The Booktopia Group Ltd (ASX: BKG) share price has gone up 10% in reaction to an update.
Booktopia is the largest Australian-owned online book retailer by market share. Since FY12 it has sold more than 32 million items. Not only does it sell books, it also sells e-books, DVDs, audiobooks, magazines, maps, calendars and so on.
Booktopia’s update
The company has given an update for the FY21 first half.
Booktopia said that it has continued to experience strong demand for its products throughout the Christmas period with recent investments in additional automation and the increased capacity of its distribution centre providing the foundation for a record month and record half-year.
The ASX share said that it achieved its strongest December in its history with 738,000 units shipped during the month and 4.2 million units shipped in the first half.
Booktopia revealed that its revenue rose by 52% to $113 million. There was an even stronger increase in EBITDA (EBITDA explained) – adjusted for IPO costs – which rose 506% to $8 million.
Company comments
Booktopia said that the increase in trading volumes is similar to what other online retailers have seen as the shift towards online shopping continues.
Leadership warned that this result shouldn’t be relied on for what the full year result will look like.
Booktopia CEO Tony Nash said: “The Christmas period saw strong demand from customers. Our investment in additional capacity and automation allowed us to meet customer orders in a timely fashion.
“We are confident the momentum and growth we experienced in 2020 should continue throughout the year and beyond as a result the business is on track to meet forecasts provided in the company’s prospectus.”
The first stage of the company’s $20 million expansion and automation project at the Lidcombe Distribution Centre in Sydney was completed in November and increased outbound capacity from 30,000 units to 60,000 units per day.”
Summary thoughts
Booktopia sales are clearly booming. With the shift to online, it’s in a good spot to keep growing market share of Australia’s book sales. But how long will the elevated sales last? I don’t know, but I think Booktopia could be one to keep watching.
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