Brand Architekts Group PLC (LSE:BAR)’s shares fell by 20% after it reported a drop in sales due to the “impact of reduced consumer confidence on demand”.
The British beauty brand house said it expects to report group sales for 2022 in the region of £14.2mln, an 11% decrease compared to the £15.9mln generated a year earlier.
Oorganic sales declined 16% year over year minus the contribution from its new acquisition beauty and skincare company Innovaderma.
According to today's trading update, its latest acquisition delivered £800,000 of sales to the brand house’s portfolio in June.
Brand Architekts bought Innovaderma, which owns the Skinny Tan, Charles + Lee, Roots, Nuthing and Prolong brands, on 31 May.
The company now claims Skinny Tan among its three largest brands, alongside Super Facialist and Dirty Works.
The beauty brand house said it generated an operating loss during the second half of the year in line with the loss reported in the first half.
According to its interim statement for the first half of 2022, it suffered an £800,000 underlying operating loss for the period.
Seven brands were relaunched during the period, including Dr Salts, Root Perfect, Argan +; SenSpa, Kind Natured, Happy Naturals and Beautopia.
“Given the challenging trading environment the group generated an operating loss in the second half in line with that reported in the first half but was also impacted by lower revenue in the period,” the company said in today’s trading update.
The company had net cash of £11.3mln at the end of the fiscal year, after paying a cash consideration and most transaction costs for its latest acquisition.
“Notwithstanding difficult market conditions and inflation headwinds the management team are now focused upon realising both the strategic and financial benefits of the newly transformed group,” it said.
“The immediate priorities that lie ahead are implementing an effective integration plan, increasing international expansion and delivering both companies' strategies through the experiences and success of its online presence as well as the Group's retailer customer base.”