Update on Company Progress (July 2019) – Includes Current Trading and the Latest Developments in the USA & Canada

Current Trading

Management accounts for May have been received and these provide further positive trading figures, reflecting the strong interest seen at optical shows in Milan (February) and New York (March). Combined sales for the UK and USA in the month amounted to £160k, delivering a profit of £44k. Results for the 10 months year-to-date show revenue of £940k and profit of £144k (2018 full year £752k and £139k loss).

Given the year-to-date position, management expect a full year outturn of £1.1m (compared to forecast of £1.2m), delivering a profit of c.£150k compared with the forecast loss of £55k. The positive profitability is aided by the delay in obtaining the funding compared with that forecast and consequent lack of expenditure on additional staff, marketing, etc. included within the plan. Given the lack of marketing spend, the sales figure, at c.90% of forecast, is commendable and represents a 45% increase on the prior year, demonstrating the strong growth potential of the business. This is not expected to impact the forecasts outlined in the Investment Memorandum for 2020 and beyond.

Online sales have seen a significant increase in the past two months, achieving c.30% above expectations. Management attribute this to the appointment of a specialist SEO team member who, in association with strong social media activity, is leading consumers to the K&K website, and they expect this to continue to progress in the coming months.

The new distributor in France, MSK, is now live and seeing good progress.

New Collections

The production schedule for Kirk & Kirk’s new range of shapes and colours has been agreed with the factory. This will ensure that samples are available for the major trade show, Silmo, in September and that delivery of orders received at the show will be achieved shortly thereafter.

The Americas

Jason has spent considerable time in the USA in the past month, meeting with the newly appointed agents and visiting a number of potential new stockists across the country.

Kirk & Kirk now have a full team of 5 reps for the USA and Canada that will be fully operational from September 2019, all of whom are very experienced and well respected in the market. Kirk & Kirk will now have 100% coverage for the territory and management expect this to lead to a significant uplift in sales. During the current year the average coverage has been c.50% of the USA and Canada, up from 30%, and this has led to a 100% increase in sales in the region.

K&K has signed its first stockists in the Caribbean and Central America – Eye Q Optical in Jamaica and Centro Oftalmologico Benitez in Puerto Rico – and this adds to the overall list of recent stockist signings, including the first one in India.

Overseas Investor

A potential overseas investor, looking to invest £200k, has now received confirmation from the Home Office that their visa application has been successful and they now plan to progress with this opportunity.

Instagram

The Kirk & Kirk team have reached 20,000 followers on their Instagram account, providing significantly enhanced profile on social media, where they continue to receive regular interactions from relevant influencers and bloggers.