Aumake makes profit progress

AuMakeDiagou retailer Aumake said it has made significant progress towards breaking even in the third quarter after it bounced back from a sales dip during Chinese New Year to book its strongest month on record in March.

Delivering its quarterly figures on Monday morning, Aumake said it expects its cost line to stabilise over the next twelve months on the finalisation of a hiring spree to fuel its growth while increasing momentum in its own-brand products will support margins.

The retailer booked $5.13 million in sales in for the three months ended March, down 13 per cent on the second quarter on a seasonal dip in January/February associated with Chinese New Year.

The recently listed business bounced back in March though, recording a record $2.37 million in sales, momentum it says has continued into April.

“Continued momentum from March 2018 into April 2018 indicating a step change in profitability and further financial improvement anticipated for the June 2018 quarter,” the company said.

Same-store sales across Aumake’s five original stores in Sydney were up 31 per cent on the prior corresponding period last year, and were up 13.2 per cent compared to October 2017, when the business listed on the ASX.

The company said all its stores were profitable, bar its recently opened Haymarket hub and Auburn, NSW locations.

Gross profit was up 12 per cent to $824,000 quarter-on-quarter, while gross margin increased 13 per cent to 16.05 per cent, driven by growth in Aumake’s private label business.

Own-brand sales, including Health Essence, Jumbuck/UGG and Medigum, were up 70.6 per cent q/q to $273,000 with a gross margin of 55 per cent.

Operational expenditure was $2.3 million in the March quarter, split into $1.6 million of CODB costs and $700,000 of strategy implementation costs.

$909,000 was also invested into store renovation and fit out costs as capital expenditure.

“A major component of normalised CODB and strategy implementation costs relate to staffing levels in areas of procurement, marketing & sales and China operations,” the company said.

“The company has now achieved appropriate staffing levels to support growth … which will result in stability for both normalised CODB and strategy implementation costs over the next 12 months.”

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