ProCook downgrades FY guidance after weaker trading

ProCook tumbled on Friday after the kitchenware retailer cut its full-year guidance following weaker-than-expected trading in recent weeks.

The company, which typically sees a much stronger second half due to Black Friday and Christmas, said that at the time of the second-quarter update in October, it was encouraged by the "much-improved" trading run rate as it exited the quarter.

"However, in the recent weeks since, we have seen weaker sales performance than we anticipated, with softer consumer demand driven by the challenging consumer environment," it said.

As a result, it now expects FY23 revenue of between £60m and £65m and for underlying pre-tax profit to be around breakeven, down from previous guidance of £4m to £6m.

ProCook said it had been hit by a continued softer year-on-year sales performance, heightened costs due to shipping and foreign exchange impacts, additional marketing and promotional activity, and investment in its operational teams to serve higher volumes.

"In this context, we have developed a clear plan to maximise our trading performance and profitability," it said. "We are beginning to see the benefits of lower shipping costs in new product intake which, together with cost reductions that we have agreed with our suppliers, will support a recovery in our gross margins next financial year."

The group has also started taking action to cut operating costs by £3m on an annualised basis, through a reduction in board costs, efficiency savings to bring down logistics costs, and a range of identified procurement and cost reduction initiatives.

"We are confident this plan will enable us to emerge stronger from this difficult trading environment to become the customers' first choice for kitchenware," it said. "The group remains well placed to capture increased share of the large kitchenware market and deliver long term growth and value to all stakeholders."

At 0900 GMT, the shares were down 15% at 28p.