Booktopia finds path towards $12 million+ earnings boost
Pureplay retailer Booktopia says it has identified several business initiatives it expects will boost its bottom line by between $12 million and $15 million during the next financial year.
In a business update filed with the ASX, the company said the initiatives are a response to “changing consumer sentiment, greater competition online and inflation”.
Product price adjustments will optimise gross margins, realising about $2 million to $3 million in additional annual earnings.
The company has exited its investment in a publishing business called Welbeck ANZ, resulting in a cash payment of $1.5 million. It will also reduce its property/lease obligations requirements, leaving $2-3 million of annualised cost savings.
The company has cut about 35 jobs in an organisational restructuring aimed at reducing costs.
Additionally, the company says it has changed how it recovers third-party delivery costs, which will result in a $4 million to $5 million earnings improvement.
Booktopia’s advertising program will now focus more on high-conversion channels which will help deliver $1 million to $2 million in savings.
Booktopia chairman, Peter George, said the company is focused on building a “profitable, sustainable business” in the interests of all its stakeholders.
“Letting some of our talented staff go as part of these cost-cutting initiatives is a disappointing but necessary step in these economic times,” he said.
The initiatives are expected to position the company for the “challenging online retail conditions” in the near term.
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