Brand Architekts Group, a beauty specialist, recently unveiled its full-year figures, acknowledging disappointment due to reported losses. However, a closer examination reveals significant progress.
In the 12 months ending in June, the company reported an underlying operating loss of £1.2 million, showing an improvement of £0.6 million compared to the prior year, attributed to more precise advertising and promotions.
On the downside, the pre-tax loss widened to £6.8 million from £4.1 million in the previous year. This increase was primarily due to a £3.5 million impairment associated with the acquired Innovaderma business.
On a positive note, Brand Architekts Group successfully integrated Innovaderma into the group and achieved ongoing operating expenses savings of £1.4 million.
Group sales surged by 41% to £20.1 million, primarily due to the full-year effect of the Innovaderma acquisition, which concluded in May 2022. Excluding this acquisition, revenue still experienced a 7% increase, primarily driven by robust international sales, despite challenging trading conditions in the UK market.
The company also reported a 6.2% increase in underlying gross profit margins to 39.7%, with substantial contributions from Innovaderma, while margins in the Brand Architekts business remained steady year-on-year.
Significantly, Brand Architekts Group achieved a 49% growth in international channel sales compared to the previous year, capitalizing on the post-Covid resurgence in volumes from general merchandise stores in North America and Europe, particularly for its Dirty Works brand.
In the pipeline, the company confirmed plans for the distribution rollout of Dirty Works to AS Watson stores in the Middle East and Asia in 2023 and 2024.
Brand Architekts Group also introduced key products, including Super Facialist Clear Skin, targeting teenage skincare needs, which launched on Amazon in September and in Boots in June. Additionally, a new Super Facialist direct-to-consumer (D2C) site was launched in March, and branded Super Facialist in-store merchandising trays were rolled out to Boots and Morrisons.
CEO Quentin Higham remains optimistic, stating, «Despite challenging global and domestic macro-economic factors, we have made good progress. We remain confident that our brand development and brand reach strategic pillars will enable us to return to profitability and achieve our medium and long-term goals.»