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Online bookseller Booktopia (ASX: BKG) is on a high this morning after announcing an expected 506 per cent increase in earnings to $8 million in the December half, buoyed by strong e-commerce demand and a capacity scale-up in November.
The unaudited results sent Booktopia shares soaring 11 per cent to $2.95 each in early trading, returning to levels seen amidst the hype of the company's listing last month after an IPO at $2.30 per share.
Around half of the $43.1 million in IPO proceeds were used to fund an expansion and automation upgrade at Booktopia's Lidcombe Distribution Centre in Sydney, with stage 1 completed in November to increase outbound capacity from 30,000 units to 60,000 units per day.
This infrastructure boost came just in time for the busy Christmas period, with Booktopia notching the highest December volume in its 16-year history with 728,000 units shipped.
Volume shipments over the six months were up 40 per cent year-on-year at 4.2 million units, but revenue rose 52 per cent to $113 million.
Booktopia CEO Tony Nash said the unaudited results indicated the business was trading well, showing it was able to quickly adapt and take advantage of the increasing shift to online shopping.
"The Christmas period saw strong demand from customers," he said.
"Our investment in additional capacity and automation allowed us to meet customer orders in a timely fashion and ensured we were able to have the biggest December in the history of the company.
"We are confident the momentum and growth we experienced in 2020 should continue throughout the year and beyond and as a result the business is on track to meet forecasts provided in the company's prospectus."
However, the company cautioned that first half performance should not be seen as an indication of the potential full year result, given the uncertainty around further COVID-19 lockdowns and the success of the vaccine rollout at home and abroad.
In its prospectus, Booktopia forecast revenue of $204.5 million for FY21 along with a $5.2 million EBITDA.
The group said the increase in trading volumes compared to the previous year was consistent with other online retailers, and a continuation of the shift towards online shopping experienced throughout 2020.
Data released by eStore Logistics recently showed a 33 per cent year-on-year increase in sales of books, CDs and DVDs in December, while major retailers such as Accent Group (ASX: AX1), JB Hi-Fi (ASX: JBH), Super Retail Group (ASX: SUL), MyDeal.com.au (ASX:MYD), Premier Investments (ASX: PMV) and Universal Store (ASX: UNI) all saw significant digital sales spikes in the last half of 2020.
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