Kogan.com and Brisbane’s QBD Books get a read on Booktopia

Kogan.com and Brisbane’s QBD Books have already flagged their interest in the ‘urgent’ sale process for collapsed online bookseller Booktopia

Booktopia was placed in voluntary administration this week, prompting McGrathNicol to call for urgent proposals to buy or recapitalise the business.

Kogan.com and Brisbane’s QBD Books have already flagged their interest in the “urgent” sale process for collapsed online bookseller Booktopia, and looking at the QBD accounts, you could argue they offer a safe pair of hands.

Booktopia had a shocking 2022-23 financial year, posting a net loss of $29m, with revenue falling 18 per cent to $197.6m.

It’s become even worse since then, with the company in February downgrading its expected full-year EBITDA from $13.5m to just $1m-$3m.

And that was before the company was placed in voluntary administration this week, prompting McGrathNicol to call for urgent proposals to buy or recapitalise the business.

While the Booktopia business has been on the slide due to issues including teething problems at its Sydney customer fulfilment centre, rival QBD chalked up a decent result in 2022-23.

The private bookseller made a net profit of $2.7m, up from $2.1m the previous year, on revenue of $147.7m, up strongly from $129.9 in 2022.

The company paid an 11c dividend, opened two new stores and expanded another during the year.

“The current economic environment is impacting the retail sector. However, the effect on the company’s operations and cashflows in future financial periods is not expected to be significant,’’ the company says in its financial report.

The company’s balance sheet shows current liabilities outweigh assets by about $3m, and the company’s net asset position has deteriorated by about the same amount, with about $16m in current liabilities made up of leases.

On the upside the company has positive operating cashflow os $27.4m and is looking forward to another year of solid trading.

The Booktopia assets, including the fulfilment centre and substantial brand awareness, would be a natural fit for QBD.

The current owners of QBD, Cover Syndicate, bought the company in October 2016, and have since grown store numbers from 55 to about 90.

QBD was named one of Australia’s best-managed companies by Deloitte Private last year.

Chief executive Nick Croydon said at the time that diversification and technology would play a key part in the company’s future.

“QBD Books has a long and proud history of integrating with technology,” Mr Croydon said.

“From our earliest days, we have invested heavily in custom development resources and it has led to positive results with increased engagement and improved efficiency.”

Mr Croydon said the company was also looking at the role artificial intelligence could play in the business.

Originally published as Kogan.com and Brisbane’s QBD Books get a read on Booktopia