AuMake’s record first quarter results rolled into a record half the business announced on Wednesday, with a 402 per cent gross profit growth driven by large increases in revenue and margin, as well as better than expected trading conditions.
Gross profit reached $21.1 million, up on the $4.2 million earned in 1H19, due to a 143 per cent jump in gross margin to 46.7 per cent due to the strong increase in sales of own brand AuMake product, and exclusive Broadway product.
Additionally, the business saw an increase in Asian tourist visitation across both AuMake and Broadway during the period, and their appetite for high margin retail products.
Despite this growth AuMake posted a statutory net loss of $500,000, compared to a $3 million loss in the first half of FY19, due to cost of doing business taking up 46 per cent of the business’s revenue.
Revenue more than doubled to $45.2 million, 107 per cent up on the prior corresponding periods $21.9 million. 18.8 per cent of this revenue was made online, as the business continued to transition customers to online stores wherever possible – with online sales reaching $8.5 million.
However, the business remains vigilant toward the remainder of the year, noting that the spiraling impact of the coronavirus outbreak could have a drastic impact on the business’s core Asian tourist customer.
“From industry consultation, the company is confident that the impact will be temporary and will not impact the long-term opportunity for it to establish itself as the preeminent Asian tourist retail brand in Australia and New Zealand,” the company said in a statement on the ASX.
AuMake is not alone in its assumption that coronavirus will impact its business, with retailers ranging from Sephora to Nick Scali reassessing how they will trade in the short-term due to the virus’s impact on the global economy.