25th Mar 2024

H1 Results: Improved Financial Metrics

The first six months of the financial year delivered growth in contribution across our Invest and Nurture portfolio, although trading was significantly impacted by challenges faced by the self-tan category.

We rationalised the Group’s portfolio and exited several underperforming & unprofitable brands, thereby releasing working capital and providing greater focus on a smaller problem-solving, margin accretive brand portfolio.

We reduced our losses by £600k and saw an improvement in gross profit percentage and brand contribution.

Business Highlights:

  • Super Facialist H1 net sales were up 42%, driven by the launch of 14 SKUs into 580 Holland & Barrett stores. H2 looks positive with the launch of the new Vegan Collagen line, which blends a potent Marine Bio-Polymer made from sustainably sourced Red Algae and Hyaluronic Acid, with plant-derived Vegan Collagen sourced from the sap of the acacia tree; the roll-in of the New Sleep Smart Night Moisturisers featuring the “World first” Resync SleepSmart ™ Complex technology; Q3’s Vitamin C Digital campaign and the roll out of the new design upgrade in Q4.
  • In response to market trends and consumers’ switch to more affordable gradual tanners, the new Skinny Tan Body Glow launched in Asda in December and will launch in Boots, Superdrug and Tesco in Q3.
  • Boots International has also confirmed launch of Skinny Tan as a Boots exclusive in 144 stores across six Gulf countries in Q3.
  • Dirty Works contribution increased by 33%, driven by the Q2 roll out to over 500 Watsons stores in 9 countries, with very encouraging sell out results in Thailand, Turkey, Malaysia, the Gulf, Singapore and Hong Kong. Encouraging discussions are in play with Watsons to launch into Taiwan and Indonesia in Q3.
  • The Solution’s net sales for H1 were up 95% driven by the Bodycare launch into Waitrose and an increase in demand on Amazon.

Financial Highlights:

  • Revenue for the period of £8.7m, a £1.9m decrease on the prior year half year results, driven by a softening in the self-tan category and a reduction in discontinued brand sales.
  • Gross Profit margins increased by +1ppts to 40%. Notable improvements on Dirty Works +9ppts and Super Facialist +3ppts.
  • Brand contribution has increased by +5ppts YTD.
  • Underlying operating loss of £0.2m (H1 2023: £0.8m), which is a reduction in the underlying operating loss of +£0.6m, due to successful implementation of planned Opex synergy savings.
  • £1.2m reduction in stock holding versus the H1 FY23 position, given depletion in inventory on Divest and Discontinued brands.

Quentin Higham, CEO, comments:

“We continue to work closely with our offline partners and I am pleased to see some notable distribution gains on our key Invest and Nurture brands. The focus for our DTC channels has been on improving profitability and ROAS. We have significantly reduced the running costs of the sites, by bringing external agency costs in house and continue to monitor Advertising & Promotional investment. Over the next 12 months we have a strong brand development program in place, with a number of exciting product launches, brand redesigns; brand extensions and the notable relaunch of Skinny Tan as Skin & Tan in 2025.

Against the backdrop of a challenging market our strategy of brand rationalisation, portfolio focus and rigorous cost control is beginning to realise the medium term strategic and financial aims of the Group. Progress has been made in reducing losses, but whilst current trading conditions remain, organic sales growth will continue to be difficult. The immediate priorities are, driving brand awareness of our Invest brands, delivering revenue synergies through domestic and international expansion, and releasing working capital. We expect to see a full year revenue decline, but are making progress in reducing operating losses whilst remaining confident that the foundations we are building, will enable us to achieve our medium and long-term goals.”

Dirty works thailand store