Grays Ecommerce loss narrows
Gross sales were up 36.4 per cent to $508.6 million and revenue increased 31.5 per cent to $192.9 million, up from $146.8 million in the corresponding period.
Grays Ecommerce Group CEO, Mark Bayliss, said FY15 was a “transformational year” in which the company was listed on the ASX, established its organisational and cultural identity while streamlining operations to drive efficiencies.
Grays B2C segment faced challenging market dynamics of online fixed price retailing. Grays operates both online auction and fixed priced stores. Gross sales increased 13.7 per cent to $166.7 million and EBITDA was a loss of $1.7 million.
The business integrated DealsDirect and Grays consumers offerings, which is expected to generate $3 million of annual cost synergies from FY16. It also launched a devoted wine website, the company’s strongest consumer category.
“While growth in online consumer shopping is forecast, fixed price online retail is highly competitive. Offsetting this, we expect at least $3 million of annual cost synergies and additional revenue synergies from a successful integration of DealsDirect and Grays to flow through from FY16.
“Wine, a category in which we are strongly placed is generating attractive returns and will continue to grow and benefit from the launch of our new dedicated online wine site, www.grayswines.com.au,” Bayliss said.
Growth from Grays’ B2B online auction sites was driven by transport, mining and construction sectors and an increased presence in South East Asia.
B2B sales improved 51.1 per cent to $342 million and EBITDA increased 74.6 per cent to $13 million.
During the period the company acquired DMS Davlan, an agribusiness machinery auction house in Australia, and Bryan Andrews Auctioneers, based in Christchurch, New Zealand.
Bayliss said he was pleased with the performance of the B2B business which will continue to be the “growth engine for Grays Ecommerce Group.”
“The strong performance in B2B has facilitated reinvestment in the business including new, larger premises in Queensland and Victoria, as well as investment in key senior sales and management personnel,” Bayliss said.
The company expects continued growth in revenue and earnings over FY16 from recent acquisitions and cost synergies.
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