Chillisauce blames £648k loss on introduction of new IT system
Chillisauce made a loss of £648k in 2018, blaming the challenge of introducing a new IT platform for its adverse performance in a “year of transition” for the business.
The loss before tax of £648k for the year ending 30 September 2018 was down from a £437k profit in 2017 for the London-based event agency.
Turnover was down from by more than £2.5 million, from £21.3m in 2017 to £18.7m in 2018, according to accounts filed at Companies House. Gross profit was down from £6.1m to £5m in the same period, while staff numbers fell 12 per cent from 94 to 83 last year.
The strategic report accompanying the accounts said: “A new IT platform encompassing the website and back office system was implemented in December 2017 and hence this has been a year of transition for the business.
“The sheer scale of implementing such a cutting-edge new system, which also introduced changes to processes in every area of the business, has been a big challenge and is the reason for the adverse performance this year.”
It also said that the market conditions for corporate events are more challenging and has affected the performance of the business.
The report added that the company expected to start seeing the benefits of the new IT systems in terms of sales and internal efficiencies during bookings taken in 2019.
It said: “During the year the directors made the necessary adjustments required to ensure that the KPIs of the business are now close to, if not at the same levels as they were pre-launch, in particular, the number of sales, passengers and margin per sale. With a date of departure income recognition policy, this performance will flow through to the financial statements during 2019.
“The business is now well placed with the new platform to continue to grow the Stag and Hen business and expand the Chillisauce brand in group travel and experiences.”
The report added that while there are still uncertain conditions in the UK economy, particularly surrounding Brexit, Chillisauce has continued to see an increase in stag and hen overseas bookings and the overall impact of Brexit is expected to be minimal for the business.
Published Date: 09/07/2019