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Online shopping Attraqt’ion
Online shopping and inventory control technology start-up Attraqt (ATQT:AIM) is closing in on its first ever profit this year.
The digital retail space is littered with failed e-commerce start-ups that have struggled to generate meaningful scale and cash flow, but Attraqt does not look destined to join their number.
June marked the first month of positive cash flow from operations this year, and that trend has been maintained each subsequent month. Analysts forecast pre-tax profit of £0.7m on £14.9m of revenue for the 12 months to 31 December 2017.
The London-based company is leveraging its Freestyle platform to become a trusted digital partner to many otherwise traditional retailers. Superdry, North Face, Timberland, Vans and Tesco’s F&F fashion brand are clients, among others.
Progress was accelerated earlier this year with the £25m cash acquisition of Fredhopper, a cloud-based provider of onsite search, navigation and visual merchandising solutions to online retailers. The deal completed in early March and integration has been successfully completed, from the executive team, sales and account management and product development.
Emphasising the value of the combined business, the enlarged Attraqt has won contracts with 13 new brands, including Specsavers, wellies designer and seller Hunter Boots, and The White Company, the high design fashion and home furnishing retailer. Attraqt also won its second biggest remit to date post its 30 June half year end, with one of the largest global sportswear manufacturers in the world.
The internet is fast becoming the destination of choice for shoppers. Online sales across the entire retail sector, excluding food, have been outpacing in-store growth for some time. They grew 18% last year (2016) and have soared by 27% over the past two years, according to figures from BDO, an accountancy firm. Bricks and mortar shop sales fell over both periods.
Attraqt’s confidence in taking an increasingly substantial slice of this growth is demonstrated by further investment in its sales and marketing functions and account management. This is in the face of short-term disruption that may be caused by the takeover of a major e-commerce platform supplier. Attraqt believes that any interruption will be limited and short-lived, estimating that just 7% of potential revenue this year is at risk.
‘We have been impressed with the ambition of the business and it appears to be sustaining momentum,’ commented Dale Peters, analyst at the technology business website TechMarketView.