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Brompton's profits were nearly wiped out after a challenging year in which the British bike maker posted lower-than-expected sales amid “global economic uncertainty”.
The fold-up specialist, founded in 1975 by Andrew Ritchie, reported a pre-tax profit of just £4,602 for the 12 months to March 31, down from £10.7mn a year earlier.
The group's turnover fell by 5.3 per cent to £122.6mn, largely dragged down by lower sales in the UK and Europe, according to Companies House filings. The company recorded a loss after tax of £1mn.
The results mark a sharp decline in the fortunes of Brompton, which in recent years has grown to become the UK's biggest bike maker and in October launched the £2,399. G Linewith larger tires than the rest of its line and powerful brakes to handle off-road trails.
Brompton said the decline in sales was driven by the difficult economic situation and “challenges in the cycling industry” following the growing demand for bicycles and cycling products during the Covid-19 pandemic. It added that the company had missed “budget sales” and was struggling to cut costs quickly because many of them were fixed.
The private enterprise, which employs 844 staff, has raised £19mn in May 2023 in funding led by the BGF, a £3bn UK investment backed by five major banks, to pay the debt and speed up the growth of the brand.
It sells its products through stores, online, retailers, distributors and consumers, with sales outside 80 percent of the sales unit. It said it continued to see a shift to more premium products, which offset the fall in revenue as it sold fewer bikes.
However, operating costs rose by 15 per cent to £62.7mn, which is about half of its revenue, due to increased spending on staff and sales in line with its growth ambitions. Sales of bicycle units reached 84,899, down 8.2 percent from the previous year.
During this time, the company became a “B Corporation”, a movement that promotes balance between profits and sustainable business practices.
Brompton did not immediately respond to a request for comment.