tcb have just published their accounts for the year to 31 Jan 2012 (figures in brackets are for the previous year):
TURNOVER £21,185,788 (£15,511,786)
Costs of sales £18,335,076 (£13,835,296)
GROSS PROFIT £2,850,712 (£1,676,490)
Admin expenses £1,252,329 (£684,470)
OPERATING PROFIT £1,598,383 (£992,020)
Interest etc £65,181 (£50,217)
Exceptional items £1,074,255 (£0)
PROFIT BEFORE TAX £589,309 (£1,042,237)
Corporation Tax £101,773 (£281,200)
PROFIT FOR YEAR £487,536 (£761,037)
The two directors received £318,500 in remuneration and dividends.
From a corporate point of view, it shows tcb to be a successful, growing company with decent profits. Well done, tcb
A few observations...."Cost of sales" will largely consist of payments to members. Whether it includes anything else of significance is not stated. e.g. the £10 tell-a-friend payments must amount to quite a bit; these may or may not be included in that figure. Anyway, the gross profit (difference between income received and amount paid to members) has increased from £1.67m to £2.85m
Despite that, the pre-tax profits have actually gone down from £761k to £487k, for two reasons:
- Overheads have nearly doubled from £684k to £1.25m
- In addition, there is an "exceptional item" in the form of an advertising campaign costing over £1m
I was slightly surprised to see advertising be categorised as an exceptional item, but then again I'm not an accountancy expert and if it truly is a one-off then I guess that makes sense.
And no doubt this money spent on advertising makes sense for tcb in terms of their strategy and objectives; I expect next year's accounts will show a significant revenue increase as a result of this investment. Quidco invest similar amounts in advertising and we ought to be grateful to both for the extent to which this helps push the cashback concept in general.
I think imutual should tread a different path though, and actually make it a USP of our company that we spend minimal amounts on advertising. Surely it's better for us to rely on word-of-mouth recommendations by our members, so we can pass on the maximum amount of our income as cashback. That strikes me as a very "mutual" approach
As shown in our latest accounts, our own overheads for the year were £37,430. Of course, quidco's and tcb's admin expenses help to pay for staff who develop new features and negotiate some really good deals. As imutual grows we will also have to accept increasing costs as a means to generate more money-saving opportunities for our members. But I'd like to see if we can contain those costs as much as possible so that we pass on the maximum benefit to you; perhaps by getting your help with aspects of the site, as with our shares-for-posting-deals initiative.
By way of comparison, quidco's results to 31/7/2011 were as follows:
Turnover £43,471,693 (£32,077,869)
Cost of sales £37,956,412 (£28,929,081)
Gross profit £5,515,281 (£3,148,788)
Admin expenses £3,682,468 (£2,216,402)
Operating profit £1,832,813 (£932,386)
Interest £22,223 (£11,027)
Pre-tax profit £1,855,036 (£943,413)
I hope this is of interest. The purpose of posting these is not to be critical of competitors but to ask the question: "If we could achieve a similar size, what would we do differently?" BTW if the answer is "nothing" I may as well pack up and go home!
Anyone got any thoughts / comments?