Despite increasing their revenue significantly, Castore has reported a pre-tax loss.
- The British sportswear firm recorded a loss of £28.8m for the year ending 4 February 2024.
- A previous year profit of £14.6m contrasts sharply with this year’s financial outcome.
- Unexpected operational costs contributed to the substantial financial downturn.
- Despite these setbacks, Castore’s sales figures have seen impressive growth across various markets.
Castore, a British sportswear company supported by renowned figures such as Sir Andy Murray, reported a pre-tax loss of £28.8 million for the fiscal year ending on 4 February 2024. This announcement marks a significant change from the prior year’s profit of £14.6 million. However, Castore’s revenue showed a considerable increase, rising from £115 million to £190.3 million over the same period.
The primary driver of the loss appears to be extraordinary costs amounting to more than £24.4 million. Key expenditures included £2.1 million on warehouse consolidation efforts, £9 million set aside for stock provisions, £6.3 million incurred through fundraising activities, and £3.8 million related to onerous contracts. The firm’s operating profit dwindled significantly as a consequence, decreasing from £16.5 million to a paltry £399,148, excluding these exceptional costs.
A strategic initiative to enhance supply chain efficiency, including the consolidation of UK warehouses, was highlighted by Castore. This effort, while aiming for long-term benefits, initially posed challenges, adversely impacting operations and customer ordering experiences. In response, management temporarily boosted staffing and curtailed promotional activities to mitigate these difficulties. Trading nonetheless suffered in the latter half of the financial year.
Despite the setbacks, Castore’s turnover exhibited robust growth across the UK, Europe, North America, and other international markets. In the UK, turnover rose from £79.8 million to £106.1 million, while European sales surged from £25.3 million to £59.6 million. North American sales increased from £3.1 million to £4.4 million, and the rest of the world saw a substantial leap from £6.6 million to £20.1 million.
The company expressed optimism about overcoming short-term challenges linked to stock write-offs and order fulfillment costs, which arose from missing optimal clearance windows. Castore is confident that its strategic initiatives will eventually lead to more efficient operations, despite the current financial adversity.
Castore remains optimistic about future operational improvements despite current financial challenges.
