Online personalised print platform Redbubble has released its half yearly figures, with the company struggling to reach its IPO forecasts.
Based on the figures full year results are likely to show a $6m-$9m loss against the $1.3m loss forecast.
The company revealed its gross transaction value (GTV) was lower than the expectations that underpinned the successful initial price offering (IPO). The GTV ended up at $98.6m, $11.6m lower than the forecast.
The earnings before interest, tax, depreciation and amortisation EBITDA came at a loss of $1.1m for the half, compared to a $500,000 profit expected from the IPO forecast for the first half.
These numbers have lead Redbubble to revise its forecast assumptions and is now expecting its FY2017 GTV to be in the range of $175m to $185m, compared to the $215m forecast at IPO. The resulting revenue will be $140m to $148m, compared to $172m. This new forecast shows a year on year growth of 22 per cent to 29 per cent.
Redbubble says several macro-economic drivers have contributed to these figures, the US election and Brexit in the UK. Both markets are Redbubble’s two largest, accounting for 61.2 per cent and 14.6 per cent. Another struggle for Redbubble was the significant and rapid shift to mobile traffic.
There was a modest growth in operating expenditure of 9.3 per cent with the IPO forecast growth of 26.7 per cent for the full year.
[Related: Redbubble shares in slump]
Martin Hosking CEO of Red Bubble says overall he is pleased with the result Redbubble’s achieved since its IPO in May last year.
“While clearly it was disappointing not to have achieved the forecast we provided at the time, it does not mean the business is not enjoying significant growth and emergent operating leverage,” he says.
There was a 38.1 per cent growth in gross profit coming in at $28.3m and the gross profit after paid acquisition coming in at 33.7 per cent at $21.8m.
With these figures Hosking pointed out the emerging positives, “GTV, in the first half of the financial year was 31.1 per cent and is indicative of the company seizing and significant opportunity. Even more importantly, our growth is in gross profit after paid acquisition of 44.6 per cent shows that this is being achieved through below cost means that we have indicated underpins the Redbubble marketplace.”
Hosking went on to explain the growth in customers, “during the half year, customers grew by 33.8 per cent and selling artists by 54 per cent. The print-on-demand bubble, combined with outsourced fulfilment means that this growth is cashflow positive, seen particularly strongly during the quarter that has just passed, with low capital requirements.”
The company’s growth initiative includes acquisition of customers and artists at low cost through expansion in Europe, Improvement in helping users ‘find their thing’ by upgrading content search/recommendation capabilities, deepening relationships with customers through improved mobile-first customer experiences and continue to scale the Redbubble platform building new, faster infrastructure and releasing economic value.
Redbubble has a development team with more than 50 people and have recently opened an office in Berlin. Redbubble became a publicly traded company in 2016 and are worth $300m.
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