Redbubble in the black for the first time
Australian online print and promotional products portal Redbubble has posted a profit for the first time since its IPO, as it aims to quadruple its revenue to hit $1bn in sales.
The business, founded in Melbourne by three friends in 2006, and floated on the ASX in 2016, had an operating EBITDA of $3.8m in the 2018-19 financial year – a turnaround from its $3.8m loss in FY2018 of $7.7m, and in line with last year’s forecast of a $2m-4m profit in FY2019.
The group aims to reach $1bn in revenue over the long term, four times its current income.
This year a 41 per cent boost in marketplace revenue took annual sales to $257m over the financial year. This was helped by TeePublic, which RedBubble bought last year to expand its US footprint. It also increased margins.
As at the end of FY2018, the Group had, in aggregate, $75m of losses which it says remain in existence for taxation purposes. During FY2019 there were 5.7 million active members on Redbubble.
The company said that marketplace revenue growth has been driven by the accelerating TeePublic business. It said results from strategic investments are laying the groundwork for a return to healthy topline growth.
“The Group continues to strengthen gross margins leveraging scale and localisation benefits in fulfillment and shipping along with pricing optimisation to increase its effective take rate,” the company said.
According to RedBubble, TeePublic’s acquisition for US$41m ($57.7m) last year has helped improve supply chain and margins.
Marketing spend for the year was 10.5 per cent, below many of its competitors. Its iOS app saw a 140 per cent growth over the financial year, and work is underway on an Android version; the app, however, only accounted for eight per cent of Redbubble’s marketplace revenue in the fourth quarter of FY2019.
RedBubble provides a platform for artists to sell their work on products such as T-shirts, caps, and phone cases, and partners with printers to produce and sell custom products around the world.