Selasa, 25 Mei 2021

Made.com to raise £100m in London IPO - Financial Times

Made.com aims to raise £100m in its forthcoming initial public offering and to quadruple annual sales to £1.2bn by the end of 2025.

The online furniture and homewares retailer plans to seek a premium London listing with a free float of at least 25 per cent, and invest the flotation proceeds in marketing and supply chain improvements aimed at reducing the time between customer orders being placed and goods being delivered.

The intention to float notice did not set out a likely valuation, though bankers have speculated that it could be up to £1bn.

Westwing, a Munich-based peer that grew out of the Rocket Internet stable of businesses, has a market capitalisation equivalent to about £870m or just over twice its £372m of annual revenue. Made.com had sales of £315m last year.

The group, founded by entrepreneurs Li Ning and Brent Hoberman in 2010, sells to about 1.2m active customers in the UK, Germany, Switzerland, Austria, France, Belgium, Spain and the Netherlands but plans to expand beyond Europe in the coming years.

Chief executive Philippe Chainieux acknowledged that the gross sales target represented a lower compound annual growth rate than the 36 per cent the group has reported over the past five years.

But he said there would be additional investment throughout the period. “We believe there is a massive opportunity ahead of us, especially in continental Europe which is 80 per cent of our addressable market but only around half of our revenue today.”

He also said Made.com would aim to take share in a highly fragmented furniture market where the top 10 companies in Europe, including the mighty Ikea, account for less than 20 per cent of the total market by revenue.

The group made an underlying loss of £5.1m in 2020, but finance director Adrian Evans said its negative working capital model meant it was highly cash generative.

“Sixty per cent of purchases are paid for by customers while the goods are in transit [from Asia], whereas we pay for them when they arrive at our warehouse,” he said, adding that a data-driven system closely matched supply with demand to reduce unsold inventory.

Made.com’s longer-term aim is for a “low teens” profit margin before interest, tax and depreciation charges.

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2021-05-25 11:04:43Z
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