Made.com cuts revenue forecast as furniture is held up by shipping delays

The online furnishings retailer Made.com has slashed its revenue guidance, as it warned that supply chain disruptions and shipping delays would defer up to £45m of its revenue into the new year.

The company said industry-wide disruptions were offsetting the impact of strong demand for its products, with extended factory closures in Vietnam, congestion in global ports and extended shipping times having already delayed deliveries to customers.

Made said those disruptions had “worsened in recent months, negatively impacting the timing of stock intake”.

The pandemic has fuelled shipping and manufacturing delays worldwide. Ships have failed to dock at ports where there have been lockdowns or staff shortages, creating a ripple effect that has affected deliveries across the globe. That is on top of factory closures caused by reduced staffing, local Covid restrictions, or energy shortages amid record market power prices that have forced manufacturers to ration power in the run-up to the Christmas season.

“Due to increased disruptions, Made now anticipates a greater proportion of revenue to be delayed to early 2022, with a corresponding higher level of deferred revenue for 2021,” the retailer said in a trading announcement on Thursday.

The London-based company has now slashed its 2021 revenue guidance to £365m-£375m, saying that £35m to £45m of its sales would be realised next year when items eventually reach customers. Made has previously forecast revenues of £410m for the year.

Made also said adjusted profits would also take a £12m-£15m hit in 2021, with those earnings similarly pushed into 2022. However, it assured there would be no impact on its cash position. Its full earnings for the year will be released on 6 January.

The revenue downgrade sent shares in the company down more than 15% on Thursday morning to 114.2p each. The shares are trading well below a flotation price of 200p in June.

This is despite Made issuing guidance for a 40% rise in annual gross sales to about £440m for the year and reporting a strong performance in the second half of 2021, including successful sales during cyber week at the end of November.

Made tried to assure investors it had built up its stock of furniture, and focused on warehousing and logistics, to ensure it could get items to consumers much quicker from 2022 onwards. “Additionally, supply of goods from Vietnam has now returned to close to normal levels, with all key suppliers now operational,” the company added.