Brand Architekts (BAR) , a challenger UK beauty brand company, released its full year results to 30 June 2023, which showed sales up 41%, expanded profit margins and a strong cash position of £8.2m. Despite this, tough trading conditions meant that the company's losses increased in the period. 

Group sales increased to £20.1 million from £14.3 million, primarily due to acquiring InnovaDerma Plc in 2022. Excluding InnovaDerma, revenue increased by 7%, with strong international sales offset by challenging UK trading conditions. 

Gross profit margins rose significantly - up 6.2% to 39.7% - driven by the full year of InnovaDerma sales, notably Skinny Tan. Despite a tough trading environment, the group reduced its operating loss to £1.2 million due to improved targeted advertising. 

The increased pre-tax loss of £6.8 million, up from £4.1 million in 2022, was driven by a £3.5 million impairment related to Innovaderma's goodwill. But having ended the period with a strong net cash position of £8.2 million, Brand Architekts is well positioned to invest in further growth initiatives.

Having experienced good sales growth in its historical Brand Architekts' Nurture and Harvest brands, the company launched the New Super Facialist Clear Skin line on Amazon and Boots, a D2C site, and in-store merchandising trays, introduced campaigns for Skinny Tan Wonder Serum, and announed plans to launch The Solution Menopause range in 2024.

Quentin Higham, Chief Executive, commented:"Despite the challenging global and domestic macro-economic factors, we have made good progress, successfully integrating InnovaDerma and delivering £1.4m of ongoing Opex savings. The immediate priorities remain driving brand awareness of key invest and nurture brands, delivering revenue synergies through international and domestic expansion, a laser focus on brand contribution and releasing working capital tied up in harvest brands. 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."
 

View from Vox 

Brand Architekts has made good progress in FY23, despite tough trading conditions in the UK as the cost of living crisis continues to squeeze budgets. In response, the company shifted its strategy to focus on brands and products that engender high levels of consumer loyalty, allowing for an increase in sales in the period and delivering stronger margins. 

Looking ahead, the company said it now looks to focus on its 3-year transition strategy, whereby its brand portfolio will be reduced to 9 from 15. This will allow Brand Architekts to focus on margin accretive high performance topically applied products. It also pointed to opportunities to grow online and internationally after successfully integrating InnovaDerma, strengthening its consumer reach and brand engagement.

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