Rapha, a name synonymous with high-end cycling apparel and lifestyle, is currently navigating a complex financial landscape that underscores the importance of intangible assets, especially goodwill. This non-cash asset, which arises during acquisitions, plays a pivotal role in Rapha’s financial health yet has also contributed significantly to the company's reported losses in recent years. With goodwill valued at over £100 million, the annual amortization expense of £12 million has placed a considerable strain on their financial performance, masking some of the underlying strengths of the business.
Despite facing significant financial challenges, Rapha has managed to achieve positive EBITDA in select years, such as 2021, demonstrating...