn, provides important
customer data and insight. Due to the preceding promotional
activity, each campaign typically performs very strongly
immediately following launch. This provides the Group with
immediate visibility on most popular products and informs any
subsequent restock.
Focused on building our business responsibly
Our corporate social responsibility (CSR) programme is based on
the desire to operate our business transparently, responsibly and
inclusively. As a brand we are continuously challenging ourselves
to have a positive social impact on all our stakeholders.
We recognise our responsibility to reduce the environmental
impact of our products. Our online business model allows us to
minimise unsold inventory, as we can trial products by ordering
smaller quantities, only repeating orders where they sell well.
Although we offer quick reaction, trend-led styles at affordable
prices, we do not see our clothes as disposable. We want our
customers to get the best out of our products and maximise their
lifecycle. We encourage our customers to look after our clothes,
swap or recycle them. Through our partnership with ReGAIN we are
aiming to change our customers' attitude towards unwanted clothes.
Through this partnership, customers are financially incentivised to
contribute to circular fashion by diverting clothes from landfill
and donating them to charity. We are also continuously looking at
more ways to incorporate more responsible materials into our
collections. Our first recycled collection launched in January
2021. This range of knitwear was made using 100% recycled polyester
yarns. We will be looking to trial more responsible materials
during the rest of 2021.
In The Style is also acutely aware of the responsibility the
Group has for ensuring that the products it sells are manufactured
by an ethical supply chain. We are committed to partnering with
expert organisations, industry groups and other brands to
understand our supply chain risks and to continually improve
standards and working conditions. During the year we provided
Ethical Trading training to all relevant employees and progressed a
process to map all Tier-1 suppliers. We also continued to partner
with The Reassurance Network, an international team of specialists
who work closely with clients to build more sustainable supply
chains, Fast Forward, a next generation labour standard audit and
improvement programme to build resilient supply chains, and
commissioned an independent supply chain audit by Anthesis, a
leading sustainability consultancy, the findings of which have been
integrated into the Group's CSR roadmap.
Business model
The Group operates two key channels to market. The first is its
direct-to-consumer e-commerce channel, which comprises sales
through our fully responsive website (www.inthestyle.com) and
proprietary app.
Launched in 2019, the app has been a key driver of the Group's
increased customer acquisition, engagement, retention, and purchase
frequency over recent periods. During FY21 direct-to-consumer
e-commerce sales represented 81% of total Group sales, with 55% of
direct-to-consumer e-commerce sales generated through the app.
The Group's second channel to market is through its increasing
number of wholesale partnerships. These include digital platforms
such as Lipsy, ASOS, Shop Direct, Studio and, since the year end,
ASDA. During the year, this channel represented 19% of total
sales.
In The Style's growth strategy
The Group has a clear growth strategy for the long-term,
sustainable development of In The Style as a leading digital brand
in the large and growing international female apparel market.
This strategy is built on the following pillars:
-- Increasing our scale and reach through the expansion of our innovative influencer model;
-- Increasing our investment in brand marketing and growing our
relationships with selected digital partners;
-- Continuing to build the In The Style brand by campaigning on
issues that are important to us and our customers; and
-- Pursuing other selected growth opportunities including
international expansion, extension of own brand sales, branching
out into new product categories and potential acquisitions.
In order to deliver this strategy, we will:
-- Invest in our people to support the business's growth in
existing and new markets, categories and channels;
-- Develop and leverage our infrastructure and technology to
improve customer service, retention and conversion;
-- Continue to innovate and leverage the In The Style social
media platform by capitalising on the underlying growth in social
media users and engagement, scaling our social media; collaboration
model, and expanding In The Style's social media reach to benefit
organic marketing; and
-- Continue to focus on building our business responsibly and in
the interests of all stakeholders.
FY21 Business Review
FY21 was a transformational year for In The Style. Alongside the
Group's IPO on the London Stock Exchange in March 2021, the year
was marked by significant progress against the Group's strategy to
develop as a leading women's fashion brand.
During the year, In The Style worked with a range of influencers
to launch product collections covering an increased range of
product categories and targeted at a growing range of customer
demographics. The frequency of new product collection launches
increased significantly representing an average of three to four
per week, an increase from the one to two launches a week in the
prior year.
A dynamic and diverse product offering
Following the onset of the Covid-19 pandemic in March 2020, the
Group demonstrated its agility by quickly diversifying its product
offering to better reflect the needs of its customers. This meant
pivoting away from occasionwear categories and increasing the
availability of more casual categories such as loungewear.
We also successfully expanded into new categories such as
activewear, which was developed and launched in collaboration with
fitness influencer and personal trainer Courtney Black, and
unveiled our first maternity wear collection with existing brand
partner and influencer Dani Dyer. In The Style has since
capitalised further on customer demand for this category through
the launch of maternity collections with reality TV star Georgia
Kousoulou, actress Brooke Vincent, and influencer Elle Darby.
Another notable highlight in the brand's category expansion was
its first foray into nightwear through the launch of a 'his and
hers' Christmas pyjama collection created in collaboration with
Olivia Bowen. For the first time in the Company's history, this
collection included men's products and the positive customer
reception provides useful insights for potential similar
collections in the future.
Following the year end, In The Style has continued to develop
its product proposition, launching a first swimwear collection with
long-time partner Jacqueline Jossa and announcing one of its
largest ever partnerships with author, influencer and presenter
Stacey Solomon. The Stacey Solomon x In The Style collection
launched in April 2021 and represents the brand's most successful
collaboration launch to date.
Corporate Social Responsibility ("CSR")
In The Style is committed to operating responsibly,
transparently and sustainably and during the year the Group created
a new business-wide CSR Committee. Reporting to the Board of
Directors and led by me and CFO/COO Paul Masters, this committee
will drive the Group's progress against its sustainability
agenda.
The brand encourages customers to be kind to themselves and to
each other. In The Style leads by example and we are immensely
proud to have supported a number of causes that are close to the
hearts of our customers and the wider community during the year.
This included raising more than GBP200,000 for our charity
partners, Samaritans, Family Action and Age UK, through the launch
of specific product collections, most notably the second iteration
of our hugely successful Be Kind campaign and the influencer
designed Christmas jumper initiative.
Increased customer acquisition & engagement
New customer acquisition increased 19% year on year,
representing a total of 420,000 new customers in the year.
The Group's primary customer acquisition channel is influencer
marketing through both its partners' social media channels and its
own. In The Style's social media reach on its main Instagram
channel grew by 0.7m during the year to 3m. The risk and reward
profit share model continues to drive a low cost of customer
acquisition.
Route to market - direct to consumer
Sales through the Group's core direct to consumer channel, which
includes the proprietary app as well as the inthestyle.com
e-commerce website, increased significantly by 108% to
GBP36.4m.
The Group achieved strong increases across its KPIs including
website traffic, customer conversion, app downloads and average
order value reflecting the ongoing investments and enhancements
made to the customer experience and journey on our website as well
as the continued growth in popularity of the In The Style app.
In The Style's proprietary app continued to go from strength to
strength during the year. Sales through the app grew more than 400%
to represent 55% of total e-commerce sales. Post the year end, we
were delighted by the success of the launch of Stacey Solomon's
debut eponymous In The Style collection which resulted in our app
reaching the top of the download charts on Apple's app store.
Route to market - digital retail partners & wholesale
Sales through In The Style's wholesale partners grew more than
350% to GBP8.3m. The Group's partnerships, including Lipsy, Shop
Direct and ASOS, continue to support brand awareness and offer
customers increased opportunities to shop our collections and
engage with our brand. We continue to see significant opportunities
for expanding this channel both in the UK and internationally to
support the continued growth of the In The Style brand.
Following the year end, the Group announced and launched an
exciting partnership with ASDA, one of the UK's largest retailers,
to stock In The Style's collections online and in more than 100
ASDA stores nationwide. We are very excited by this partnership
which will increase exposure for the brand, particularly amongst
mums, which is one of our core customer demographics.
New markets
While In The Style currently ships to more than 100 countries,
during the year only 5% of the Group's sales were in international
markets. The Board believes there is the potential to grow this
significantly over the medium term.
Growth in targeted international markets will be approached
through replication of the Group's proven influencer collaboration
model, working with local partners in markets where social media
and e-commerce demonstrate favourable growth dynamics. Similarly,
international routes to market will build on the brand's success in
the UK through utilising the successful In The Style app alongside
carefully selected local wholesale partnerships.
Investing in our platform for long-term growth
The success achieved by the Group during the year was
underpinned by the investments made in developing its proprietary
technology and infrastructure over recent years.
This investment included migrating the business's current
infrastructure from a legacy single application platform to micro
services to enable more efficient tech upgrades and to drive
commercial performance through improved functionality and
reliability; demonstrated post year end with the scaling achieved
to manage the record debut Stacey Solomon launch.
The Group has developed a well-defined roadmap for future
technology upgrades to stay at the forefront of customer
experience, functionality and to provide the potential for future
scalability. During the coming year this will comprise the
migration of final legacy components of the Group's previous
platform, accelerated development of the In The Style app for
international and regional purposes, and the improvement of search
functionality.
Since the year end, we are in the process of negotiating a lease
on a separate office. This move will allow the existing site to be
completely turned over to warehousing to provide capacity while the
Group searches for a larger combined facility.
People and talent
The investment in infrastructure made during the year was
complemented by the strengthening of In The Style's senior team.
This included senior appointments across marketing, CSR and
technology, including the hiring of John Allen to the newly created
position of Chief Digital and Technology Officer.
FY21 has been a transformational year for the Group and I would
like to take the opportunity to wholeheartedly thank everyone
across the business as well as our influencer partners for their
continued commitment and support. Following this milestone year, I
look forward to working with our stakeholders over the coming 12
months to maintain this exciting momentum and drive the business
further towards achieving its significant potential.
Adam Frisby
Founder and Chief Executive Officer
Financial Review
31 March 2021 31 March 2020
Financial KPI's GBP'000 GBP'000 Change
------------------- -------------- -------------- --------
Revenue 44,705 19,303 +132%
Gross Profit 20,589 10,234 +101%
Gross Margin 46.1% 53.0% -696bps
Operating Profit 519 (1,812)
Adjusted EBITDA 3,799 (1,136)
------------------- -------------- -------------- --------
Year on Year Performance
Basis of preparation
The basis of preparation of the financial statements can be
found in note 1. To provide comparability across reporting years,
the results within this Financial Review are presented on an
'underlying' basis. In the current year, total Adjusting Items of
GBP2.3m relate to costs associated with the business's Admission to
the London Stock Exchange's AIM on 15 March 2021 (the "IPO") as
well as one-off bonuses, details can be found in note 4.
Group Overview
While FY21 was a transformative year for In The Style, the
beginning of the financial year coincided with the introduction of
government-imposed restrictions following the onset of Covid-19. As
with many businesses there was significant trading uncertainty at
that time, employees were instructed to work from home where
possible and the business made the decision to take advantage of
government support offered through placing a number of employees on
furlough and the VAT deferral scheme. All furlough monies received
(GBP0.2m) and VAT deferred (GBP0.6m) were repaid prior to the year
end.
During this unprecedented time the business was very quick to
maintain relevance by pivoting its product offering to more casual
clothing collections, in line with consumer demand. The trading
rhythm of the business was also changed in early 2020 as the Group
significantly increased the frequency of new product collection
launches, moving from a typical frequency of up to two collections
per week to consistently releasing between three and four new
collections per week. This approach increased newness and interest
for In The Style customers and helped to increase levels of new
customers and repeat order frequency.
Ensuring relevance through a change in product strategy and the
increased frequency of launches meant that In The Style was well
placed to benefit from the accelerated shift to on-line shopping
over the year, this rapid change and successful execution of
strategy gave rise to specific management and wider employee
bonuses which are included in the Adjusting items noted below.
Revenue for the year increased by 132% to GBP44.7m (FY20:
GBP19.3m), reflecting strong performances across both
direct-to-consumer and wholesale sales channels.
Adjusted EBITDA, a non-GAAP metric used by the Board to provide
a meaningful analysis of trading results, increased to GBP3.8m
(FY20: loss of GBP1.1m). Reported Operating Profit after Adjusting
items increased to GBP0.5m (FY20: loss of GBP1.8m).
The final quarter of the year saw the Group's successful IPO,
raising gross proceeds of GBP11.0m to help fund the continued
growth of the business. Cash at the year-end amounted to GBP11.9m
(FY20: GBP2.0m), with the most significant proportion of this
relating to the funds raised at the IPO.
Revenue
Revenue across the Group's direct-to-consumer e-commerce channel
(comprising sales through the Group's e-commerce website and
proprietary app) performed extremely well, increasing 108% to
GBP36.4m. Headline sales growth was supported by increases in all
of the main e-commerce KPIs including: Traffic (+30%); Conversion
(+27%); and Average Order Value ("AOV") (+10%).
Operational KPI's 31 March 2021 31 March 2020 Change
------------------- -------------- -------------- -------
Visits 46.4m 35.7m +30%
Conversion rate 2.89% 2.27% 62bps
AOV GBP42.85 GBP39.01 +10%
Order Frequency 1.76 1.52 +16%
------------------- -------------- -------------- -------
Significant progress was made during the year in acquiring new
customers. 420,000 customers transacted with the In The Style brand
for the first time, an increase of 19% on the prior year. When
stripping out the very positive customer acquisition impacts of the
exceptionally well-supported Be Kind charity campaign that the
Group first ran in February 2020, in the prior financial year, and
repeated in February 2021, new customer acquisition increased 59%
year on year.
The increased frequency of new product launches and the
continued investment in customer relationship management ("CRM")
activity has ensured that alongside the growth in customer
acquisition, order frequency has also increased.
The In The Style proprietary app continued to go from strength
to strength during the year with 900,000 app downloads. As a
result, sales through the app increased to represent 55% of total
e-commerce sales (FY20: 19%). Alongside significant conversion rate
benefits, the app provides a fantastic platform to communicate with
our most engaged customer group.
Wholesale sales to third-party retailers is an important element
of the In The Style growth strategy. The brand's presence on high
profile digital retail platforms such as ASOS, Shop Direct and
Lipsy provides a profitable revenue stream and access to a broader
customer base, thereby increasing brand awareness. Revenue from
this channel increased by 353% to GBP8.3m (FY20: GBP1.8m).
Following the year end, we were pleased to launch an e-commerce and
retail partnership with ASDA, which the Board believes will help to
further increase brand awareness and customer acquisition.
Gross Margin
Gross Margin reduced 696bps compared to the prior year, impacted
by increased freight costs year on year as a result of the Covid-19
pandemic (c.300 bps), a change in the product mix towards more
casual clothing during the lockdown periods (c.300bps) and a higher
proportion of wholesale sales (c.100bps).
E-commerce Gross Margin during the year decreased 620bps to
52.2% (FY20: 58.4%), also impacted by increases in freight charges
and consumer demand for more casual products during lockdown
periods.
Wholesale Gross Margins significantly improved year on year to
19.1% (FY20: 1.6%), reflecting an increased mix of full price
sales. Whilst wholesale Gross Margins are lower than those of
direct-to-consumer e-commerce sales, management and fulfilment of
wholesale channel orders leverages much of the existing In The
Style team and infrastructure.
Operating Costs
Total Operating Costs including Adjusting items increased 66%
year on year to GBP20.3m. Underlying costs excluding Adjusting
items increased to GBP18.0m (FY20: GBP12.3m). This represents a
significant reduction as a percentage of Revenue from 64% in the
prior year to 40%.
Distribution costs increased to GBP7.4m (FY20: GBP4.2m). This
was due to the increased volume of product sold during the year.
This was in part offset by warehouse efficiencies and lower costs
associated with the distribution of wholesale orders.
Underlying Administration costs excluding Adjusting items
increased to GBP10.6m (FY20: GBP8.1m). Within this, marketing costs
increased by GBP1.8m on the prior year which was predominantly
attributable to sales commissions reflecting the increased number
of influencer range launches, which in turn drove the Group's
strong revenue growth. Sales commissions are an influencer
marketing expense and are therefore included within Administration
costs. Other Administration costs increased by just GBP0.6m,
benefitting from efficiency improvements and the leveraging of the
existing infrastructure that the Group invested in and developed
ahead of the growth curve.
Non-recurring costs (Adjusting items)
During the year, the Group incurred costs relating to the
Group's IPO as well as one-off bonuses. The Board consider these
costs to be material and non-recurring in nature and a breakdown of
these costs are provided in note 6 to the financial statements.
Finance costs
Finance costs of GBP0.4m were incurred during the year. This
predominantly relates to interest on Preference Shares that were
converted to ordinary shares at the IPO.
Taxation
There is no tax due for the financial year due to utilisation of
historic tax losses incurred. A deferred tax asset of GBP0.5m has
been recognised at the year-end reflecting managements view on
expected utilisation of historic tax losses over the coming
year.
Balance Sheet
Net assets increased to GBP11.2m at the year end versus net
liabilities of GBP2.7m at the prior year end. Inventories increased
by GBP1.1m to GBP2.0m and Trade and other receivables increased by
GBP0.8m to GBP1.7m, both balances reflecting the growth in the
business.
Gross proceeds of GBP11.0m were raised at the IPO and borrowings
of GBP3.1m at the prior year end, which reflected the outstanding
Preference share balance under the previous capital structure, were
re-designated as Ordinary shares in the capital re-organisation
prior to the IPO.
Cashflow and cash position
Net cash at the year end amounted to GBP11.9m (FY20: GBP2.0m).
The largest inflow of cash in the year related to the Company's
IPO, which raised gross proceeds of GBP11.0m of growth capital for
the business.
Net cashflow from operating activities was GBP1.1m (FY20:
outflow of GBP0.7m), the variance being almost wholly due to the
increase in profitability. A small increase in working capital of
GBP0.3m arose in the year with increased inventory levels of
GBP1.1m and debtors of GBP0.8m being offset by increases in
payables of GBP1.6m.
Investment in technology and infrastructure continued with
GBP0.4m of capital spend. Dividends of GBP1.25m were paid to
shareholders during the year.
Paul Masters
Chief Financial Officer and Chief Operating Officer
directors Responsibility Statement
The responsibility statement has been prepared in connection
with the Company's full Annual Report and Accounts (the Annual
Report') for the year ended 31 March 2021. Certain parts of the
Annual Report are not included in this announcement, as described
in note 1.
We confirm that to the best of our knowledge:
-- the Group financial statements have been prepared in
accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006, subject to any
material departures disclosed and explained in the financial
statements, and give a true and fair view of the assets,
liabilities, financial position and profit or loss of the
Group.
-- the Annual Report includes a fair review of the development
and performance of the business and the position of the Group and
the Parent Company, together with a description of the principal
risks and uncertainties that they face.
-- the Annual Report and financial statements, taken as a whole,
are fair, balanced and understandable and provide the information
necessary for shareholders to assess the Company's performance,
business model and strategy.
By order of the Board
Paul Masters
Chief Financial Officer and Chief Operating Officer
Group statement of total comprehensive income
For the year ended 31 March 2021
Year Ended Year Ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Revenue 44,705 19,303
Cost of sales (24,116) (9,069)
----------- -----------
Gross profit 20,589 10,234
Distribution costs (7,428) (4,189)
Administration expenses (12,919) (8,081)
Other operating income 277 224
----------- -----------
Operating profit/(loss) 519 (1,812)
Adjusted EBITDA(1) 3,799 (1,136)
Depreciation (360) (272)
Amortisation (574) (404)
Adjusting items (2,346) -
Operating profit/(loss) 519 (1,812)
Finance income 1 3
Finance costs (395) (348)
----------- -----------
Profit/(loss) before taxation 125 (2,157)
Income tax 500 -
----------- -----------
Profit/(loss) and total comprehensive
income/(loss) for the year 625 (2,157)
Profit/(loss) per share -
basic and diluted - -
----------- -----------
Note 1: Adjusted EBITDA, which is defined as profit before net
finance costs, tax, depreciation, amortisation and adjusting items,
is a non-GAAP metric used by management and is not an IFRS
disclosure. Adjusting items are items which are material and
non-recurring in nature as disclosed in note 4. Adjusted EBITDA is
consistent with the way financial performance is measured by
management and reported to the Board and assists in providing a
meaningful analysis of trading results.
All results derive from continuing operations.
Profit/(loss) and total comprehensive profit/(loss) is
attributable to equity holders of the Company.
Group statement of financial position
As at 31 March 2021
As at As at
31 March 31 March
2021 2020
GBP'000 GBP'000
Non-current assets
Intangible assets 1,125 1,374
Property, plant and equipment 272 303
Right of use assets 292 303
Deferred tax asset 500 -
Total non-current assets 2,189 1,980
---------- ----------
Current assets
Inventories 1,955 852
Trade and other receivables 1,746 920
Cash and cash equivalents 11,939 2,047
---------- ----------
Total current assets 15,640 3,819
---------- ----------
Total assets 17,829 5,799
---------- ----------
Liabilities
Current liabilities
Lease liability 164 137
Trade and other payables 6,201 5,018
Total current liabilities 6,365 5,155
---------- ----------
Non-current liabilities
Borrowings - 3,098
Lease liability 281 223
Total non-current liabilities 281 3,321
---------- ----------
Total liabilities 6,646 8,476
Net assets/(liabilities) 11,183 (2,677)
========== ==========
Equity
Share capital 131 15
Share premium 10,942 4,914
Merger reserve (58) -
Retained earnings/(accumulated
losses) 168 (7,606)
Total equity/(deficit) 11,183 (2,677)
========== ==========
Group statement of changes in equity
For the year ended 31 March 2021
Share Capital Share Premium Merger reserve Retained Total
earnings (deficit)/equity
/ (accumulated
losses)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(5,449
As at 1 April 2019 15 4,914 - ) (520)
-------------- -------------- --------------- ---------------- ------------------
Loss for the year - - - (2,157) (2,157)
Total comprehensive
loss for the year - - - (2,157) (2,157)
-------------- -------------- --------------- ---------------- ------------------
As at 31 March 2020 15 4,914 - (7,606) (2,677)
-------------- -------------- --------------- ---------------- ------------------
Profit for the year - - - 625 625
Total comprehensive
income for the year - - - 625 625
-------------- -------------- --------------- ---------------- ------------------
Transactions with
shareholders:
Dividend - - - (1,250) (1,250)
Share reorganisation
- preference share
redesignation as equity
and cancellation of
share premium - - - 3,470 3,470
Share capital reduction (15) (4,914) - 4,929 -
Issued on incorporation 59 - - - 59
Group reorganisation 58 - (58) - -
Share issue on IPO 14 10,986 - - 11,000
IPO costs - (44) - - (44)
-------------- -------------- --------------- ---------------- ------------------
Total transactions
with shareholders 116 6,028 (58) 7,149 13,235
-------------- -------------- --------------- ---------------- ------------------
As at 31 March 2021 131 10,942 (58) 168 11,183
-------------- -------------- --------------- ---------------- ------------------
Group cash flow statement
For the year ended 31 March 2021
Year Ended Year Ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Net cash flow from operating activities
Profit/(loss) for the year 625 (2,157)
Adjustments for:
Amortisation of intangible assets 574 404
Depreciation of property, plant
and equipment 360 272
Loss on disposal of property,
plant and equipment - (1)
Finance income (1) (3)
Finance costs 395 348
Income tax expense (500) -
Working capital adjustments
(Increase)/decrease in inventories (1,103) 111
Increase in trade and other receivables (771) (611)
Increase in trade and other payables 1,550 948
Taxation paid - -
----------- -----------
Net cash from/(used in) operations 1,129 (689)
----------- -----------
Cash flows generated from/(used
in) investing activities
Purchase of intangible assets (325) (616)
Purchase of property, plant and
equipment (89) (65)
Proceeds from sale of property,
plant and equipment - 1
Interest received 1 3
Net cash generated from/(used
in) investing activities (413) (677)
----------- -----------
Cash flows from financing activities
Issue of ordinary shares 11,000 -
Costs incurred on IPO charged
to Share Premium (44) -
(Repayment of)/receipt from invoice
discounting facility (365) 312
Dividend paid (1,250) -
Interest paid on lease liabilities (19) (16)
Repayment of lease liabilities (146) (132)
----------- -----------
Net cash from financing activities 9,176 164
----------- -----------
Net increase/(decrease) in cash
and cash equivalents 9,892 (1,202)
Cash and cash equivalents brought
forward 2,047 3,249
Cash and cash equivalents carried
forward 11,939 2,047
=========== ===========
Notes
1. Basis of Preparation
The preliminary financial information does not constitute
statutory accounts for the financial years ended 31 March 2021 and
31 March 2020 but has been derived from those accounts.
Statutory accounts for the financial year ended 31 March 2021
will be delivered following the Company's Annual General Meeting.
The auditors have reported on those accounts and their report was
unqualified, did not draw attention to any matters by way of
emphasis, and did not contain a statement under 498(2) or 498(3) of
the Companies Act 2006.
2. Going concern
Management have assessed the likely impact of coronavirus on the
Group based on the latest available financial and non-financial
information and government guidance. This assessment has looked at
the likely duration of the crisis as well as the sales that could
be expected to be generated through each channel during an extended
lockdown period, both at a national and local level.
The business has not experienced any significant disruption from
employee absence, supply chain or distribution networks and none is
anticipated for the foreseeable future.
During this period of uncertainty, the Directors have taken
steps to mitigate the effect of coronavirus. Focus has been on
adapting to change in consumer demand, cost reduction and
efficiency, working capital reduction and staff retention. The
Government has demonstrated its commitment to the economy and the
Group has taken advantage of Government support available, namely
the furlough scheme and deferrals of VAT payments. All amounts
received under the furlough scheme and VAT deferral scheme were
repaid in full by the year end.
At the current time, the Group is trading well against forecasts
driven by the growth in its online market share. Whilst an element
of uncertainty remains around the future effect of the COVID-19,
the period of strong trading since the outset of the pandemic and
the Group's ability to quickly react to changing consumer demands
means the Directors do not consider the COVID-19 pandemic to be a
significant future risk to trading performance. Stress testing has
been conducted and considered, taking into account the potential
economic impact on consumers in the long term.
The working capital impact of an increasing wholesale element of
the business has been mitigated to a large degree by an invoice
discounting facility. This facility runs through to November 2021
and at that point the directors will determine whether to extend
the facility or not based on future requirements. Based on current
cash projections, the Group does not require this facility to
operate as a going concern.
3. Segmental analysis
The Chief Operating Decision Maker ("CODM") has been identified
as the Board of Directors. The Board reviews internal reporting in
order to assess performance and allocate resources. The Board has
determined that there are two operating segments, being wholesale
and e-commerce clothing retailing.
In view of the growth in wholesale revenue in the year ended 31
March 2021, the CODM are now monitoring the two operating segments
separately.
Revenue Gross Profit
Year Ended Year Ended Year Ended Year Ended
31 March 31 March 31 March 31 March
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Wholesale 8,331 1,837 1,594 29
E-commerce 36,374 17,466 18,995 10,205
---------------- ---------------- ---------------- ----------------
44,705 19,303 20,589 10,234
================ ================ ================ ================
There are no sales between the two operating segments, and all
revenue is earned from external customers. The operating segments
gross profit is reconciled to profit before taxation as per the
statement of total comprehensive income.
The Group's overheads are managed centrally by the Board and
consequently there is no reconciliation to profit before tax at a
segmental level.
The Group's assets are managed centrally by the Board and
consequently there is no reconciliation between the Group's assets
per the statement of financial position and the segment assets.
4. Adjusting non-recuring items
Year Ended Year Ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Administration expenses 2,346 -
2,346 -
================ ================
To understand the underlying performance of the business,
certain costs included within administrative costs have been
classified as adjusting items on the basis of their size and their
nature of being non-recurring.
These items principally relate to legal and professional fees
relating to the IPO of GBP1,638,000 and bonuses of GBP708,000.
Ensuring relevance through a change in product strategy and the
increased frequency of launches meant that the Group was well
placed to benefit from the accelerated shift to on-line shopping
over the year, this rapid change and successful execution of
strategy gave rise to specific management and wider employee
bonuses which are included in the Adjusting items noted above.
5. Dividends
On 14 October 2020, the company undertook a reduction of capital
by way of a solvency statement under section 643 of the Companies
Act 2006 for the purposes of section 642 of the Companies Act 2006.
This included the cancellation of GBP4,914,000 from the share
premium which resulted in an increase in retained earnings of
GBP4,914,000.
A dividend of GBP1,250,000 was subsequently declared and paid in
December 2020.
On 5 March 2021, the company undertook a further reduction of
capital by way of a solvency statement under section 643 of the
Companies Act 2006 for the purposes of section 642 of the Companies
Act 2006. This included the cancellation of all amounts standing to
the credit of the share premium account (being an amount equal to
the share premium created on the issue the C preference shares) and
the crediting of the resulting amount to the distributable reserves
of the company. Following this, the company released its
shareholders from any liability they may have to repay any amount
of the dividend received by them from the company in December 2020,
which was required as a subsequent reassessment identified that
there was insufficient retained earnings at the point of paying the
dividend.
6. Profit/(loss) per share
Basic profit/(loss) per share is calculated by dividing the net
profit/(loss) for the year attributable to ordinary equity holders
after tax by the weighted average number of ordinary shares
outstanding during the year.
Diluted profit/(loss) per share is not calculated as there are
no potential dilutive instruments in issue.
The basic and diluted calculations are both based on the
following:
Year Ended Year Ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Profit/(loss) for the year after tax 625 (2,157)
================= =================
No. ('000) No. ('000)
Weighted average number of shares - basic 140,794,593 152,920,011
================= =================
Earnings/(loss) per share - basic and diluted - -
================= =================
Annual Report
T he annual report will be mailed to shareholders and made
available on our website on or around 30(th) August 2021. Copies
will be available after that date from: The Secretary, In The Style
Group plc, Unit 5 Olympic Court, Salford M50 2QP
Cautionary Statement
This Preliminary Report has been prepared solely to provide
additional information to shareholders to assess the Group's
strategies and the potential for those strategies to succeed. The
Preliminary Report should not be relied on by any other party or
for any other purpose.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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END
FR DKOBPPBKKFOB
(END) Dow Jones Newswires
July 27, 2021 02:02 ET (06:02 GMT)
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