The owner of Hotter Shoes has warned it expects to post operating losses of up to £1m for its current financial year despite an encouraging start.
Unbound Group said it anticipates it will report an operating loss because of the "challenging short term economic outlook" and non-recurring costs of £700,000 in the six months to the end of July.
In a statement issued to the London Stock Exchange, the group added that it has seen " tougher trading conditions in recent weeks" while the short-term outlook is "very challenging to predict, given the volatility of the economic backdrop and resultant impact on consumer confidence"
READ MORE: Click here to sign up to the BusinessLive North West newsletter
The group added that its medium-term growth targets remain unchanged and that it is still confident but "recognises an increased short-term risk".
It said its focus will continue to be on managing costs, protecting margins and cashflow, ensuring the "appropriate levels of working capital and managing capital investment tightly".
For the six months to the end of July, the group reported a revenue of £27.6m, up from £25m, while its pre-tax losses remained static at £2.1m.
Its operating losses also totalled £347,000 after posting profits of £1.3m in the prior period.
Chief executive Ian Watson said: "Unbound Group has delivered an encouraging first half performance that builds on the momentum of 2021, despite the increased challenges of high inflation and a volatile and unpredictable consumer environment.
"The combination of further growth in sales and gross margins demonstrates the effectiveness of our strategic initiatives and the value that our customers attach to our core Hotter product, giving us confidence despite the market conditions, which have become more challenging in recent weeks.
"We have made good strategic progress in H1 and will continue to focus on efficiency gains and cost management in H2 to protect margins. We are confident in our brand and the benefits that will result from this focus and our continued ability to deliver our strategy over the long term.
"The broader revenue base we have created with the launch of the Unbound platform marks an important strategic shift for the Group.
"However, we remain mindful of the growing pressures on consumer spend. Consequently, we continue to review and adapt to the changing market conditions, maintaining our specialist focus on our core customer demographic of financially resilient 55+ consumers."
READ NEXT:
