Cheeky Panda balsam range

The Cheeky Panda operates across retail, DTC and B2B channels

Eco toilet paper challenger The Cheeky Panda has bounced back into the black and is in a “terrific position for growth” in 2024.

The business, which ships its products from China, was hit hard by soaring sea freight rates in the past two years, but another period of double-digit growth and normalisation of costs has helped it achieve its goal of becoming EBITDA positive in 2023.

Revenues jumped 17% to £12.7m in the year to 31 December 2023 as consumers continued to switch to sustainable alternatives in the household paper category, according to newly filed accounts at Companies House. It comes on top of a 51% increase in the prior year.

New distribution deals across Europe and growth with existing customers in the UK contributed to the performance, while more people returning to the office post-Covid helped a revival in its B2B channel.

As well as the fall in shipping costs, Cheeky Panda’s margins were helped by investment in technology to drive operational efficiencies. Cost of sales fell 36% to £5.3m in 2023, with distribution costs also down year on year.

Adjusted EBITDA leapt from a loss of £4.5m to £670k in the black as a result, with pre-tax profits also climbing out of the red to £145k.

“We couldn’t be prouder of what our team delivered in 2023,” said CEO Julie Chen, who founded the business with partner Chris Forbes in 2016.

“Despite big challenges, such as retailers and distributors going under, channels disappearing and hyper-inflation, we have managed to navigate these headwinds and still grow.

“Being the first company in Europe to offer bamboo paper, we have built a category from our bedroom to a company with 35 employees and an eight-figure turnover. Consumers are still switching away from mainstream brands and into the bamboo category, and there is so much more potential.

“We’ve done well but there is much more we need to achieve. That’s why we are super excited with our growth plans for 2024.”

CFO Tom Mitchell added the company exited the financial year with “great momentum”, with the fourth quarter being the strongest “by some distance”. He expected the trend to continue into 2024 thanks to NPD and market expansion.

“After a turbulent 2022, we’ve had a fantastic 2023,” he said. “I’m delighted we’ve achieved our main priority of turning a profit, while continuing to strengthen our balance sheet.”

The Cheeky Panda strengthened its management team in 2023, appointing a chief marketing officer to build brand awareness and a director of retail to build distribution in the channel.

It also secured £925k in early 2023 through another crowd round to bolster the balance sheet.

The company makes toilet paper, kitchen roll, tissues, beauty and baby wipes, multi-surface wipes, cocktail napkins, flushable handtowels, nappies and straws, all derived from bamboo.