Following a significant period of restructuring its operations Planet X has boosted its profitability, booking a 64% uptick year-on-year.
As part of the reshuffle of its operations turnover has dipped from £20 to £15 million, with chief executive Dave Loughran fine-tuning the business to focus on its most profitable areas. Profits before tax rose from £1.1 million to £1.8 million.
As an aside to the trading update it was also revealed that the management team have opted to invest in the Holdsworth brand, which will soon be relaunched. Last month the Holdsworth Pro Cycling Team competed in the Tour De Yorkshire led by former Team Sky rider Russ Downing.
Loughran said: “Our strategy to focus upon great quality at sensible prices really resonates with an ever-savvy customer base. We are very excited with the growth opportunities of the business as we resurrect some iconic cycling brands.”
The overhaul of the business has been undertaken alongside Trevor Parker, the chairman of strategy execution at NorthCo Management, who adds: “Planet X’s profit margins are a real indicator of how the business has responded to our operational restructuring programme.
“Our focus has been on simplifying Plant X’s business model in order to create a robust direct to consumer distribution platform, placing Planet X in prime position to take advantage of market opportunities as they arise. The adage of turnover is vanity, profit is sanity and cash is king is very fitting. Turnover has been sacrificed for an impressive rise in profit.
“In addition, the impact of our continued work at Planet X on the balance sheet over the year has seen us pay down debt of £2.8m so that we are now debt free and despite significant dividends being paid, cash reserves have improved by over £400k to £1.7m.”
Sales of the firm’s 10,000 bike annual output remain primarily online with 60 staff working on the business’s day-to-day operations.