Oddbin's owner reports boost in turnover, and losses smaller than last year
Source: The Drinks Business
By Arabella Mileham
November 15, 2022
EBF Holdings Ltd - the parent company of UK wine retailer Oddbins - saw turnover rise by nearly £4million to £11.98million in the year to 31 July 2021, however "difficult trading conditions" still resulted in an operating of loss, albeit an improved one on last year.
Losses for the 12 months to 31 July 2021 stood at £832k, down from £1.22million the previous year, accounts filed at Companies House showed, meanwhile "significant changes" in the business, saw gross profit marketing rise to 31%, up from 17% in 2020.
Currently, the company's wholesale business only supplies its own retail arm - Wine Retail Limited (which comprises 25 Oddbins stores) a wholly owned subsidiary of Wine Retail Holdings Limited, which is itself a subsidiary of EFB Holdings Ltd. It noted that it had decided not to restart its wider wholesaling activity "as the economic climate isn't conducive to doing so", however it said it was exploring avenues such as licensing to boot revenue.
Although ecommerce had slowed after 2020's exponential 800% growth, it remained "profitable" and growing, the directors said, and the company had invested in this. It noted that its quick implementation of "immediate direct deliver was growing, and accounted for "a significant" number of new customers and proportion of weekly sales.
Meanwhile, in separate accounts filed at Companies House by Wine Retail Limited - which trades as Oddbins - profit before tax was recorded as £26,069, although its finances remained in a net liabilities position of £187,038,, down from £219,908 the previous year. The accounts showed that £1.673million was owed to creditors, due to be paid within the next 12 months - up from £1.535 in 2020. Only £28,775 was owed to trade creditors (ie suppliers), the vast majority comprising amounts owed to group undertaking.
These accounts showed debts had fallen from £231,459 in 2020 (in the 18 months to 31 July 2020) to £188,484 in the 12 months to 31 July 2021. However, the ultimate shareholder and parent company and group has committed to continue to support the company with working capital "as and when required", saying they would not request repayment of loans until the company's financial circumstances allowed.
Oddbins' supplier European Food Brokers Limited - a subsidiary of the main parent group, EFB Holdings Ltd and the group's wholesale company - also continued to make losses of £755,000 - albeit down from £3.25million in 2020.
The company directors attributed the ongoing loss to reduced activity, which helped to increase the profit and loss reserve deficit. However, they also noted that there was likely to be an increase in activity as trading retail outlets acquired in May 2020 continue to establish themselves. In accounts filed at Companies House last week, it noted the reacquisition of its AWRS wholesaling activity in April 2020, which had enabled it it to start wholesaling again although "due to current market conditions, it is currently not possible for the company to recommence these activities on a commercially viable."
In January, European Food Brokers Limited reported turnover down by nearly £10 million in the 12 months to 31 July 2020, following its main customers going into administration in 2019 - however losses seem to have stabilised, on the back of very strong online sales. Its profit margins had also almost doubled - from 6.6% to 12% on the back of "significant changes" following the acquisition of 26 Oddbins stores by sister company Wine Retail Limited in 2020, and Oddbins' booming online sales, which rose 800% during the pandemic.
In January 2019 the parent group's four retail business - EFB Retail Ltd, Whittalls Wine Merchants 1 and Wine Merchants 2 (operating as Oddbins ) and sister company Wine Cellars Trading Limited (WCTL, operating under the Booze Buster, Simply Drinks, Oddies, and Shop2Go fascias) - went into administration. The financial problems largely rested on European Food Broker Ltd losing its excise approvals, and HMRC stripping EFB Trading Limited of its alcohol wholesale registration scheme licence (AWRS) in July 2018, barring it from operating as a wholesaler, putting considerable financial strain on the parent company. More than 70 stores were closed but 28 stores were bought out of administration in June 2020, by Wine Retail Limited, which was created in January 2019.