Ribble Cycles halves losses to £2.3m as bike brand says “very positive step” result of better delivery times and restructuring

Ribble Cycles’ latest accounts have revealed that the company halved its losses to £2.3 million during the latest financial year, as the Preston-based bike manufacturer says increased customer confidence, brought about by improved delivery times and supply chain performance, along with a prolonged restructuring and “right-sizing” process, represent a “very positive step on the journey to returning the business to profit”.

The annual financial report and statements for Ribble’s parent company Cyclesport North Limited show a loss after taxation of £2,332,463 for the year ending 5 November 2023, compared to its operating loss of £4,970,133 for 2022.

The company’s annual turnover, meanwhile, grew by £2.4 million to £28,458,571 and gross profit increased by almost 17 per cent to £8.6 million.

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In his business review for 2023, Ribble CEO Andy Smallwood said the manufacturer’s improved performance owed to a period of restructuring and the implementation of more “robust” delivery times for customers, strengthened by the easing of Covid-era supply chain disruption.

“The business has gone through a period of restructure to right-size and operate at an efficient and economic manufacturing level and thereby reverse the losses seen in FY22 and get back to profit for the future,” Smallwood said.

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“Overall, the company halved its operating loss to £2.3m, which is a very positive step on the journey returning the business to profit.

“During the FY23, there was a restructuring of the company’s funding from its shareholders with an injection of additional loan finance with a conversion of loan debt into equity. This has considerably strengthened the balance sheet, and at 5 November 2023 the company has positive net assets of £2.8m.”

Smallwood also noted that 2023 saw “the challenges faced post the disruption caused by the Covid years start to ease, with much stronger supply chain performance and, as a consequence, better delivery dates for customers and more certainty giving them confidence to buy.”

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The issue of uncertain, lengthy delivery times has plagued Ribble in recent years, with Smallwood noting last year that the company was keen to “rebuild” confidence with customers.

Through a number of interviews and statements given to road.cc and other publications since 2021, Ribble appeared to almost constantly find itself defending long lead times for new models and delays in delivering bikes that customers had already pre-ordered or paid for.

In early 2021, Ribble’s Commercial Director David Stacey said the company was being “crippled” by shipping delays and container shortages brought about by the pandemic amid high demand, which negated a buffer in stock built up around multiple Brexit timing points, including the introduction of new tariffs and customs charges.

In December of 2021, some Ribble customers complained about a lack of communication around delivery delays, saying they were being notified of further delays less than 24 hours before stated delivery dates.

Ribble responded by saying it had “invested significantly” in its customer service team to make its communication channels “more robust”, and created a dedicated section of its website pulling together ‘Best Availability’ bikes with the earliest dispatch dates.

Nevertheless, complaints about lead times at Ribble surfaced again in May last year, with some customers saying their expected delivery dates had been pushed back without any notification.

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However, Smallwood stated in the company’s latest annual report that renewed and improved customer confidence with the brand was responsible for the company’s growing turnover in 2023.

The CEO also noted that with supply chain predictability and availability continuing to improve, and with “further production efficiency gains”, the company is “now in a position to offer robust delivery dates for customers within a target 2-3 week window”.

“The hard work in F23 to significantly improve the performance of the business will continue into FY24,” Smallwood added, noting that the business has “effectively” managed its post-Covid overstock situation and has entered 2024 in a “significantly better position”.

“Macro-economic challenges for the consumer, together with over-stocking being experienced in the marketplace, generally continues to put pressure on retail pricing, but with continued brand investment underpinning the product, the business continues to benchmark itself at the premium end of the marketplace, and with a strong trading message it is encouraging to see strong Q1 unit sales performance.”