Brompton’s profits were almost wiped out after a challenging year in which the British bicycle maker sold less than expected amid “global economic uncertainty”.
The fold-up specialist, founded in 1975 by Andrew Ritchie, reported pre-tax profits of just £4,602 for the 12 months to March 31, down from £10.7mn a year earlier.
Group turnover fell 5.3 per cent to £122.6mn, largely dragged down by lower sales in the UK and Europe, according to Companies House filings. The company recorded a loss after tax of £1mn.
Chief executive Will Butler-Adams said Brompton had chosen to innovate and invest “through the downturn” for the long term after a recent fundraising round rather than focus on immediate profitability.
The plunge in profits comes after a steady rise in Brompton’s profile in recent years as it grew to become the UK’s largest bike maker. In October, the brand launched the £2,399 G Line, which has bigger wheels than the rest of its line-up and more powerful brakes to handle off-road trails.
Brompton said the drop in sales had been driven by a tough economic climate and “challenges in the cycling industry” following a boom in demand for bikes and cycling products during the Covid-19 pandemic. It added that the company had missed “budgeted sales” and struggled to cut costs swiftly because most of them were fixed.
Butler-Adams said UK consumer sentiment “remains pretty subdued”, although demand continued to be strong in the Asia-Pacific region, particularly in China.
“We’re over the worst of it but we’re not out of the woods yet,” he added, noting that heavy discounting by rivals was starting to diminish, which would be beneficial for Brompton as it does not offer promotional prices.
The privately owned business, which employs 844 staff, raised £19mn in May 2023 in a funding round led by BGF, a £3bn UK investment fund backed by five large banks, to pay down debt and accelerate the brand’s growth.
It sells its products through stores, online, dealers, distributors and franchisees, with exports accounting for 80 per cent of unit sales. It said it continued to see a shift towards more premium products, which had partly offset the fall in revenue as it sold fewer bikes.
However, operating costs rose 15 per cent to £62.7mn, equivalent to just over half its revenues, because of increased spending on staff and marketing relating to its growth ambitions. Bike unit sales reached 84,899, down 8.2 per cent on a year earlier.
Butler-Adams also said that the company had put on hold additional hiring after Labour’s Budget measures in October added hundreds of thousands of pounds to its National Insurance costs.
During the period, the company became a “B Corporation”, a movement that promotes a balance between profits and sustainable business practices.
