Results from retail and hospitality business services provider Christie Group (CTG) show the company’s post-Covid recovery is continuing apace.
Revenue growth of 13% to £69.2m delivered a 5% increase in operating profit to £5.5m, which the company said it had achieved despite the withdrawal of £2.6m in Government furlough support received in 2021 and higher costs.
Importantly, strong cash generation meant the group was able to reduce its pension deficit and repay a £2m Covid loan, leaving it on track to eliminate all long-term debt by the end of June. That, it said, would leave it free to invest in growth and further increase dividends to shareholders, after paying out 375p during the year.
The speed and extent of the recovery is all the more impressive given the extent to which trading was disrupted by the pandemic, especially in its respective retail and hospitality stocktaking businesses, Orridge and Venners.
Although the division remains loss-making – albeit at a reduced level, with stocktaking activity yet to reach 2019 levels - business activity is rising. Venners, for example, won a record level of new corporate business and returned to profitability during the year, with stock audit volumes 50% higher than in 2021.
Similarly, Orridge saw an 18% jump in stocktaking jobs over 2021 levels, and successfully won several new clients for supply chain services. Its SaaS ticketing and visitor-management solutions business, Vennersys, also had a good year, with revenues from its clients' own e-ticketing admissions and online sales hitting at 277% of their 2019 levels.
Meanwhile its professional services division – which provides a range of services including consultancy, corporate finance, valuation and insurance broking – enjoyed another year of growth, delivering operating profits of £7.6m on sales up 8% to £47.5m. Although it sold slightly fewer business – 1,057 versus 1,069 in 2021 – it did so at fees an average of 14.4% higher, whilst also increasing the number of valuations conducted from 3,705 to 5,515.
The company now plans to invest in developing its online stocktaking offer to align itself with higher levels of ecommerce retailing, as well launching supply chain services in Europe, and has increased headcount across the business to meet rising demand.
Chairman and Chief Executive David Rugg commented: “Despite some continued negative political and economic headwinds, we regard our future opportunities with optimism. As in previous years, we anticipate a year with a stronger second half weighting. We believe we have the right mix of services, the right people and the right commitment through a challenging and supportive culture to complete the recovery of the Christie Group and drive its constituent companies to new heights in the years ahead.”
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Christie’s focus on hospitality and retail unsurprisingly meant business was badly affected by the pandemic, but having steered a course through such a tricky period it’s now well positioned to help its clients deal with ongoing challenges in those sectors return to business as usual.
In particular, the ongoing supply chain crisis means retailers are seeking ever more efficient ways to operate their supply chains, while inflationary pressures mean more business are looking to protect margins through tighter inventory management.
Simultaneously, although economic activity appears to be broadly recovering, Christie’s corporate finance also offers a hedge should the economic backdrop take another unwelcome twist. The company said that last year the consultancy division engaged in a number of independent business reviews as distressed activity returned to the hotel sector.
With its balance sheet in good shape, giving to the firepower to invest in further growth, and the business realigned to create opportunities by improving collaboration across its divisions, the company offers investors the opportunity to tap into scope for significant further recovery.