Pandemic still affecting Brand Architekts as results suffer

By

Nigel TAYLOR

Published
Nov 8, 2022

It’s turned out to be “one of the most turbulent and testing” years for Brand Architekts Group. And the beauty and personal care products supplier said the ongoing impact of Covid-19 was still affecting “buying patterns, freight costs, labour inflation and therefore margin”.

But there was some good news in its results statement for the year to 30 June as the business said it “made good progress” in several key areas. But that progress wasn’t enough to add to add any shine to the finances.

Revenue for the year fell 10% to £14.3 million as the group “navigated the challenging external environment and the impact of reduced consumer confidence on demand”.

Excluding acquisitions, organic sales fell 15% on the prior year. The underlying gross profit margin “was significantly impacted” declining to 33.5% from 36.9% a year ago. It said this reflected a wide range of cost pressures felt throughout its supply chain, that it could not pass on to retailers due to previously agreed pricing commitments.

Then there was an underlying operating loss of £1.8 million to add in, up £0.3 million. However, the group said it also retains a net cash position of £11.3 million at year end.

And the progress made? It included transitioning the business strategy to a focus on profitability and its Invest & Nurture brands; successfully relaunching seven key brands last autumn; relaunching Root Perfect, which resulted in strong distribution gains in 300+ Normal stores across Europe and Morrisons UK; increased international sales driven by Dirty Works distribution gains in Peru, Chile and the US; continued UK distribution gains for Super Facialist in Tesco, Morrisons and Look Fantastic outlets; and the completion of the Innovaderma purchase in May with its subsequent integration of brands and team on track.

CEO Quentin Higham said it “has faced unprecedented challenges as a result and we have had to show agility in order to continue to deliver for our customers.

“The acquisition of Innovaderma was a significant milestone for the group. We now have an improved portfolio of core brands that we can scale, as well as realising the benefits of a number of cost synergies. We are focused on successfully delivering our integration plan, growing our international presence and implementing strategies that focus on profitability, whilst capitalising on the group's new online presence, as well as its retailer customer base.”