Sofa seller Made.com on Tuesday said at looking at ways to cut costs and raise additional funds, as it lowered its revenue and cash forecast.

Made.com shares were down 38% to 23.95 pence each in London on Tuesday morning.

The company now expects to have between £5 million and £30 million in cash at the end of 2022, down from the £40 million to £65 million it previously had guided. It had £31.5 million at the end of last month, saying this figure reflected high levels of investment in inventory.

The London-based firm cut its outlook for adjusted earnings before interest, tax, depreciation and amortisation to a loss between £50 million to £70 million from a previously anticipated loss between £15 million to £35 million.

Made.com said it is ‘considering options to allow us to strengthen the balance sheet sufficiently to navigate what will undoubtedly continue to be challenging conditions’.

It also plans to cut back spending. ‘Areas of focus include looking at forward stock buying, warehousing and sourcing markets, and reviewing our operational structure and headcount,’ Made.com explained. Headcount refers to the number of employees.

The firm targets to save £10 million to £15 million per year with the measures, though with 2022 result seeing little benefit from this.

Made.com said gross sales in the first half of 2022 were 19% lower year-on-year, though up 55% from pre-virus levels. Continental Europe performed stronger than the UK, posting a 67% growth against the first half of 2019, while UK sales grew 45%.

‘Recent trading has been volatile, and the worsening of consumer confidence has impacted demand for discretionary big-ticket items, making new customer acquisition at financially attractive rates challenging,’ Made.com cautioned.

Profit for 2022 is expected to take a £20 million one-off hit from clearance work related to excess inventory and additional costs in its supply chain.

‘Inflation costs in the supply chain continue at elevated levels, with freight costs remaining higher than expected and the recent implementation of significant fuel surcharges from carriers,’ Made.com explained.

For 2022, Made.com now expects gross sales to fall by between 15% to 30%. It had previously expected an outcome ranging from flat sales to a 15% fall.

Revenue guidance has been lowered to a range of a 9% fall to a 24% fall from between 8% growth and a 7% decline previously.

The company added it has seen encouraging trading following its re-launch into the Irish market.

Copyright 2022 Alliance News Limited. All Rights Reserved.