MySale Group plc (LON:MYSL), a leading international online retailer, has provided a trading update for the 12 months to 30 June 2020.
Highlights:
· Revenue of A$131m, in line with management expectations, following strong Q4 trading
· Positive underlying EBITDA in Q4 and cash flow positive
· Significant reduction in cost base (FY20 $A49m versus FY19: $A91m)
· Net cash position of $A6.6m. Debt free
The Group has made continued progress with its ‘ANZ First’ strategy over the year, despite the more recent disruption caused by the onset of COVID-19 and national lockdowns in the ANZ region.
Encouragingly, the Group traded in line with management expectations, returning to positive underlying EBITDA in the final quarter of the year. This follows increased revenues with the simplification of the Group’s business model and reduction and alignment of the cost base.
An improvement in the quality of brands on the Group’s websites has contributed towards an increase in the average order value (AOV) per transaction in the final quarter. In addition, there has been a significant reduction in the delivery losses as a result of the restructuring of the Group’s international supply chain and improvements to its proprietary marketplace platform.
The Group’s counter-seasonal proposition continues to resonate with its partners, with the focus on working directly with branded fashion, footwear, accessories, home, health and beauty partners. The flexibility of the proprietary marketplace platform allowed the Group to optimise the shift in its traditional channel mix as it experienced an uplift in demand for homewares and other household categories during the lockdown.
Following the initial onset of the COVID-19 pandemic, the Group experienced significant and varied disruptions to business operations, all of which were managed to ensure business continuity. The supply of inventory was disrupted as was the reliability of international shipping. The Group continues to expect long-term increased interest from domestic and international brand partners seeking a counter-seasonal proposition to sell off-price inventory through a third party channel into ANZ.
Although it is early days and the board is conscious there are still significant risks to the business from the ongoing COVID-19 pandemic, it is pleasing to see the Group’s continued strong trading for the start of the current financial year.
The Group continues to operate from a net cash position following the decisive actions taken by management in 2019 and ongoing cash preservation and cost saving initiatives. At 30 June 2020, the Group’s cash balance was A$6.6m, with no debt.
Carl Jackson, CEO of MySale, commented:
“Despite the disruption and challenging environment caused by the COVID-19 pandemic, we have continued to accelerate our ‘ANZ First’ strategy over the second half and are beginning to see the results of our decisive actions, achieving profitability for the first time in two years in the final quarter of the year.
“The MySale proposition continues to resonate and become increasingly relevant for our current and potential international brand partners, offering a counter-seasonal proposition as they seek to clear inventory built up as a result of economic disruption caused by COVID-19.
“Whilst there has been a significant shift to online, digital sales only represented 12%* of total Australian retail sales for the month of March. As a business, we are well positioned to take advantage of the accelerated shift to online, serving our brand partners’ needs as we focus on the off-price fashion and homeware categories. We have a very focused strategic direction, led by a dedicated and experienced management team, and look forward with confidence.”
*Australia Post Inside Australian Online Shopping 2020 eCommerce Industry Report
