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Booktopia Outperforms FY21 Forecasts but Share Price Takes a Tumble
Booktopia has beat its forecasted revenue and EBITDA in its FY21 results. But will the hype last, and how are investors reacting?
Booktopia is reporting a 35 percent increase in its revenue for FY21, reaching $223.9 million, compared to $165.7 million in FY20. This is ten percent above the forecast of $204.5 million in the company’s November prospectus.
The online retailer’s EBITDA is $13.6 million, up 125 percent YoY – this is adjusted based on the IPO costs from October 2020. This further outperforms the prospectus by 45 percent, where it was forecast to reach $9.4 million.
Moreover, Booktopia reported that its first two months of FY22 are tracking above the same period as last year, with a ‘record’ 8.2 million units shipped in FY21, compared to 6.5 million in FY20. As such, the AOV for consumers is $71.07, with an average annual spend of $126.85, increasing from $111.43 the year prior.
“Our prospectus set some very ambitious targets for our first year as a listed company, and I am very
happy to report we have been able to eclipse those expectations,” said Tony Nash, the CEO of Booktopia. Its strategy will now shift to executing its ‘multi-pronged’ strategy, which includes the ramping of market penetration, locking in new accretive partnerships and acquisitions, and expanding its reach in the book industry.
“Our team’s performance over the last 12 months, the strength of the Booktopia brand and our ability
to adapt quickly to a rapidly changing external environment leaves us confident we can continue to
grow at or above what we have achieved over the last few years,” Nash said.
Interestingly, Nash explained that despite lockdowns in Melbourne and Sydney, sales are tracking above the same period as last year. The retailer’s active customer base has increased by 19 percent on the previous year to 1.8 million, with its customer base reaching over five million.
Booktopia has secured three partnerships in FY21, including Australian publisher Brio Books and edtech provider, Zookal. The retailer has also partnered with UK publisher Welbeck for a new joint entire in ANZ.
Alongside these partnerships, Booktopia will continue to pursue ‘bolt-on’ opportunities to expand the retailer’s growth further and leverage its infrastructure. “Bolt-on opportunities, whether through acquisition or partnership, provide a clear path to supercharging our growth over the next few years and if we see an opportunity that provides the right benefits, at the right price, we will pursue it,” Nash said.
Nash also explained that while the current opportunities remain in Australia and New Zealand, Booktpia is open to seeking out opportunities in other markets if there are ‘attractive, medium-term, growth potential’.
Further to its partnership and acquisition opportunities, Booktopia has additional plans to expand its publishing and publisher services, Booktopia Publishing and Booktopia Publisher Services. “The Australian book industry is forecast to generate more than $2.6 billion in sales this year, and we want to be at the very core of that industry to ensure our customers are getting the best deals on the best books,” Nash explained.
Additionally, Booktopia’s 14,000 sqm DC in Sydney’s west, which it invested $20 million into automation, resulted in the doubling of its capacity, allowing the company to ship 60,000 books per day. The company has announced it would be signing agreements to secure an additional 13,500 sqm of warehousing and distribution facilities in Sydney’s west (Enfield) to increase capacity further and complement the existing DC in Lidcombe. Of this move, Nash explained that the “investment in distribution centres together with our strong balance sheet means we are well-positioned to leverage our future growth profitably and sustainably.”
Shares for Booktopia have remained steadily growing for the last 90 days, growing 16.6 percent and 1.4 percent over the last week. However, its overall share prices for the year have been somewhat choppy, despite the ongoing steady growth from the last three months.
The announcement of today’s report has resulted in a plunge in its share prices. Its share prices are now down 5.96 percent from its previous closing price to $2.84, following a slight increase after midday.
Nash commented that the pandemic would continue to accelerate online retail. The retailer will continue to benefit from these ‘tailwinds’, including increased discretionary spending locally, mainly due to travel restrictions and lockdowns.
“We will continue our growth strategy, investing into key areas of the business to cement our online
market leadership and drive increased market share with an ongoing ‘customer obsession’ mindset to
ensure our engagement and service is second to none,” said Nash.