Bridgepoint has undertaken a write down on its Wiggle asset, taking £34.8 million off its valuation of the business, according to recently filed accounts.
These reports reveal that Bridgepoint wrote down the value of Wiggle’s holding company to £138.4 million last year, a sum worth nearly half of the £73 million it paid for rival Chain Reaction Cycles.
Write downs, or reducing the ‘book value’ of an asset is often undertaken because it is deemed to be overvalued compared to market value. Such a thing lowers net income and can thus reduce a firm’s tax burden.
Having completed the deal on July 7th following regulatory approval, the online retail giant has now completed a consolidation of warehousing into one Wolverhampton unit. As part of the merging the business has undertaken a comprehensive upgrade of its systems, implementing a ERP cloud-based system to manage its orders.
The latest figures show a revenue growth of 7.9%, with volumes ahead by 16%. This growth, says the report, was achieved against what at the time was strong GBP exchange rates. In the financial year 2015/16, some 43% of sales stemmed from currencies other than sterling.
Revenue for the 48-week period ending January 3rd 2016 was £178.1 million, compared to the prior 52-week period’s earnings of £178.8 ended February 1st 2015.
The accounts also reveal that the online giant’s UK business is in the ascendancy, with £100,852,000 in turnover generated in the 48 weeks ended January 3rd 2016, up from £96,778,000 in the prior years accounts. Elsewhere the business posted a small decline in trade in both Europe and rest of world.