Brand Architekts disappointed at losses but still sees progress

​Beauty specialist Brand Architekts Group published what it admitted was a disappointing set of full-year figures on Tuesday as it reported a loss, although it’s clear that progress is being made.

The 12 months to the end of June saw an underlying operating loss of £1.2 million, although this was £0.6 million lower than the previous year, “primarily as a result of better targeted advertising and promotions”. 

However, its pre-tax loss was much wider at £6.8 million compared to £4.1 million a year ago, although this was driven by a £3.5 million impairment in the goodwill associated with the acquired Innovaderma business.

On the plus side, the company said it “successfully integrated” Innovaderma into the group and delivered £1.4 million of ongoing operating expenses savings.

Group sales were up 41% to £20.1 million, mainly due to the full-year effect of that acquisition, which completed at the end of May 2022. Excluding it, revenue increased by 7% “due to strong international sales offset by challenging trading conditions in UK channels”.

But underlying gross profit margins increased by 6.2% to 39.7%, helped by InnovaDerma, with margins in the Brand Architekts business similar year on year.

The company said it saw 49% growth vs the prior year in international channel sales driven by the post-Covid rebound in volumes from general merchandise stores across North America and Europe, benefiting its Dirty Works brand.

And it confirmed the Dirty Works distribution rollout to AS Watson stores in 2023 and 2024 across the Middle East and Asia.

It also launched key new products such as Super Facialist Clear Skin, targeting problematic teenage skincare needs that launched on Amazon in September and in Boots in June. The new Super Facialist D2C site launched in March as well, and branded Super Facialist in-store merchandising trays were rolled out to Boots and Morrisons.

CEO Quentin Higham said: “Despite the challenging global and domestic macro-economic factors, we have made good progress. We remain confident that our brand development and brand reach strategic pillars will enable us to return to profitability and achieve our medium and long-term goals.”