Wiggle sales rise but profits punctured by currency headwinds

The tri-sports firm, now known as Wiggle CRC after acquiring online rival Chain Reaction Cycles in July, said group sales increased 7.5% on a reported basis to £178.3m in the 48 weeks to January 3, 2016. On a constant currency basis sales rose 11.6%.  

UK sales rose 11.5%. Volumes on a group basis rose 16%, accounts filed at Companies House revealed.

Wiggle chief executive Stefan Barden said it continued to win market share in its “core” UK market, which represents around half of group revenues.

Barden said this was done by giving customers brands at the “keenest” prices.

Wiggle’s mainstream UK rivals Halfords and Evans have endured a bumpy ride in the past year as unpredictable weather and a softer market has hampered performance in the cycling space.

Operating profits at Wiggle slid from £5.4m in the prior year to £0.7m as it was hampered by currency movements. On a constant currency basis profits were £2.9m.

However the previous year’s figures was based on 52 weeks of trading as Wiggle has adjusted its reporting period to fall in line with Chain Reaction.

’Substantial investments’

The etailer, owned by private equity group Bridgepoint, said it made “substantial investments” to maintain its position as the “lowest cost operator” in markets in 2015. This included spending £15.2m on a new distribution centre in Wolverhampton and new systems.

European sales were flat on a reported basis, but up 9.8% on a constant currency basis. Sales outside of Europe rose 4.8%. The group operates in 72 countries, having cut down its global reach.

The accounts revealed that Wiggle paid £73m for Northern Ireland-based Chain Reaction, which will double Wiggle’s annual revenues.

Barden said sales in 2016 have been “strong” and have accelerated since the EU referendum as sterling has weakened. Profits and sales are expected to be up in the current financial year.