MySale Group plc (LON:MYSL), the leading international online retailer, has announced its audited final results for the year to 30 June 2020.
Commenting on the results, Carl Jackson, Chief Executive Officer; said:
“It has been a transformative year for MySale, with our operations today very different to last year. We have successfully recapitalised, restructured and repositioned our business, significantly reducing the cost base, enhancing our quality of revenue, increasing product margins, and as of Q4-FY20 we are operating on a profitable, cash generative and debt free basis. The Group is now trading profitability with a cash balance of A$15.9 million as at 31 October 2020.
“Our platform is being used by even more international brands, looking to take advantage of our Southern Hemisphere customer base and the associated counter seasonal inventory opportunity. The Group is now in an excellent position to accelerate the execution of its ANZ First Strategy, scaling the restructured business to deliver operational gearing which will flow through to the bottom line.
“As a consequence of MySale’s focus on its ‘ANZ First’ strategy, the Group is evaluating the potential benefits of dual listing the Group on the Australian Stock Exchange. This review is at a preliminary stage and MySale will keep investors updated should any formal decisions be reached.”
| Year to 30 June (A$ million) | FY20 | FY19 |
| Revenue | 131.0 | 208.6 |
| Gross Profit | 43.9 | 52.4^ |
| Gross Margin | 33.5% | 25.1% |
| Underlying EBITDA* | (2.7) | (18.8) |
| Reported loss before tax | (3.4) | (58.2) |
*Underlying EBITDA is calculated as EBITDA adjusted for certain items including impairment losses/reversals related to goodwill and receivables, share-based payments and unrealised foreign exchange loss/gain
^Delivery costs to customers for the year ended 30 June 2019 of A$33.8 million have been reclassified from Cost of sale of goods to Selling and distribution expenses to be in line with the online retail industry
Progress against strategic initiatives
· Raised A$23.3 million to repay and restructure existing bank facilities, leaving the Group bank debt free and with a year end cash balance of A$6.7 million, operating a negative working capital model
· Underlying EBITDA loss significantly reduced to A$2.7 million (FY19: A$18.8 million)
· Substantial improvement to gross margin, which increased by 8.4 percentage points to 33.5% (FY19: 25.1%)
· Completed cost reduction programme established as part of the restructure and repositioning, with the cost base reduced by 48.1% to A$50.2 million (FY19 A$96.7 million) and rightsizing of the headcount to 123 Full Time Equivalents (‘FTEs’) as of 30 September 2020 (FY19: 307).Capex reduced to A$2.6m (FY19: A$5.0m)
· Significant progress executing the ANZ First Strategy which has delivered significant costs savings and higher margins, ensuring the Group is well positioned to scale its platform
· Strengthened management and board with the appointments of Mats Weiss as Chief Financial & Operations Officer and two new Non-Executive Directors
· Developed MYSALE Solutions, the Group’s proprietary end-to-end technology and operating platform
· Good progress in re-engaging and renegotiating commercial contracts, providing international partners with an efficient counter seasonal solution for their excess inventory
· Closure of the UK and US warehouses and relocation of Australian Fulfilment Centre which has delivered significant cost reductions and improved efficiencies
· Launched MYSALE Way, a new operational purpose for the Group, resulting in improved customer satisfaction scores
· Increased the number of new active international partners; total active partners 982
Post financial year end
· Raised A$9.3 million from entities associated with the founders and former CEO of Catch.com.au, one of Australia’s most successful online retailers
· Further strengthened management team through appointments of new Head of Buying, Head of Marketing and Head of Customer
· Group now operating on a profitable, cash generative and bank debt free basis following post year end capital raise, with net cash balances of A$15.9 million as at 31 October 2020
Outlook
· Trading in the first four months of the current financial year has been profitable and cash positive, underpinned by strong gross margins and a right-sized, scalable cost base
· Decisive actions taken to recapitalise, restructure and reposition the business have left the Group in a stronger, more resilient position
· Increasing the amount of high margin own-stock inventory, adopting a breadth not depth “test and repeat strategy”
· The Group is well positioned to benefit from ongoing supply chain disruption and the continued strengthening of the ANZ off-price channel
· Confident in the resilience of the Group’s inventory-light business model and MySale’s ability to harness the longer-term structural shift from offline to online
Chairman’s statement
I am pleased to say that the last quarter of the financial year was both profitable and cash flow positive. The company is highly focused on the high growth ANZ e-commerce market with the right size cost base and a strong management team with which to deliver future growth.
Throughout the year we have actioned all the key strategic initiatives we set out as part of our restructure and refocus of the business. The opportunity we face is big and the team have all pulled together to transform the business into an inventory light e-commerce technology platform for brand and retail partners both domestic and international to access customers in ANZ.
Like every other company we have faced challenges brought about by the COVID-19 pandemic and our number one priority has been to adapt our working practices to ensure the welfare of our employees. The world of e-commerce has changed off the back of the pandemic and it has caused the structural shift from physical retail to online to accelerate significantly with many people shopping online for the first time. I believe this change is here to stay and e-commerce will continue to see strong continued growth for a long time to come.
During the year we closed our UK operations to refocus on the ANZ market. We also strengthened our balance sheet by raising equity and paying off our debt leaving the Group debt free and cashflow positive (Q4 FY20). We have made changes to our business enabling us to work more efficiently with a lower cost base and in-turn these changes have led to an improved quality of revenue and jump in gross margin to 33.5% (FY19 25.1%). This strengthening of the margin has continued to into the current year.
Trading in the current year has started well and with the continued focus on customer experience and providing brands and retailers with a world class platform to access that customer, we are excited about the journey ahead.
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Charles Butler
Chairman
25 November 2020
