REG - Huddled Group PLC - Trading Update

HuddledAnnouncement

29/07/2024 07:00

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RNS Number : 1093Y  Huddled Group PLC  29 July 2024

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Huddled Group plc

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

Trading Update

Huddled Group plc (AIM:HUD), the circular economy e-commerce business, is
pleased to provide an update on its unaudited Q2 2024 trading, along with a
progress update on the performance of the Group's businesses.

Overview

Having invested heavily in the Group's core foundation pillars of stock,
customer acquisition and fulfilment we are starting to see returns on our
investment. The Group expects to report H1 2024 revenue of no less than
£5.2m. Trading in the second quarter of 2024 saw solid progress delivering
£3.1m of revenue for the period, an increase of circa 46% vs Q1 2024.

Group

At the end of June 2024, we had circa £3.3m of cash in the business, plus
approximately £1.3m in stock. Whilst we expect cash to reduce further as we
continue to invest in scaling our acquisition marketing along with the
expansion of our fulfilment capacity, we believe these investments will
continue to deliver results and move the operating divisions into monthly
profitability by the end of the year.

As previously announced, we had identified new warehouse premises, although
following discussions with our current landlord we have agreed in principle
additional space at our current warehouse with effect from January 2025,
doubling our existing capacity. This will not only allow us to avoid the
disruption to operations which a full move would have entailed but will result
in substantially lower capital expenditure and occupancy costs.  The
additional capacity will allow us to fulfil orders for both Food Circle
Supermarket and Boop Beauty from the same fulfilment centre, helping deliver
further synergies and cost savings, as well as allowing us to increase the
quantity of orders we can process for Discount Dragon. We have recently moved
to three shifts during weekdays and two shifts at weekends allowing us to
process circa 36,000-40,000 parcels per month, this will, we believe, scale
further when the additional space comes on board.

We are excited as to the growth potential of Group and believe our model and
strategy will, in time, create a sizeable and profitable business. We believe
we have demonstrated there is demand for big brand products at value, along
with a growing recognition of the environmental impact of surplus consumer
goods going to waste. With our broad offering of products, we can see the
uptake to purchase is not only reassuring but also recurring due to the nature
of our consumable product mix.

Discount Dragon

·    Q2 2024 revenue was £2.77m an increase of 29.9% from the prior
quarter (Q1 2024: £2.13m)

·    Revenue in June 2024 broke through the £1m barrier for the first
time

·    Q2 orders placed increased 16.1% to 74.0k (Q1 2024: 63.7k)

·    Average Order Value (AOV) increased 12.4% to £36.87 in Q2 2024 (Q1
2024: £32.80)

 

We are pleased with the progress achieved at Discount Dragon. Revenue
continues to grow at pace, increasing circa 30% in Q2 2024 versus Q1 2024. The
business added circa 20,900 new customers in Q2 2024.

Monthly revenue from Discount Dragon surpassed the £1m mark in June 2024,
with over £750,000 coming from returning customers.

As part of our evolving customer acquisition strategy, Discount Dragon is
midway through a two-week trial of TV and radio advertisements, consisting of
regional tests on ITV1 and radio advertising spots on Heart and LBC.

Food Circle Supermarket

·    Q2 2024 post-acquisition 1  (#_ftn1) revenue of £0.35m

·    Q2 2024 post-acquisition(1) orders placed totalling 9.8k

·    Q2 2024 post-acquisition(1) AOV of £35.83

 

Food Circle Supermarket has bedded in well, with the rebrand to Nutricircle
due to be fully completed in August 2024.

Food Circle Supermarket's revenue during the entirety of Q2 2024 (inclusive of
the pre-acquisition period) increased circa 54% vs Q1 2024, reflecting the
initial marketing and stock investment made by the Group in the
post-acquisition period. The business added 3,027 new customers between 12
April and 30 June 2024.

Boop Beauty

Following our investment into Boop Beauty as announced on 8 July 2024, the
business is currently offline and is due to be relaunched in September 2024.
We intend to build on the proposition and brand, delivering surplus quality
cosmetic brands at value-driven pricing. We have been pleased by the reception
from the beauty industry and press to the deal and look forward to offering
previous and new customers cosmetics at value when the site re-launches.

Let's Explore

Following the agreement announced in May 2024 to partner with the Vodiac
distributor, Wicked Vision, which sees them run the day-to-day operations of
the business, we have been pleased with the ongoing development of the sales
pipeline for both Vodiac and the Let's Explore range.

Earlier this month, the new Vodiac Pro product, which includes a new and
improved headset and 100 VR experiences, was launched on QVC USA. The new
product was received well with all 6,000 units ordered selling out across two
airings, generating over $200,000 in revenue for the business (of which
Huddled currently owns 75%).

As in previous years, we expect most of Let's Explore's trade to take place
during Q4 and we look forward to providing a further update on the division's
progress in due course.

Martin Higginson, CEO of Huddled Group plc said:

"We are delighted with the progress we have made during the first half of the
financial year. It is apparent to us that our business model, centred around
helping suppliers effectively manage their surplus stock by buying products
often destined for waste at a significant discount to their retail value and
offering these goods to customers at heavily discounted prices, is highly
relevant.

"Food Circle Supermarket has been a welcome addition to the Huddled family,
and we are formulating an exciting growth plan including the rebrand to
Nutricircle in August. We believe Boop will follow a similar pattern following
its re-launch in September. We believe, having tested the offering within
Discount Dragon, that there is demand for discounted cosmetics and perfumes.

"We continue to invest for growth, predominantly in customer acquisition
marketing, but also in improving the performance of our websites and we have
made some tactical hires to support these initiatives."

 

 Enquiries:

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

 

 Huddled Group plc                                    investors@huddled.com

 Martin Higginson

 David Marks

 Daniel Wortley

 Zeus (Nominated Adviser and Sole Broker)             Tel + 44 (0) 203 829 5000

 Nick Cowles, James Hornigold, Alex Campbell-Harris   (Investment Banking)

 Dominic King                                         (Corporate Broking)

 Alma Strategic Communications (Financial PR)         huddled@almastrategic.com

 Rebecca Sanders-Hewett

 Sam Modlin

 Kieran Breheny

 

 

 

 1  (#_ftnref1) Covering the period 12 April - 30 June 2024

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