19th Jul 2022 18:23
(Alliance News) - Made.com Group PLC on Tuesday lowered its outlook as the country grapples with a cost-of-living crisis, sacrificing custom-made furniture purchases to keep cash for everyday essentials.
Made shares closed down 46% at 20.80 pence on Tuesday. The stock is down 90% from its June 2021 initial public offering price of 200p.
Gross sales in the first half of 2022 were 19% lower year-on-year, though up 55% from pre-virus levels.
Continental Europe performed stronger than the UK, posting a 67% growth against the first half of 2019, while UK sales grew 45%.
"Recent trading has been volatile, and the worsening of consumer confidence has impacted demand for discretionary big-ticket items, making new customer acquisition at financially attractive rates challenging," the London-based sofa seller cautioned.
Made also said it is "considering options to allow us to strengthen the balance sheet sufficiently to navigate what will undoubtedly continue to be challenging conditions".
For 2022, Made now expects gross sales to fall by between 15% to 30%. It had previously expected an outcome ranging from flat sales to a 15% fall.
Revenue guidance has been lowered to a range of a 9% fall to a 24% fall from between 8% growth and a 7% decline previously.
"Faced with the prospect of an economic downturn and a rising cost of living, consumers will naturally take a hard look at their spending. Any 'nice to have, but not vital' items will get put to the back of the priority list and a chunk of the population will ultimately conclude they only have enough money for essentials," said AJ Bell's Danni Hewson.
"It seems Made.com's life as a listed company was doomed from the start. Its IPO was priced at the bottom of its range when the retailer listed on the London Stock Exchange in June 2021 at 200p per share. Now they trade [90% lower] suggesting this is one of the biggest UK IPO flops in years," Hewson added.
By Arvind Bhunjun; [email protected]
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