In accounts filed on Companies house on October 18 of Rapha’s annual financial statements covering 2023, under Carpegna Ltd, show that the brand closed the year out at an operational loss of £21m, making this the seventh loss-making year in a row for the British cycling brand.
While this is undoubtedly not what the company would ideally like to have, when set against the industry headwinds that have seen layoffs and brands going out of business entirely, maybe the fact that it is still standing is worth celebrating.
While the company closed its annual accounts at another operational loss, it returned to a positive EBITDA (the earnings before taxes and losses). It did, however, report 30,000 fewer new web customers than last year, down to 118k to 148k, and the brand’s member suite - the Rapha Cycle Club (RCC) - dropped in membership by 4,000 from 22k to 18k. It also reported a nearly identical web customer lifetime value.
This loss is also with framing in terms of some behind-the-scenes changes in the business. Two of the brand’s regional distribution warehouses were closed, consolidating the distribution effort into a single national source, with reported claims of efficiencies as well as a significant reduction in overhead costs. This transition reportedly hit the balance sheet to the tune of just under £3m. The brand also appointed a new CEO in August of this year - Fran Millar, formerly of Ineos Grenadiers - though that appointment falls outside the scope of the figures reported here, which run from Jan 2023 to Jan 2024.
A review of the business’s key performance indicators beyond just the headline figures states:
"Against the backdrop of an ongoing turbulent and competitive post-pandemic cycling sector, as well as decreased consumer confidence in several key markets, Rapha has continued to strengthen its core business operations returning to a positive EBITDA pre-exceptional items position."
Drilling into the reported turnover figures there is a reported £8m decrease from 2023. Split geographically the biggest turnover losses were reported in the UK market (circa $4m) and in the Asia Pacific region (circa £3m). This is perhaps due to the cost of living crisis continuing to impact the UK market. The USA/Canada, and Europe markets reported similar turnover figures year-on-year.
For readers concerned about the viability of the company in the near future, an independent auditor’s report on Carpegna Ld’s accounts states that it hasn’t identified anything that ‘may cast significant doubt on the group’s and the company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue’.
