Koovs’ plan to become the ASOS of India is back on track. The impact of the lack of resources in FY19 showed up in the low growth in reported revenue (+9%). With the tap turned back on, GOV has doubled in 1Q20 and web traffic is up 148% (and this not achieved at the expense of the trading margin: up to 21%)
The important information from Koovs' FY19 results is not the results for the year but the trading since the company secured its additional financing. With Gross Order Value (GOV) up 104% in 1Q20, Koovs is once more showing the sort of growth associated with online success. FY19 itself was a lost year, as the company conserved cash while it successfully sought new investors; they eventually arrived - not only with money but with important synergistic benefits too. The GOV data is a function of being able to finance growth again. The benefits of the Future Lifestyle (FLFL) tie-up are still to come in additional distribution and improved buying.
Separately, the Company has today announced that it has reached a binding agreement, subject to shareholder approval, with Future Lifestyle Fashions Limited ("FLFL"), part of Future Group, on the mechanics for which FLFL will invest the balance of additional funding of approximately £10.5 million into the Company, the proceeds of which will be used to support Koovs' growth strategy. Please refer to the Company's RNS this morning for further information.
Lord Waheed Alli, Chairman of Koovs, commented: "Koovs has been through challenging times over the last couple of years. Mary and the team have taken the decisive actions necessary to help navigate through these disruptions further highlighting the resilience of our business model and the strength of the team. With the support of our shareholders, the team is now driving the business forward and we are confident we can achieve strong growth this financial year. I would like to personally thank everyone for all their hard work and dedication throughout this testing time.
Over the last 18 months, the Board has demonstrated its experience and expertise, taking the decisions necessary to protect the Koovs brand and to conserve resources during a period of turmoil caused by demonetisation and the implementation of Goods and Services Tax (GST); this included reducing marketing costs and stock levels. The business has now emerged from this period and is well positioned to deliver on its growth strategy. This is evidenced in the first three months of calendar 2019 with GOV increasing by 67% to £4.4m compared to the same period in 2018.
Mary Turner, Koovs' Chief Executive Officer, added: "The external factors that disrupted our business are now firmly behind us. We have deployed the funds raised in 2018 to resume marketing activities and expand the product range - this was the driving force behind the growth in sales and trading margin experienced in the second half of the year. We are now building on this positive momentum and are starting to deliver the growth we always believed the Company is capable of."