Specialist manufacturer and retailer of kitchens, bedrooms and freestanding furniture, John Lewis of Hungerford Plc, has reported a growth in half year sales.
According to its unaudited interim results for the six months ended 31 December 2022, total sales rose 18% to £5.4m from £4.6m against the corresponding period in 2021, and a 60% growth over the pre-pandemic half year period to 31 December 2019.
The total of dispatched sales and confirmed forward orders for the first 38 weeks of trading in the current financial year stands at £9.2m, up from £8.5m.
The underlying adjusted loss before tax for the half year was £105k, slightly widening from a loss of £81k. In the 2022 calendar year, the Company experienced substantial and sudden increases in costs of some key raw materials.
The Company took swift action to raise prices on all new orders from the start of the 2022/23 financial year in order to offset cost increases. The average lead time between taking an order and completing the installation and recognising the sale is six months.
“The sales recognised in the first half of the current financial year were predominantly at the previous retail prices before any price increase had been applied, and consequently the gross margin was lower at 42% (FY2021/22: 45%),” the company said.
“The Board expects that the gross margin in the second half of the current financial year will benefit from these price increases, which customers have accepted as necessary and market standard increases, and be closer to its historic run rate. The Board also notes that the significant cost pressures suffered in 2022 are easing, as the current year progresses, with the management team focused on increasing the gross margin through improved purchasing and improving operational efficiencies.
“The movement in administration costs is split between additional infrastructure costs in the support functions which have been strengthened to enable the front-line team to focus on conversion; and delivering an unrivalled customer experience. The high levels of quoted business throughout the first half of the financial year demonstrate the brand continuing to build on its digital reach and share of voice in all online platforms.
“Investment to optimise the website experience for mobile devices has been instrumental in the increase in enquiries into the business. Additional investments in the Company’s production capacity, through the recruitment and development of a larger team, will allow the Company to capitalise on a traditionally busier second half year.
“Future orders, against which a first stage deposit has been taken, are tracking the prior year and the Board’s central scenario is to deliver a c£12m full year revenue performance, which the Board believes would result in the profit before tax and non-recurring costs being ahead of the prior year.”