Wiggle posts pre-tax loss of £132.5 million

Accounts detailing the Mapil Topco business (better known as the parent to Wiggle CRC) have shown a pre-tax loss of £132.5 million last year.

Now led by former Debenhams director Ross Clemmow, sales at the group rose 15% to £453,090,000 and the business did post underlying profits of £14.2 million, but that was not enough to guarantee profits. Heavy writedowns on the value of assets and interest payments to Bridgepoint impacted negatively to the tune of £106.4 million and £28.7 million, respectively. The figures represent the trading period of the 52 weeks to December 30th 2018.

In a bid to improve its cash flow, Wiggle did make the move in September to sell Bike 24 back to its previous owner The Riverside Company for an undisclosed sum. The company only originally acquired the German e-Tail asset in 2017. For the benefit of the report, Bike24’s perhaps short-lived input to the business is included in the summary.

Over the past year the business has been making sustained efforts to streamline the Wiggle and Chain Reaction businesses, moving both to a single ERP IT platform that will share a common product pool. This will see the beginning of a project to “migrate the CRC website onto the same platform as the Wiggle website.”

When asked to clarify this point, Wiggle CRC marketing contact Gary Wells told CI.N: “Both the CRC and Wiggle sites are continuing as separate retail brands, each serving their own unique customer base.”

Distribution of the firm’s goods has steadily been consolidated from five sites to two. In the process the carried inventory has been reduced by 3%, something that the business expects will begin to show benefits in financials attached to 2019.

The director’s report concludes: “The directors believe that the most appropriate measure of the company’s profitability is EBITDA and this, along with revenue, is a key performance indicator in business.

“For the current year, EBITDA was a profit of £12,017,000 (2017: £152,000) before taking account of non-recurring costs. Loss before tax was £132,465,000 (2017: £39,522,000) driven principally by the non-cash one off impairment of goodwill along with significant non-cash interest and depreciation costs. The underlying trading perforance of the business has improved year on year and is expected to continue to do so in 2019 and beyond.

“The group has net liabilities of £123,778,000 (2017: net assets £4,894,000).”

The group is now expected to make more of its own-brand product portfolio, as well as its most successful third-party premium brands.

To view the statement, head here.