Brompton, the renowned folding bike manufacturer, has reported a dramatic decline in profits, with its pre-tax earnings for the year ending April 2024 plummeting to just £4,602, down sharply from £10.7 million in the previous year.
According to the company’s latest financial filings, the bike maker’s profits were equivalent to the retail price of only two of its P Line folding bikes, underscoring the scale of the downturn. This represents a significant drop from the £10.7 million in pre-tax profits recorded in 2023, £7.3 million in 2022, and £9.6 million in 2021.
In a statement accompanying the accounts, Brompton’s CEO, Will Butler-Adams, attributed the profit slump to a “challenging year” marked by lower-than-expected sales. The company sold nearly 7,000 fewer bikes than anticipated, with total unit sales falling from 91,875 in 2023 to 84,899 in 2024. The decline, he noted, was largely driven by global economic uncertainty and broader struggles within the cycling industry.
“The decrease in profit margin is primarily due to missing our budgeted sales targets, coupled with the difficulty of reducing fixed costs in response,” Butler-Adams explained.
The company’s turnover also experienced a 5.3% drop, falling from £129.4 million to £122.6 million during the same period. Other contributing factors included an increase in staff, from 805 employees to 844, alongside rising marketing expenses and additional investments in research and development.
Butler-Adams also pointed to ongoing challenges in the cycling market, stating, “The industry is still in turmoil and won’t improve this year. While it won’t be as severe as 2024, there is still excess stock in the market.”
Despite the financial setback, Brompton remains financially robust, thanks to a £19 million cash boost from an equity fundraise. The company’s net assets stood at £65.1 million at the close of March 2024. Butler-Adams described the share sale as a strategic move to strengthen the company’s balance sheet, positioning Brompton to weather the current industry challenges and capitalize on future opportunities.
“We are taking a proactive approach to navigate through this uncertainty,” he added. “Our aim is to remain resilient and seize opportunities even amidst challenging times.”
Earlier in the year, Brompton also became a certified B Corp, meeting high standards of social and environmental performance. However, the CEO acknowledged that the company had been impacted by the post-pandemic downturn in trade, admitting that instead of growth, the company was “pretty much flat.”
“Business is about being agile,” said Butler-Adams. “You have to respond to what’s happening and be careful with your resources. We’re still investing heavily, but we’re being mindful to spend less and put some projects on hold. You can’t do everything.”
Brompton declined to comment further on its most recent financial performance.
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