Procook Shares Plunged 15.9% on Q2 Results, Cautious FY Outlook

The Procook Group PLC (LON: PROC) share price plunged 15.9% after releasing its Q2 trading results for the 16 weeks ended 15 October 2023. The kitchenware company noted that its like-for-like sales fell 1.8% to £15.0, while its total revenues also fell by a similar margin to £15.7 million.

However, when considering the continuing business basis and excluding the impact of exiting Amazon EU in the previous year, revenue showed a positive trend, increasing by +0.8%. The improvement was associated with a modest gain in the UK market share.

Notably, both e-commerce and Retail channels saw improvements compared to the first quarter, where revenue had experienced a steeper decline of -7.9%. Furthermore, there has been a noticeable shift towards physical retail stores over the past two years.

The Q2 results were significantly influenced by the strong performance during the Summer Sale in July and August. Benefiting from more favourable weather conditions compared to the previous year, the company observed a boost in sales during this period. 

However, the September and early October outlook indicated a softer trading environment. Factors contributing to this shift included reduced footfall and traffic, with customers increasingly seeking value and promotional offers.

For the first half of the year, the company reported revenue of £26.3 million, marking a year-on-year decrease of -3.8%. First-half revenue showed a year-on-year decline of -4.4% on a like-for-like basis. Although this represents a decrease, it's an improvement compared to last year, where first-half revenue fell by -16.2%. 

The year's first half has seen significant progress in achieving the company's strategic priorities. Notable developments include the launch of phase one of the new Electricals range in August, the transition to a new website in September, and the launch of brand campaigns featuring celebrity chef Matt Tebbutt.

Historically, the company generates approximately 60% of its full-year sales in the second half of the financial year. As it approaches the peak trading period, the company is well-prepared with strong product availability and planned offers.

However, it's important to note that the Board maintains a cautious outlook for fiscal 2024. This caution stems from the highly challenging market conditions that persist, along with recent trading volatility and sales trends over the past few weeks. 

Procook share price. 

The Procook (PROC) share price plunged 15.85% to trade at 18.47p, from Thursday’s closing price of 21.95p.