Gousto has returned to profitability after putting the brakes on growth and prioritising margins.
Revenues were almost flat year on year in 2023, nudging up by 1% to £308m as the recipe kit business turned off the tap for customer acquisition to focus on retention and save money. It follows a 2% year-on-year sales decline in 2022 as nine years of rapid growth came to an end.
In a bid to bounce back from an underlying loss of £8m in 2022, Gousto increased its use of tech and AI, as well as keeping a close control over costs and resetting capacity with the mothballing of two distribution warehouses and closure of a production facility.
The moves powered the group to “industry-leading margins” despite ongoing inflationary pressures. Gross margin jumped by almost 300 basis points to 53.2%, while underlying EBITDA margin moved up to 8.3%, compared with –2.7% in 2022 and +6.4% in 2021.
Underlying EBITDA for the year ended 29 December 2023 was a record £26m, which Gousto said was “comfortably above” the September guidance of in excess of £20m.
Gousto, which did not disclose a full profit & loss statement with the trading update, added its business goals for 2023 had been “achieved in full”.
The company declined to reveal pre-tax figures, which had plunged from a loss of £19.9m in 2021 to £157.6m in 2022 as the business was hit by one-off costs related to the capacity reset.
“We have demonstrated the strength of our model, pivoting at speed to profitability, resulting in a £34m year-on-year improvement in underlying EBITDA,” said CEO and founder Timo Boldt.
Gousto’s cash performance was also stronger and “comfortably ahead” of September expectations, improving year on year by £37m to generate positive net cash from operations in 2023 of £28m.
The business added it planned to continue “a disciplined focus on building a self-sustaining business for the long term”.
Towards the end of 2023, Gousto launched boxes for one, three and five-person households, which it said made it the only meal kit brand to service all one through five-person households.
So far in 2024, the business has grown the number of weekly recipes to 100 in a bid to broaden mass market appeal, with more plant-based, gluten-free and dairy-free recipes and greater opportunities to customise meals, as well as an increased number of premium and value ranges to cater to all tastes and budgets.
It also – as revealed by The Grocer earlier this month – made a return to supermarket shelves thanks to a partnership with Sainsbury’s.
“We have made good progress in 2023, improving our customer proposition with more recipe choice for more households, whilst also beating our financial expectations,” Boldt said. “But we are still early in the journey and as a pioneer of recipe kits, we will continue to leverage AI, automation and our technology capability to lead innovation in the category as we extend our reach deeper into the mainstream market.”
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