"Difficult" cycling market hits profits at Evans Cycles

The venture capital firm that bought Evans Cycles last year has pumped money into the business after pre-tax surplus fell by two thirds in its latest financial year.

The accounts, which cover the 12 months to 31 October 2015, show that the company’s pre-tax surplus fell by 69.4% to £1.74 million, down from £4.46 million in the previous financial year.

ECI Partners, which bought the business in a deal worth a reported £100 million in May last year has now refinanced the business, reports the Sunday Times [£].

The fall in profits was said to be “due to difficult market conditions experienced in the UK cycling market since February 2015,” according to the accounts of holding company, April Topco.

The accounts added: “ECI Partners LLP has invested additional funds into the business in order to reduce the term loans with its banks.”

Among issues that reportedly affected the business in its 2014/15 financial year were the poor summer of 2015 meaning fewer people were encouraged to start cycling compared to the previous year.

The company, founded by Frederick Evans in South London in 1921, now has 63 stores throughout Great Britain which also provide a click-and-collect service for its growing online operation.

It sells most leading brands and, exclusively, the Hoy Bikes brand launched in partnership with six-time Olympic champion, Sir Chris Hoy.

While Team GB’s success in Rio coupled with Chris Froome’s win at the Tour de France might ordinarily be expected to give a boost to the cycling market, that may not be the case this year.

Consumer confidence has taken a knock due to the result of June’s European Union referendum, with prices of imported goods also starting to rise following the fall in Sterling that has followed the Brexit vote.