MySale Group plc (LON:MYSL), a leading international online retailer, has provided a trading update for the 12 months to 30 June 2021.
Highlights:
· Group underlying EBITDA of A$4.2m ahead of market expectations, an improvement of A$6.9m from the A$2.7m loss in FY20.
· Core Revenue* increased by 14% to A$122.0m (FY20: A$107.2m)
· Group Total Revenue decreased by 4% to A$125.6m (FY20: A$131.0m),in line with management expectations.
· Gross profit increased to A$46.3m (FY20: A$43.9m)
· Continued reduction in cost base to $A42.1m (FY20: $A47.8m)
· Net cash position of $A9.1m. Debt free.
· Exceptional progress made with scaling the marketplace with over 200 brand partners launched onto the new marketplace seller platform with significant new business and revenue momentum into FY22.
*Core Revenue: All Group revenues excluding revenue from legacy inventory.
The Group has successfully executed the strategic initiatives under its ANZ First strategy, outlined in 2019, and has delivered positive underlying EBITDA, ahead of market expectations.
Excellent progress has been made in scaling the Group’s new marketplace seller platform providing access for more than 200 brands and partners focussed on off-price fashion, beauty and home branded merchandise. Management expects that this growth will accelerate at pace, with marketplace revenues expected to increase significantly in FY22, to become the Group’s largest channel. This exceptional growth enables the business to scale without a corresponding investment in inventory.
We also continue to make good progress scaling the amount of selective higher margin own stock inventory, with a focus on buying “width not depth” and adopting a “test and repeat” strategy. This channel represented 16.7% of sales (FY20: Nil) and is forecast to continue to scale in FY22.
There has been a further reduction in the cost base as we continue to simplify the business and scale the low-cost marketplace platform. We anticipate further operational efficiencies in FY22 as we scale the platform whilst delivering cost savings in our distribution centre.
The Group’s counter-seasonal proposition continues to resonate with its international partners and we are seeing an excess of global inventory, however, the reliability and costs of international shipping remains challenging.
While the Group remains cautious on the full year outlook, the Board expects FY22 Group revenues to be materially ahead of current market expectations, driven by this accelerated growth in marketplace revenues. However, in light of the Groups long term growth strategy to drive a greater mix of marketplace revenue, this is expected to reduce FY22 Group gross margin to approximately 31%.
The Group continues to operate from a net cash position. At 30 June 2021, the Group’s cash balance was A$9.1m, with no debt.
Carl Jackson, CEO of MySale, commented:
“I am pleased to report that our successful completion of the strategic initiatives outlined in June 2019 has resulted in the Group delivering an underlying EBITDA of A$4.2m.
We have made significant changes to the leadership team which has delivered immediate results, particular in the Group’s marketplace platform, which has scaled rapidly with the addition of over 200 new sellers. Looking forward, we will continue to scale at pace the number of marketplace sellers, invest in the proprietary platform and further strengthen the management team, underpinning future growth.
We have delivered strong improvements in gross margin as we increase our own-stock inventory channel, adopting a “test and repeat” strategy. We have also maintained strict control of our cost base and anticipate further operational efficiencies as we continue to scale the business.
Given the uncertainty associated with the pandemic, we remain cautious about FY22, however, the progress made over the last year gives us confidence in our ability to build a substantially larger business and deliver our ambition to be the leading ANZ off-price fashion, beauty and homewares marketplace platform. This will be underpinned by capitalising on our large customer base and attractive long-term fundamentals.”
