Hobbycraft profits rise after laying foundations for growth

• EBITDA surges 25.9% to £6.8m
• Turnover up 8.9% to £141.1m
• Says it has laid the foundations to scale the business over the next five years

The retailer said that after investing in supply chain and ecommerce, it has laid the foundations for further, more profitable growth.

Hobbycraft EBITDA surged 25.9% to £6.8m in the 52 weeks to February 22.

Turnover was up 8.9% to £141.1m and the retailer said like-for-likes increased in stores, but did not give a figure.

Hobbycraft said trading has been “strong” since year end. It said its CRM programme, value strategy and investment in service are paying off, resulting in more customers and higher spend per shopper.

The retailer said it benefitted from a new £3m distribution centre opened two years ago as well as “supply chain and value initiatives” to keep prices down.

It said it has now “laid the foundations for scaling the business across channels over the next five years”.

Ecommerce sales increased 142% in the year and now represent 5.2% of overall sales following the launch of its new mobile-optimised website. Hobbycraft said the website is now delivering “strong profit per order on the back of an increase in overall orders”.

Multichannel growth

Hobbycraft chief executive Catriona Marshall said:  “Our business transformation programme is now paying off.

“The creation of a new distribution and supply chain alongside an expanding store network and a strong online trading platform, are driving strong growth.

“As the market leader, we are increasingly focused on delivering great value, reducing prices, and progressing to a direct marketing platform.

“We are now positioned to exploit our buying scale and delivery efficiencies and expect delivery and fulfilment costs to reduce”

Catriona Marshall, Hobbycraft

“From this strong foundation, we expect Hobbycraft to develop into a more balanced multichannel retailer.

“Having opened the largest integrated online and stores craft product distribution centre in the UK two years ago, we are now positioned to exploit our buying scale and delivery efficiencies and expect central delivery and fulfilment costs to reduce given the initial commissioning period is over.

“Our substantial programme of consolidation, repositioning and infrastructure investment is now established and we are on track to achieve further significant growth in sales, market share and EBITDA.”

The 81-store retailer has signed up 1 million members to its Hobbycraft Club scheme.

The retailer said it has noted “strong” consumer sentiment and that its customers are “definitely in experimental mood and trying new things”. Trends include colouring books for adults.

The retailer unveiled stores in Aintree, Bedford and Yeovil in the year and plans further openings in Borehamwood and Greenwich.