Moo sales pass £100m amid currency switch
Tuesday, August 27, 2019
Sales at Moo have powered past £100m, in a year when the group also opted to switch to reporting in US dollars – with more than 70% of turnover now originating in the States.
London-headquartered Moo Print posted sales of $134.95m (£109.8m) in the year to 31 December 2018. The previously reported sales in sterling for the 2017 financial year were £90.25m.
Founder and chief executive Richard Moross said that, with the majority of the firm’s revenues coming from the US in dollars, the switch to reporting in that currency would reduce the impact of exchange rate fluctuations, and give “a more normalised, constant currency view” of the group’s performance.
“This is a reflection of our continued significant success in North America and a celebration of Moo’s international outlook and investments from day one,” he said.
There is no indication that Moo could look to relocate to the States.
While overall sales grew by 16%, with North American sales surging by 18%, the picture in Moo’s home territory of the UK was not as stellar. The UK was Moo’s only reportable territory not to show an increase in sales, with turnover effectively static, down $10,000 at $14.88m.
Chairman Darren Shapland said: “Richard and his strong executive team delivered a year of record performance… Net cash generated from operating activities is up 132% to $12.4m. The company’s strategy of focusing on larger companies in North America with new products was an important driver for success for the year.”
Moross said that the West Coast region continued to be Moo’s strategic focus “with excellent growth and customer metrics”. A new office in Denver was opened during the period.
Overall headcount grew by 69 to 548 employees.
Adjusted EBITDA jumped from $6.64m to $10.42m, and operating profits increased by 50% to $2.27m.
However, a $3.2m bill for interest and similar charges, including $1.7m in loans and $1.4m in foreign exchange-related charges, saw the group post a pre-tax loss of $943k.
The group’s offering for larger companies, Moo Business Services, grew by 44% and now makes up more than a quarter of sales at $35m. And a new range of Custom Notebooks aimed at corporate clients, with a minimum order quantity of 50 or 100 depending on the design, brought in more than $1m in sales, despite technical challenges meaning orders are currently handled offline rather than via the Moo site.
Moo also generated more than $15m in sales from its revamped Promotional Products category which included new sizes, papers and finishes.
Despite the record results, and a 12% increase in technology investment to $9.7m, Moross said that delivery of Moo’s upgraded tech platform had been slower than anticipated and the group was “reviewing our strategy”. Chief technology officer Marta Jasinska, who took over the role in October, has been tasked with accelerating the firm’s plans.
Moo has manufacturing sites in Dagenham, Essex and in Lincoln, Rhode Island in the US. The firm said that it had implemented “more economic and scalable service contracts” with main print vendor HP last year, as well as introducing lean manufacturing methodology.
Subsequent to the year end, Moo has reduced its debt by $2.54m and its revolving credit facility by $1.27m. “The group has also raised $2.75m from existing investors through an Advance Subscription,” it stated.
Tech venture capital and private equity firm LocalGlobe upped its stake in the business as a result.