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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 group, is pleased to provide an unaudited update on Q4 2024 and FY 2024 trading.  

Highlights

FY 2024 highlights:

Summary

2024 has been a year of growth across all of our brands, with total Group revenue exceeding £14m. We believe our strategy to reduce waste by acquiring surplus inventory whilst, at the same time, passing savings to customers is resonating across our supply chain and customer base.

The amount of surplus stock, whether it be food or cosmetics, vitamins or perfumes, continues to be a global problem. With manufacturers and retailers coming under increasing pressure from both customers and legislation, we believe that Huddled is well placed to reduce the quantum of these products to going to waste and to deliver value to its growing customer base in the process.

Q4 2024 was a record quarter for the Group, with revenue of circa £5.4m. Nutricircle and Boop exceeded our expectations, which, along with growing revenue at Discount Dragon, put pressure on our warehouse.

In Q4 2024 our warehouse in Leigh fulfilled over 110,000 orders, an increase of circa 27% compared to Q3 2024, approaching the limit of orders that can be handled.

As a direct result, in mid-November, pending the redesign of our current warehouse floor and the addition of the new floor in Q1 2025, we took the decision to reduce the stock levels and proactively dispose of legacy and slow-moving stock. This reduction in stock, whilst impacting profitability in the final two months of the year, will allow the smooth transition to a new warehouse operating environment, which we believe will, in time, significantly reduce the cost per pick and, therefore, our overall fulfilment costs.

We used this stock as an opportunity to offer free gifts and reduced-price offers via a range of marketing-led sales promotions to attract new customers. The total number of new customers across our three core brands in Q4 2024 was 38.5K, an increase of 61% compared to Q3 2024.

In October 2024, our partner in the Let's Explore business, Wicked Vision Limited, went into administration. Whilst the financial impact was negligible, it resulted in Huddled's management having to step in and reassume day-to-day running of the business to ensure everything was in place for the division's peak trading period. Despite this challenge, we are pleased to report that the majority of the stock on hand was sold in Q4 2024, generating sales of circa £1.1m. Huddled expects to receive a net cash inflow of £0.4m from the Let's Explore joint venture during the course of Q1 2025, during which time we will assess our future strategy for this business.

The adjusted EBITDA loss is expected to be narrower in the second half of the year compared with the first half. The FY 2024 loss is in line with our expectations and reflects the fully expensed acquisition of over 100,000 customers in the year and scaling-up of warehouse capacity.

We ended 2024 with cash on hand of £1.6m. The directors remain confident that the Group has sufficient resources to take the business into profitability.

Divisional Update

Discount Dragon

Discount Dragon has continued its growth trajectory despite the limitations on the warehouse in the final quarter. Over 285K orders were placed in the year, up 70% on 2023, delivering revenues of circa £10.8m, an increase of 112% compared to 2023². Returning customers accounted for 73% of all orders. Average Order Value ("AOV") has increased circa 33% year-on-year², ending the year at circa £40.

Q4 revenue was circa £3.1m, an increase of circa 74% on the same period in 2023², and an increase of circa 9% versus Q3 2024. During the period we welcomed 18.8K new customers.

With over 76K orders in the final quarter of 2024, the brand was, alongside Nutricircle and Boop running at above maximum capacity in terms of fulfilment.

We were pleased to see Discount Dragon deliver a modest adjusted EBITDA profit for the first time in the month of October 2024, underpinning the Company's belief in its strategy and business model. 

Nutricircle

With revenue of circa £0.7m, and 22.4K orders in the final quarter of 2024, Nutricircle delivered its best quarterly performance to date, exceeding our expectations.

With solid Q3 growth the decision was taken to scale the business in Q4. As a result, the number of new customers added in Q4 2024 was 10.4K, circa 67% more than were added in Q3 2024, driving sales to record levels, with revenue increasing by circa 28% against Q3 2024. The investment in new customer acquisition has already started to pay dividends, with the brand reporting further revenue growth in early January 2025 trading.

AOV for the post-acquisition period averaged circa £34, slightly lower than historic levels due to the prevalence of new customer orders, which tend to be smaller than returning customer orders. Work is underway to introduce a wider product range, including vitamins and supplements, in order to drive up AOV.

New TV and radio adverts have been produced for Nutricircle which are due to be aired in mid-January 2025 to coincide with the seasonal increase in gym attendance and other fitness activities. The brand launched on TikTok, and TikTok live in early January 2025.

Boop Beauty

We were delighted to see Boop Beauty deliver revenue of circa £0.5m in its first quarter of trading in Q4 2024. 12.5K orders were placed and 9.3K new customers were welcomed in the period. AOV on this brand has started strongly, averaging circa £37.

The focus on the reduction of surplus cosmetics going to waste has struck a chord with customers and manufacturers alike, allowing the Group to quickly establish itself as a serious player in the cosmetics sector.

Whilst the business is still in its infancy, with investment, we can see a pathway to profitability in 2025.

The current focus is on building new customer numbers at scale.   To this end, TV and radio adverts have been produced, as well as investments made in TikTok affiliates and TikTok live airings.

In December 2024, the remaining 25% of the business was acquired, giving Huddled 100% ownership of the brand. This will enable the Company to maximise any returns on its investment in the brand, a brand we think has the potential to become a valuable asset to the Group.

Martin Higginson, Chief Executive Officer of Huddled commented:

"2024 was an incredible year. We more-than-doubled the revenue of Discount Dragon, acquired two new brands in Nutricircle and Boop Beauty, processed over 346K orders, and welcomed over 100K new customers.

"As we move into 2025, we will start to see the benefits of the additional warehouse space and efficiencies. In addition, the growth in orders, and revenue, will bring further savings from packaging, carriers and payment processing, helping to drive better margins across the Group.

"Turning surplus stock into savings for our customers is constantly at the forefront of our minds. As we continue to grow and get our message out there, we are able to deal with more manufacturers and retailers directly, helping them solve a surplus issue as well as driving more value for our growing customer base, who have rated each of our brands as 'Excellent' on TrustPilot.

"Whilst there is still much to do, we are confident we now have the foundations for success in place. I would like to thank the entire Huddled team for their continued efforts and hard work, the talent we have is incredible."

¹ FY 2023 comprised the Let's Explore division for the full year and Discount Dragon from 16 October 2023.

² Like-for-like comparison including pre-acquisition revenue.

Enquiries:

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