REG - Huddled Group PLC - Trading Update

HuddledAnnouncement

08/01/2024 07:00

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RNS Number : 8692Y  Huddled Group PLC  08 January 2024

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK version of the EU
Market Abuse Regulation (2014/596) which is part of UK law by virtue of the
European Union (Withdrawal) Act 2018, as amended and supplemented from time to
time.

 

8 January 2024

 

 

Huddled Group plc

("Huddled", the "Company" or the "Group")

 

Trading Update

 

Huddled Group plc, focused on building a portfolio of e-commerce brands, is
pleased to report an update on unaudited trading results for the year ending
31 December 2023 ("FY 2023"), along with an update on the Group's recent
acquisition of Discount Dragon and Q4 2023 trading headline numbers.

 

 

FY 2023 highlights

 

·      Revenue from continuing operations (constituting Discount Dragon
and Let's Explore) of £2.2m

·      Net cash of £4.2m as at 31 December 2023

·     Further cash of $1.25m due to be received in February 2024 from
the settlement of the loan note by the buyer of the Immotion Location Based
Entertainment VR business

·      Profit of £15.1m on disposal of the LBE and Uvisan divisions

·     Share buyback programme returned £11.5m to shareholders during
the year (net of share option exercise proceeds of £1.2m)

 

The Group's revenue from continuing operations in the year was £2.2m with
almost all of this falling in the last quarter of the year during which the
acquisition of Discount Dragon was completed and the Let's Explore division
entered its peak trading period.

 

The Group ended the year with £4.2m cash following significant investment in
stock, completion of the October off-market buybacks and outflows of circa
£1.1m in relation to the Discount Dragon acquisition (repayment of loans and
payment of advisors' fees associated with the acquisition).

 

Divisional updates

 

Discount Dragon

 

Since completion of the acquisition of Discount Dragon on 17 October 2023 the
business has continued to grow strongly.

 

·      Post-acquisition revenue of £1.5m (17 October - 31 December
2023)

·      Q4 revenue increased 37.3% to £1.8m (Q3: £1.3m)

·      Q4 orders placed increased 18.3% to 48.5k (Q3: 41.0k)

·      Q4 Average order value (AOV) increased 15.9% to £35.96 (Q3:
£31.03)

 

The early performance of Discount Dragon has exceeded management's
expectations. Our early significant cash investment in additional stock,
including the Motatos stock acquisition, has powered Q4 trading, as well as
underpinning our intent to expand the breadth and depth of the product range.

 

The period ahead is about investing for growth, with a number of initiatives
planned to support the continued growth in our key metrics and drive
efficiency - these include:

 

·    Customer acquisition: Marketing campaigns to drive higher levels of
new customer acquisition across multiple channels.

·    Warehouse facilities: New warehouse facilities are being explored to
drive efficiency and process. In the meantime, we are confident that the
current facility has the capacity to process circa 30,000 orders per month.

·    Stock: Continued investment in stock and broadening of the Group's
supplier relationships to enable us to extend both the depth and breadth of
SKU's offered to customers.

 

We are very pleased with the acquisition and excited by the growth potential
of this business, and whilst there is much work to be done, we believe we are
in a sub-sector of the grocery market where demand has never been stronger.

 

Let's Explore

 

·      FY 2023 revenue £0.7m

·      Circa 30,000 Vodiac units sold in 2023

·      Over 7,000 Let's Explore units sold in Q4 2023

 

Sales of the now established Vodiac product have been encouraging with circa
30,000 headsets sold during the year via its distributor. Sales have been
generated mainly via TV shopping channels, including QVC in UK and USA, TSC in
Canada and TVSN in Australia.

 

Our new Let's Explore range has been well received, the move to immersive
learning has definitely hit a chord with parents and children, underpinning
our belief in the revised product range. Whilst it took longer than expected
to reposition our advertising message, by mid-November this was in flow and
demand for the products both in the UK and USA was strong. In Q4 we sold just
over 7,000 units predominantly through Amazon. We plan to take these learnings
into the retail space and make the range an 'all year round' offering based
around immersive learning. We have sufficient stock, of circa 15,000 units to
ensure continuity of supply to both Amazon and direct to consumer. In
addition, we are in the process of appointing a distributor for this product
range to enable us to extend our offering into the retail space.

 

Martin Higginson - CEO Huddled Group plc said:

 

"The recent acquisition of Discount Dragon has been an exciting addition to
the Group. The current consumer environment is delivering record trading in
the discount sector, and we feel that being able to offer great products,
including many of the biggest brands, delivered to the customer's door, at
significantly discounted prices is a compelling proposition.

 

"The Let's Explore business continues to progress and we believe that with
modest investment we can create a profitable business in the immersive
learning space. This is something we believe can, in the foreseeable future,
deliver solid returns for the Group.

 

We have a solid balance sheet and we will invest throughout the year ahead to
drive growth across our businesses. We look forward to updating the market on
our progress."

 

Enquiries:

For further information please visit www.huddled.com/investors
(http://www.huddled.com/investors) , or contact:

 Huddled Group plc                             Martin Higginson        investors@huddled.com

                                               David Marks

                                               Daniel Wortley

 Cavendish Capital Markets Limited             Adrian Hadden           Tel + 44 (0) 207 7220 0500

 (Nomad and Sole Broker)                       Charlie Combe

                                               Dan Hodkinson

 Alma Strategic Communications (Financial PR)  Rebecca Sanders-Hewett  huddled@almastrategic.com (mailto:huddled@almastrategic.com)

                                               Sam Modlin

                                               Kieran Breheny

 

 

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