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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mysale Group Plc | LSE:MYSL | London | Ordinary Share | JE00BMH4MR96 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.255 | 1.51 | 3.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
TIDMMYSL
RNS Number : 7682R
MySale Group PLC
26 September 2017
MySale Group plc (AIM: MYSL) (the "the group"), the leading international online retailer, is pleased to announce its audited preliminary results for the year to 30 June 2017.
Hot Features
Premium
Year to 30 June (A$ million) FY17 FY16 change
------------------------------- ------ ------ -------
Revenue 268.4 252.3 +6%
Online Revenue(1) 238.7 217.9 +10%
Gross Profit 76.0 66.7 +14%
+191
Gross Margin 28.3% 26.4% bp
Underlying(2) EBITDA 8.7 5.5 +59%
Underlying profit before tax 3.3 1.1 +226%
Reported profit/(loss) before
tax (1.5) 0.2
Underlying basic earnings
per share (cents) 2.5 0.4 +500%
Financial highlights
-- Underlying basic earnings per share increased 500% to 2.5 cents -- Underlying EBITDA increased by 59% to A$8.7 million -- Gross profit increased 14% to A$76 million, as gross margins increased 190bp -- Online revenue grew by 10%, to A$238 million, driven by the growing active customer base -- Group revenue grew 6% to A$268 million (CER(3) growth 9%) -- Underlying profit before tax increased 226% to A$3.3 million (FY16: A$1.0 million) -- Reported loss before tax of A$1.5 million (FY16: A$0.2 million)
Strategic highlights
-- Technology, supply and customer developments significantly strengthen our capability -- Expansion of our marketplace platform -- Creation of our Endless Aisle concept to leverage platform and supply-side strengths -- Further long-term partnerships formed with notable global retail brands -- M&A activity increased and Identity Direct acquired at end of the year
Technology highlights
-- Accelerated investment into our data-driven proprietary technology -- New platform launched including a scalable and flexible marketplace
to leverage the large customer database
-- Single live view of all global inventory available to all websites -- Launch of Ourpay a proprietary 'buy-now, pay-later' payments system
Operational highlights
-- Active customer base like-for-like increase of 11% to 0.9 million -- Including Identity Direct active base now increased to 1.0 million -- Strategic plan to increase own-buy inventory continues - now 17% of online revenue -- Integration of Identity Direct business progressing ahead of schedule
KPI's
-- Continued focus on activating customers with higher lifetime-value
o Average order value (AOV) stable at A$87
o Robust average revenue per active customer A$292
o Steady average frequency of 3.3x
-- Mobile activity continues growing and represented 59% of orders -- Returns rate remains at low level of only 5%
Outlook
-- Good start to current year - revenue growth accelerating and underlying profitability growing strongly
-- Underlying EBITDA for the year expected to be at least in line with upper end of market expectations
Carl Jackson, Chief Executive Officer commented;
"We are very pleased with the group's progress during the year and the improved financial performance, which delivered significantly increased underlying EBITDA. Sustained focus on our strategic goals has delivered yet another year of growing revenue and, more importantly, increasing profitability.
"Our new partnerships are testament to the strength and quality of our international marketplace platform demonstrating further progress in our strategy of working with global brands and retailers to provide our customers with unrivalled value as well as the best possible choice and service. Our partners include some of the largest, most successful international fashion, sports and general retailers.
"There is a structural shift underway in how online and offline retail brands manage their inventory cycle with increased integration and efficiency key criteria. MySale's established international platform is uniquely placed to partner with these brands and deliver the integrated inventory solutions and new sales channels that they seek.
"Investment into our proprietary technology has accelerated and this year saw the launch of a brand new platform which will support all the group's activities, including marketplace, in the future. This enhanced, data-driven, platform transforms our opportunities with brands and customers. We have a fully customisable, integrated proposition for brands to seamlessly support all their needs. We have even greater data insights to our customers' needs and now they have access to our 'Endless Aisle' with an even greater choice of products at compelling discounted prices.
"The Endless Aisle combines our increasingly long tail of inventory, now over 300,000 SKU, with our new, single live view of that global inventory, to which all our websites are linked, providing increased customer choice and merchandising opportunities.
"We also launched Ourpay the group's proprietary 'buy-now, pay-later' payment solution. This further enhances our value proposition and initial experience suggests it is popular with our customers. We anticipate we will see further take-up within our own customer base and also have the potential strategic option to leverage Ourpay, as a standalone product, with others. We shall shortly launch a subscription-delivery model for customers which will be fully integrated to the Ourpay platform.
"We carried good momentum into this year and have a number of exciting strategic initiatives that will support our continued growth in revenue and profitability. This year has started well with revenue growth accelerating from last year and strong growth in underlying profitability. Whilst our peak trading period is still ahead of us we expect that underlying EBITDA for the year will be at least in line with the upper end of market expectations."
(1.) Online: the group's online web-based retail activities (A$238 million of total group revenue A$268 million)
(2.) Underlying: is the group's EBITDA, profit after tax expense or earnings per share calculated having excluded certain expenditure of a one-off, non-trading or non-cash nature in order to allow clearer understanding of the underlying performance of the year. Full details are contained within Notes 6, 7 and 27 to the financial statements. EBITDA: earnings before interest, taxation, depreciation and amortisation
(3.) CER: measure of annual growth based on constant exchange rates
Enquiries:
MySale Group plc Carl Jackson, Chief Executive Officer +61 (0) 414 817 843 Graeme Burns, Corporate Development Director +44 (0) 777 585 4516 Zeus Capital Limited (Nominated Adviser & Joint Broker) +44 (0) 20 3829 5000 Giles Balleny, Corporate Finance Benjamin Robertson, Corporate Broking N+1 Singer (Joint Broker) +44 (0) 20 7496 3000 Mark Taylor Maitland +44 (0) 20 7379 5151 Dan Yea
About MySale Group
MySale is a leading international online retailer with established online flash-sales and retail websites in Australia, New Zealand, South-East Asia and the United Kingdom. Founded in 2007, the Group provides customers with access to outstanding brands and products at discounted prices whilst simultaneously providing brand partners unique international inventory and sales solutions.
The group provides a marketplace solution to brands offering both retail and flash-sale websites. The flash sales websites host time limited sales in each of its territories. These flash sales are focused on fashion, apparel, health, beauty and homeware categories and are predominantly undertaken on a consignment inventory basis. The retail websites operate in Australia and New Zealand and focus on similar product categories using mostly drop-shipped inventory.
Customers' shopping experiences are enhanced by the group's deployment of leading edge technology to ensure personalised and localised product offerings. Customer convenience has been at the heart of the group's technology development since the earliest days and now mobile commerce is the group's main sales channel.
The group's online sales are supported by a robust and flexible network of in-house supply chain infrastructure and technology that enables MySale to offer products from around the world for sale and delivery to customers in each territory.
As a result of these exceptional capabilities in inventory management and international sales MySale has built an enviable portfolio of over 2,500 brand partners from whom products are sourced.
The group operates websites under a number of different brands all of which operate on a uniform technology platform and a single international logistics infrastructure.
The Group's flash sales brands are; OzSale and BuyInvite in Australia; NzSale in New Zealand; SingSale in Singapore; MySale in Australia, New Zealand Malaysia, Thailand, the Philippines, the United Kingdom and Hong Kong, and Cocosa in the United Kingdom, Australia and New Zealand; whilst the Group's retail websites are Deals Direct, OO.com and Top Buy in Australia and Identity Direct in Australia and New Zealand.
Chairman's statement
Whilst the financial year 2015-16 was all about restoring the business to underlying profitability, this year our aim was to demonstrate that we could build on this as well as producing real step change improvements in our proprietary technology platform.
I am delighted to report a 59% improvement in underlying EBITDA to A$8.7milllion which was ahead of the market expectations at the beginning of the period. Furthermore we increased our technology investment from $4.0 million to $7.5 million which has allowed us to launch a significantly enhanced marketplace platform, an in-house payments solution ("OurPay") and multiple improvements in marketing automation.
In the last 12 months we have signed notable new brand partnerships, including gilt.com. Global brands and retailers recognise the strength of our international/contra-seasonal platform and our ability to support their inventory management and to connect them to new customers. They increasingly want to deal with a smaller number of regionally dominant partners with leading technology platforms. We are ideally placed to deliver this.
We have made no secret of the fact that strategic acquisitions are a core element of our growth strategy and we continue to refine our process and criteria in this regard. Essentially, we are targeting deals which can either widen the range of products which our existing customers are likely to want to buy or which grow our routes to market in our core geographies. Ideally both.
During the year, we acquired the trade and assets of Identity Direct in Australia and New Zealand. This has opened a new vertical for us in product personalisation; a sector we have been targeting for some time given its attractive margin structure, strong underlying growth and differentiated product set. It has also provided further evidence of our ability to integrate acquisitions onto our platform and add value through cost and revenue synergies.
We have started the current financial year very well and whilst there is much to accomplish both revenue and underlying profitability have grown strongly. Our plans for this year are ambitious and our new partnerships, product verticals and platform enhancements will support these growth plans.
Whilst we are very much a technology focussed business the group owes its success to the ability, intelligence and drive of the hundreds of team members working 24-7 in our global operations and I would like to place on record the board's appreciation of their exceptional hard work.
_____________________________
Iain McDonald
Chairman
25 September 2017
Review of operations by the Chief Executive Officer
MySale Group Plc ('the group') has made excellent progress in the year to 30 June 2017. Planned strategic initiatives have delivered another year of improved financial performance and positioned the group for further, profitable, growth.
The year's success was delivered by; our relentless focus on providing customers with exceptional value, choice and service and; our excellence in delivering unique sales channels and world-class inventory management to brand partners; whilst simultaneously leveraging the significant strength and efficiency of our proprietary technology platform and international logistics network.
The group's focus on customer engagement saw the active customer base grow 11% and in turn online revenue, which represents 90% of the group total, grew 10%, to A$238.7 million (FY16: A$217.9 million). Following the acquisition of Identity Direct, covered in more detail below, the group now has over 1 million active customers.
Total group revenue for the year rose 6% to A$268.4 million (FY16: A$252.3 million) which reflects the strong online growth referred to above, together with a planned reduction in lower margin offline revenue. The group's focus on growing gross profit has delivered an increase of 14% to A$76.0 million (FY16: A$66.7 million) which was underpinned by a 190 bp increase in gross margin to 28.3% (FY16: 26.4%).
A$ m FY17 FY17 Growth FY16
Revenue Gross Profit GP% Revenue Gross Profit Revenue Gross Profit GP%
------------- -------------- ------ -------- ------------- -------- ------------- ------
Group 268.4 76.0 28.3% +6% +14% 252.3 66.7 26.4%
---------- ------------- -------------- ------ -------- ------------- -------- ------------- ------
ANZ 221.5 65.7 29.6% +5% +15% 210.7 57.1 27.1%
S-E Asia 33.8 8.1 23.9% +7% +7% 31.6 7.5 23.9%
ROW 13.1 2.3 17.8% +31% +14% 10.0 2.1 20.5%
This improved trading performance is driven primarily by the group's clear plan to prioritise the growth of gross profit and secure higher lifetime-value customers. Key elements of this plan include localised merchandising and pricing, increased proportion of own-buy inventory and reduced delivery promotions. The increased levels of revenue and gross profit combined with a carefully controlled cost base delivered a 59% increase in underlying EBITDA to A$8.7 million (FY16: A$5.5 million).
This plan was established in 2015 when the group re-focused the business on its core aims of providing exceptional value in branded products to customers and exceptional inventory management solutions to brand partners within the group's three core territories. The operational achievements and significantly improved financial performance of FY17 represent another step on the group's path of profitable growth, with further significant growth anticipated in the current financial year.
Total underlying operating expenses increased 10% to A$67.4 million (FY16: A$61.2 million) reflecting the increased activity and volumes of trade during the year. The group made a planned investment into additional staff members in key senior management and departments such as buying, merchandising and marketing in order to ensure that the choice and service we provide to customers is maintained as we grow. The same increases are not anticipated in future years and the group will be able to leverage its fixed cost base which represents around 56% of the total operating expenses.
During the period, and across all territories, the group continued to dedicate its marketing resources and spend, which was circa 7% of revenue, almost exclusively into measurable, digital channels to attract and engage both new and existing customers. Our ongoing communication programme has seen those loyal and engaged customers continue to spend with reliable frequency and with stable purchasing metrics.
During the year the group diversified the digital marketing spend, notably in Australia and New Zealand (ANZ), by increasing the emphasis of spend into customer re-engagement activity. The early results of this diversification were encouraging as marketing efficiency improved. This has led to a re-calibrated marketing plan for the entire group. From the beginning of the current financial year marketing objectives have been refocused based on these learnings, and improved data analysis capabilities, to better measure marketing costs and returns per purchase and buyer. Whilst early in this revised programme the initial results have been positive and further improvements in marketing efficiency are anticipated during the year.
Technology Development
During the year the group increased capital expenditure, as planned, in order to further develop its proprietary technology capabilities. An important phase of work reached a conclusion and saw the release of a new and enhanced version of the group's technology platform during the year. This new platform's functionality supports our key objectives of increasing revenue and decreasing costs with more efficiency.
This new, marketplace enabled, platform allows fuller integration across all the group's sales channels and to date all of the group's websites, other than the recently acquired Identity Direct, have migrated to this platform. The group now has a single, live view of global inventory and both 1P (owned) and 3P (consignment or drop-ship) products can be sold by any of our websites simultaneously. Similarly the platform allows a single live view of each customer and their individual journeys allowing us to better serve their preferences across all websites and mobile device apps. As always the mobile buyer is at the heart of our capabilities and this channel accounted for 59% of orders received in the past year.
A key element of the development has been to enhance the group's data capabilities for better collection and analysis, improved machine learning and automation which in turn is driving improved customer experiences, increased revenue and more efficiency. The platform allows for campaigns to be launched faster and more efficiently as well as providing seamless user interaction across all devices. These developments provide a step change in capability which will support further growth.
The group has also continued to use its technology innovation for tactical improvements in the customer proposition to drive revenue, one example being the development of Ourpay, a 'buy-now, pay-later' programme. This instalment payment option helps customers manage their finances and has been shown to increase both the spend and the frequency of those customers accepted to the programme. This payment solution was developed in-house in order to deliver a more flexible, cost-efficient and integrated system, which is better suited to the group's requirements than that provided by third parties. The system automates all aspects of the programme including credit scoring and monitoring, an aspect of the programme where the group has adopted a conservative policy. The debtor balance associated with Ourpay was A$1.8 million at the year end and is anticipated to grow as transaction volumes increase.
The initial trials of Ourpay have been very positive. Customer's average spend increased 19% and the frequency of purchase increased by around 30%. Ourpay shall now be rolled out to all territories and websites where legislation currently allows. In addition we shall shortly launch a subscription-delivery model for customers which will be fully integrated to the Ourpay platform.
Brands and Strategic Partnerships
The group has secured a number of new brand partners during the last 12 months, the most notable being the launch of a strategic relationship with gilt.com, a US based online retailer which is part of The Hudson's Bay Company. This and other strategic partnerships have already provided significant additional product choice to customers in all the group's territories.
The partnership launched with Sports Direct with access to more than 150,000 products from their inventory is now operational and the group commenced live sales on its retail marketplace during the year. Good progress has been made. We have direct inventory feeds, tailored merchandising and volumes continue to grow.
Forging partnerships with flagship retail brands such as Gilt.com and Sports Direct is a strong endorsement of the group's capabilities in supporting brands in establishing new sales channels as well as in inventory management. The retail landscape is undergoing some structural change and increasingly large brands recognise the benefits that more integrated inventory partnerships can bring to their operations. The group's well established international network, flexible and scalable technology platform and resources in key territories means it is an ideal partner for international brands and retailers. Our platform allows us to customise our integration with any brand thus delivering a tailored solution to their requirements.
We have invested more time and funds into product selection during the year, ensuring customers have the best possible choice available and by the end of the year we had more than doubled listed SKU's to over 300,000. Nearly all of the increased product selection has come from relationships with 3P suppliers and thus the group does not take any inventory risk as the terms of business are on a consignment or dropship basis. In order that customers can easily find and navigate to their favourite brands and products the group delivers highly personalised experiences and communications to each customer.
Aligned with this materially increased product selection has been an expansion of the product categories in which we have excellent coverage. Refurbished technology is one such example of a category that the group has launched and which resonates strongly with our existing customer base. Finally, the acquisition of Identity Direct has brought significant licensing expertise and licensing relationships with global brands to the group and this is a revenue opportunity the group plans to develop further.
Marketplace
The group's new technology platform ensures that the retail and flash websites operate on the same platform which provides numerous advantages including: better sharing of data; more efficient use of resources; greater visibility of inventory; and reduced buying administration. This will allow the group to substantially increase the range of products available via our websites, particularly 3P inventory, whilst minimising variable costs.
This platform facilitates the group's marketplace and allows the integration of all websites directly with brands and retailers, whether that be as part of supporting an inventory clearance or providing a brand with a new retail channel. It also has created the group's Endless Aisle concept.
The group has always offered a wide range of products but the marketplace development now means that this range shall be significantly expanded and as we now have a live feed of global inventory to all websites, there is an opportunity to extend the length of time products are available and merchandised to customers - our Endless Aisle. Importantly the expansion of this very long tail of product inventory will be driven by 3P vendor relationships which incur limited marginal cost to the group.
The retail websites within the group's marketplace, predominantly operate on a 3P supplier drop-ship basis and serve the product verticals of sports (dealsdirect), home (oo), gifting (topbuy) and personalised goods (Identity Direct) and are founded on the acquisitions undertaken in ANZ over the last two years. The experience gained during the successful integration and launch of these sites will serve the group well as further verticals are added in the future. As over 80% of our revenues are derived from 3P product listings the group has a relatively light working capital requirement and further reductions in this requirement are targeted in the future.
The creation of the retail marketplace platform represents a step change in the potential addressable audience and in future revenue opportunities of the group. Designed with mobile commerce at its heart and to be simple and intuitive for vendors to use, this platform will further support our brand partners and their sales ambitions. Increasingly brands use marketplace solutions to support their international sales as it provides local knowledge, existing audiences, and a cost-effective launch in a new territory.
Operations
In FY15 the group began implementing a strategy to increase the proportion of inventory that is purchased outright as 'own-buy' (1P), rather than on a consignment basis (3P) and during this year 1P goods increased to 17% of orders, consistent with that strategy. Whilst the vast majority of goods sold are still done so on a consignment or drop-ship basis, this 1P strategy supports deeper relationships with brand partners, slightly higher gross margins and wider product selection for customers. 1P activity is focused on staple, branded goods.
During the year the group's highly efficient platform processed record numbers of transactions. The volumes are remarkable and underline the efficient processes and systems that the group has in place to support brands and serve customers; on average more than 20,000 new products were launched daily and 180,000 digital images were created or edited each month. In the year 2.9 million orders were processed and 12 million units shipped which was only possible due to high levels of automation and streamlined workflows. The strength and capability of this platform will be leveraged to further improve efficiency in coming years as our volumes increase further.
The combination of the group's high quality sourcing, compelling consumer value, product selection and reliable service means that returns remain at industry leading levels of only 5% overall.
Investment in the development of the group's capabilities continues and this year saw a number of key senior hires strengthen the executive team and also enhancement of staff within our marketing, data science and merchandising teams.
Acquisition of Identity Direct
The group acquired the business of Identity Direct, in ANZ, during the fourth quarter of the financial year. Identity Direct is a retailer of personalised products with strong licensing relationships, particularly with entertainment brands, such as Disney and Marvel. In relation to the group it is a relatively small business, with annual revenues of circa A$10 million. The long term commercial opportunity in this complementary vertical is very attractive and generates high gross margin, in excess of 60%. The products are strong in childrens and sports categories which fits well with existing MySale customer base. There are good opportunities to leverage efficiencies by deploying the group's scale and platform and also growing revenue with enhanced marketing and cross selling between the two customer bases. The group believes that development of its product licensing capability will lead to significant opportunities to generate incremental revenue in the medium term.
The integration of the Identity Direct business is ahead of plan and, with property and resources now rationalised, cost savings and synergies will accrue to the group in the current year. Operational integration will be complete shortly allowing the group to capitalise on the fourth calendar quarter when Identity Direct generates around 60% of its annual revenues. This is the second integration to our platform undertaken in the last two years and the positive results give the group confidence it can successfully execute further, larger integrations in the future.
Australia & New Zealand (ANZ)
Within this operating territory the group has continued to successfully implement its strategic initiatives and delivered much improved gross profit, up by 15% to A$65.6 million (FY16: A$57.1 million) and gross margin to 29.6% (FY16: 27.1%) whilst also growing revenue by 5% to A$221.5 million (FY16: 210.7 million). The significant increase in AOV to c. $85 achieved in FY16 has been maintained by continued focus on a localised offer with strong merchandising, pricing and overall ANZ customer proposition.
As noted above the group's nascent retail marketplace was launched in ANZ at the end of the prior year and is an opportunity to significantly increase the group's addressable market in the region. To date the group has already seen in excess of 500 suppliers join this marketplace. The first flagship retailer to join this marketplace, as a 3P vendor, was Sports Direct and they are now fully integrated to the group's platform allowing our ANZ team to efficiently market and merchandise the 150,000 products available. The sporting goods market in ANZ is estimated to be worth in excess of A$3 billion annually and the strong value offer provided by Sports Direct combined with group's experience in connecting customers with brands is anticipated to create a compelling proposition in this vertical in the medium term.
The group is one of the pre-eminent online, off-price retailers in ANZ and has further attractive growth possibilities due to both the lower levels of internet penetration, in comparison to territories such as the United Kingdom and the USA, and this region's relative lack of off-price retailers. In ANZ the group has a small network of physical outlets which is used both to clear the group's own surplus inventory and test brands and products in that offline channel.
The group is actively looking to expand further the breadth and depth of our online and offline sales channels in this region in order to fully leverage our customer base, physical resource, buying power and expertise.
South-East Asia
During the period South-East Asia had revenue growth of 7% to A$33.8 million (FY16: A$31.6 million) and a corresponding 7% increase in gross profit to A$8.1 million (FY16: A$7.5 million). On a CER basis the underlying revenue growth was 11%. The continued growth in revenue and profitability has been driven by the group's localisation plan which ensures that merchandising, pricing, payment and shipping solutions are all tailored to the needs of local consumers.
Here the strategy has been to grow the active customer base, so acquisition marketing is a priority, to build gross profitability and then leverage this increasing scale to use resources more efficiently and achieve lower shipping rates. With a more profitable local model now established and first mover advantage South-East Asia is an important element of the group's long-term profitable growth.
In the medium to long term this region is anticipated to be increasingly significant as the group grows its customer base and demand for branded products, particularly European and USA brands, continues to increase. With a substantial addressable population, increasing disposable income, lack of off-price competition and high mobile penetration this region is well served by the group's strong value, branded sales offer and exceptional mobile commerce capability.
Rest of World
This territory comprises the group's operations within the United Kingdom, which trade predominately under the Cocosa brand, relaunched in FY15, which provides customers with compelling value in premium branded products.
The United Kingdom had a good year, as revenue increased by more than 30%, thereby achieving revenue of A$13.1 million (FY16: A$10.0 million). On a CER basis the underlying revenue growth was 59%.This growth was underpinned by increased numbers of active customers which is our key objective in a newer territory. Gross margin was lower than the previous year as the group used products and pricing as promotional tools to develop the customer base. This form of promotion is used by the group much more in an early stage territory than in established territories.
These are encouraging results and position the business for further growth in the current financial year. Whilst currently a relatively small part of the group's overall activities, this business operates in the UK's large and well developed online marketplace where engaged and active consumers can be acquired successfully and cost effectively. Given there is no online flash sale operator of scale in the UK the group has targeted becoming a leading operator in the country.
The group has a material presence in the UK as it an important centre for the group's product sourcing team for both UK and European brands. Brands from these territories, along with USA, have grown their weighting within group revenues over the past few years and now account for over half worldwide revenue.
Outlook
The group had an excellent FY17 with significantly improved financial performance and great progress against our strategic goals. Increasing numbers of active customers are driving revenue and efficiency forward.
We have a unique set of brand partners which in turn means that we are able to offer our loyal customers access to a fantastic range of goods and products. When this is combined with our flexible and efficient business platform it gives customers an easy-to-use, compelling value, shopping experience.
The group has carried good momentum into the current year and built on the excellent foundations and initiatives put in place last year. This year has started well with revenue growth accelerating from last year and strong growth in underlying profitability. Whilst our peak trading period is still ahead of us the board has confidence in the current year's prospects and expects that underlying EBITDA for the year will be at least in line with the upper end of market expectations.
_____________________________
Carl Jackson
Chief Executive Officer
25 September 2017
Financial review by the Chief Financial Officer
Revenue and Gross Profit
For the year ended 30 June 2017 group revenue increased by 6% to A$268.4 million (FY16: A$252.3 million) and gross profit increased faster, by 14%, to reach A$76.0 million (FY16: A$66.7 million). This improved performance came as a direct result of the strategic plan implemented by the group in 2015.
On a constant currency basis the growth rates of revenue and gross profit were higher, at 9% and 16% respectively, reflecting the strengthening of the group's reporting currency AUD during the year.
Operating Expenses
The increase in activity and gross profit led underlying operating expenses to increase 10% to A$67.4 million (FY16: A$61.2 million) in the period. During the year the group increased staff resources in a number of operational departments to support further growth and ensure the group delivers outstanding service to its customers. This increase included a number of key hires within the senior management team.
Profit/Loss before Tax
The underlying profit before tax for the year is A$3.3 million (FY16: A$1.1 million) and the reported loss before tax for the period is A$1.5 million (FY16: A$0.2 million profit). This reported loss is after the inclusion of a number of one-off and non-cash items which are shown in more detail in note 6 to the financial statements in order to provide greater insight as to the underlying profitability of the group.
Profit/Loss after Tax and earnings per share
The underlying profit after tax for the year is A$3.9 million (FY16: A$0.6 million) and the reported loss after tax for the period is $A1.0 million (FY16: A$0.2 million). This reported loss is after the inclusion of a number of one-off and non-cash items which are shown in more detail in note 6 to the financial statements in order to provide greater insight as to the underlying profitability of the group.
Note 27 shows the detailed calculations of basic earnings per share for the financial year which increased by 500% to 2.5 cents per share (FY16: 0.4 cents) on an underlying basis and was 0.6 cents loss (FY16: 0.1 cents loss) on a reported basis.
Taxation
The group has recorded a tax benefit of A$0.6 million for the year (FY16: tax expense of A$0.4 million) which diverges from the group's long term guidance of an effective tax rate of approximately 30%. This divergence arises due to various tax adjustments and timing differences. Full details are provided in note 9 to the financial statements. The group has total tax losses of A$30 million (FY16: A$31 million) with the majority located in Australia. The entire tax loss has been recognised with the provision of a deferred tax asset of A$10.5 million (FY16: A$10.3 million).
Balance Sheet, Cash and Working Capital
The group's closing cash balance was A$19.0 million (FY16: A$34.0 million) and the net cash balance was A$8.9 million (FY16: A$27.5 million).
The closing cash balance reflects a number of significant working capital outflows which occurred towards the end of the financial year which are temporary in nature and will reverse in the following period. The group's strategic plan allows for selective investment into inventory balances and other working capital deployments to ensure the group is able to take advantage of commercially beneficial opportunities. The group anticipates that working capital balances will normally lie between 1-3% of annual revenue.
Capital expenditure increased, as planned, as the group invested principally in the development of its proprietary technology platform together with expenditure related to property and equipment upgrades. Total capital expenditure was A$8.5 million (FY16: A$4.0 million).
During the period the group's acquisition activity was focused around the purchase of Identity Direct, a personalisation business, for consideration of A$2.9 million.
Banking Facilities
The group has significant cash balances, held principally with HSBC with whom the group currently has trade finance multi option debt facilities of A$13.1 million. In addition the group has finance facilities of A$0.2 million with ANZ Bank. All facilities are renewed on an annual basis.
Underlying Basis
As noted above the group manages its operations by looking at the underlying EBITDA which excludes the impact of a number of one-off and non-cash items of a non-trading nature as this, in the Board's opinion, provides a more representative measure of the group's performance. A reconciliation between reported profit before tax and underlying EBITDA is included at note 6 to the financial statements and outlined below.
A$ million FY17 FY16
Reported EBITDA 3.8 4.6
Share based payments 1.1 0.4
Discontinued activities 0.3 0.3
One-off costs 2.4 2.0
Unrealised foreign exchange gain / (loss) 1.0 (1.8)
4.8 0.9
Underlying EBITDA 8.7 5.5
Depreciation & Amortisation 5.3 4.4
Net interest expense 0.1 (0.0)
Underlying profit before tax 3.3 1.1
------ ------
Reported profit / (loss) before tax (1.5) 0.2
====== ======
Included within one-off items acquisition expenses, post-acquisition reorganisation costs, charges arising from system migration and IPO costs.
Key Performance Indicators
The group manages its operations through the use of a number of key performance indicators (KPI's) such as revenue, revenue growth, gross margin percentage, average order value (AOV), average revenue per active customer (RPAC), and underlying EBITDA.
_____________________________
Andrew Dingle
Chief Financial Officer
25 September 2017
Note 2017 2016
A$'000 A$'000
Revenue
Revenue from sale of goods 4 268,387 252,289
Cost of sale of goods (192,344) (185,633)
Gross profit 76,043 66,656
--------- ---------
Other operating (loss)/gains, net 5(1,334) 2,173
Finance income 105 125
Finance costs 7 (223) (97)
Finance (costs)/income, net (118) 28
Expenses
Selling and distribution expenses (44,040) (37,460)
Administration expenses (32,109) (31,126)
Share of loss of joint venture - (104)
-------- --------
(Loss)/profit before income tax benefit/(expense) (1,558) 167
Income tax benefit/(expense) 9576 (364)
--- -----
Loss after income tax benefit/(expense) for the year (982) (197)
Other comprehensive income
Items that may be reclassified subsequently to profit
or loss
Net change in the fair value of cash flow hedges taken
to equity, net of tax 23 259 (1,068)
Foreign currency translation 23 (1,751) (2,161)
------- -------
Other comprehensive income for the year, net of tax (1,492) (3,229)
------- -------
Total comprehensive income for the year (2,474) (3,426)
======= =======
Loss for the year is attributable to:
Non-controlling interest - (20)
Owners of MySale Group Plc (982) (177)
----- -----
(982) (197)
===== =====
Total comprehensive income for the year is attributable
to:
Non-controlling interest - (20)
Owners of MySale Group Plc (2,474) (3,406)
(2,474) (3,426)
======= =======
Cents Cents
Basic earnings per share 27 (0.65) (0.12)
Diluted earnings per share 27 (0.65) (0.12)
Note 2017 2016
A$'000 A$'000
Assets
Current assets
Cash and cash equivalents 10 19,027 34,005
Trade and other receivables 11 16,951 9,058
Inventories 12 38,042 35,473
Other 13 4,949 7,973
Total current assets 78,969 86,509
-------- ----------
Non-current assets
Property, plant and equipment 14 2,711 2,226
Intangibles 15 35,572 29,765
Deferred tax 16 10,544 10,295
Total non-current assets 48,827 42,286
-------- ----------
Total assets 127,796 128,795
-------- ----------
Liabilities
Current liabilities
Trade and other payables 17 28,586 29,548
Borrowings 18 10,014 6,476
Derivative financial instruments 788 1,047
Income tax payable 193 1,104
Provisions 19 2,283 2,163
Deferred revenue 10,222 11,677
Total current liabilities 52,086 52,015
------ ------
Non-current liabilities
Borrowings 20 143 -
Provisions 21 332 368
Total non-current liabilities 475 368
------ ------
Total liabilities 52,561 52,383
------ ------
Net assets 75,235 76,412
====== ======
Equity
Share premium account 306,363 306,363
Other reserves 23 (125,958) (125,763)
Accumulated losses (105,150) (104,168)
Equity attributable to the owners of MySale Group
Plc 75,255 76,432
Non-controlling interests (20) (20)
Total equity 75,235 76,412
========= =========
The financial statements of MySale Group Plc (company number 115584) were
approved by the Board of Directors and authorised for issue on 25 September
2017. They were signed on its behalf by:
___________________________ ___________________________
Carl Jackson Andrew Dingle
Director Director
Share
premium Other Accumulated Non-controlling
Total
account reserves losses interest equity
A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1
July 2015 306,363 (122,931) (103,991) - 79,441
Loss after
income tax
expense
for the year - - (177) (20) (197)
Other
comprehensive
income for
the year, net
of tax - (3,229) - - (3,229)
Total
comprehensive
income for
the year - (3,229) (177) (20) (3,426)
Transactions
with owners in
their capacity
as owners:
Share-based
payments (note
23) - 397 - - 397
Balance at 30
June 2016 306,363 (125,763) (104,168) (20) 76,412
========= ========= =========== =============== =========
Share
premium Other Accumulated Non-controlling
Total
account reserves losses interest equity
A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1
July 2016 306,363 (125,763) (104,168) (20) 76,412
Loss after
income tax
benefit
for the year - - (982) - (982)
Other
comprehensive
income for
the year, net
of tax - (1,492) - - (1,492)
Total
comprehensive
income for
the year - (1,492) (982) - (2,474)
Transactions
with owners in
their capacity
as owners:
Share-based
payments (note
23) - 1,297 - - 1,297
Balance at 30
June 2017 306,363 (125,958) (105,150) (20) 75,235
========= ========= =========== =============== =========
Note 2017 2016
A$'000 A$'000
Cash flows from operating activities
(Loss)/profit before income tax benefit/(expense)
for the year (1,558) 167
Adjustments for:
Depreciation and amortisation 5,275 4,383
Net loss/(gain) on disposal of property, plant and
equipment (15) 30
Share of loss - joint ventures - 104
Interest income (105) (125)
Interest expense 223 97
3,820 4,656
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables (7,893) 14,167
Increase in inventories (2,529) (17,593)
Decrease/(increase) in other operating assets 3,190 (3,153)
Increase/(decrease) in trade and other payables (1,167) 155
Increase in other provisions 1,207 486
(Decrease)/increase in deferred revenue (1,455) 530
(4,827) (752)
Interest received 105 125
Interest paid (223) (97)
Income taxes (paid)/refunded (575) 832
Net cash from/(used in) operating activities (5,520) 108
-------- ----------
Cash flows from investing activities
Payment for purchase of business, net of cash acquired (3,090) (5,300)
Payments for property, plant and equipment 14 (1,184) (782)
Payments for intangibles 15 (7,308) (3,248)
Payments for security deposits - (120)
Proceeds from disposal of property, plant and equipment 68 153
Proceeds from disposal of intangibles - 8
Proceeds from release of security deposits 103 -
Net cash used in investing activities (11,411) (9,289)
-------- -------
Cash flows from financing activities
Proceeds from borrowings 13,234 9,089
Repayment of borrowings (9,671) (3,775)
Repayments of leases (28) (91)
Additional lease finance 146 -
Net cash from financing activities 3,681 5,223
------- -------
Net decrease in cash and cash equivalents (13,250) (3,958)
Cash and cash equivalents at the beginning of the
financial year 34,005 39,853
Effects of exchange rate changes on cash and cash
equivalents (1,728) (1,890)
Cash and cash equivalents at the end of the financial
year 10 19,027 34,005
======== =======
Note 1. General information
MySale Group Plc is a group consisting of MySale Group Plc (the 'company'
or 'parent entity') and its subsidiaries (the 'group'). The financial statements
of the group, in line with the location of the majority of the group's operations
and customers, are presented in Australian dollars and generally rounded
to the nearest thousand.
The principal business of the group is the operating of online shopping
outlets for consumer goods like ladies, men and children's fashion clothing,
accessories, beauty and homeware items.
MySale Group Plc is a public company, limited by shares, listed on the AIM
(Alternate Investment Market), a sub-market of the London Stock Exchange.
The company is incorporated and registered under the Companies (Jersey)
Law 1991. The company is domiciled in Australia.
The registered office of the company is Ogier House, The Esplanade, St.
Helier, JE4 9WG, Jersey and principal place of business is at Unit 5, 111
Old Pittwater Road, Brookvale, NSW 2100, Australia.
The financial statements were authorised for issue, in accordance with a
resolution of directors, on 25 September 2017. The directors have the power
to amend and reissue the financial statements.
Note 2. Significant accounting policies
Basis of preparation
This condensed consolidated financial information for the year ended 30 June 2017 has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards as adopted by the European Union ("Adopted IFRSs"), IFRS IC Interpretations and the Companies (Jersey) Law 1991.
The financial information contained in this preliminary announcement for the years ended 30 June 2017 and 30 June 2016 does not comprise the group's statutory financial statements within the meaning of Companies (Jersey) Law 1991. Statutory accounts for the year ended 30 June 2017 will be filed with the Jersey Companies Registry in due course. The auditors' report on the statutory accounts for each of the years ended 30 June 2017 and 30 June 2016 is unqualified, does not draw attention to any matters by way of emphasis and does not contain any statement under any matters that are required to be reported by exception under Companies (Jersey) Law 1991.
Going concern
The directors have reviewed the group's forecast and projections, including assumptions concerning capital expenditure and expenditure commitments and their impact on cash flows, and have a reasonable expectation that the group has adequate financial resources to continue its operations for the foreseeable future. For this reason they have continued to adopt the going concern basis in preparing the financial statements.
In preparing the preliminary announcement, the directors have also made reasonable and prudent judgements and estimates and prepared the preliminary announcement on the going concern basis. The preliminary announcement and strategic report contained herein give a true and fair view of the assets, liabilities, financial position and profit and loss of the group.
Changes to accounting standards
There have been no changes to accounting standards during the year which have had or are expected to have any significant impact on the group.
Note 3. Critical accounting judgements, estimates and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below. ------------------------------------------------------------------------------------------------ Provision for obsolete and slow moving inventories The provision for obsolete and slow moving inventories assessment requires a degree of estimation and judgement. The level of the provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that affect inventory obsolescence. Estimation of useful lives of assets The group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down. Goodwill The group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill has suffered any impairment, in accordance with the accounting policy stated in note 2. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of assumptions, including estimated discount rates based on the current cost of capital and growth rates of the estimated future cash flows. No impairment charge was required in 2017 (2016: A$nil). Impairment of non-financial assets The group assesses impairment of non-financial assets at each reporting date by evaluating conditions specific to the group and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions. Income tax The group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The group recognises liabilities for anticipated tax audit issues based on the group's current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made. Recovery of deferred tax assets Deferred tax assets are recognised for deductible temporary differences only if the group considers it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Note 4. Operating segments Identification of reportable operating segments The group's operating segments are determined based on the internal reports that are reviewed and used by the Board of Directors (being the Chief Operating
Decision Makers ('CODM')) in assessing performance and in determining the
allocation of resources.
The CODM reviews revenue and gross profit by reportable segments, being
geographical regions. The accounting policies adopted for internal reporting
to the CODM are consistent with those adopted in these financial statements.
The group operates separate websites in each country that it sells goods
in. Revenue from external customers is attributed to each country based
on the activity on that countries website. Similar types of goods are sold
in all segments. The group's operations are unaffected by seasonality.
Intersegment transactions
Intersegment transactions were made at market rates and are eliminated on
consolidation.
Segment assets and liabilities
Assets and liabilities are managed on a group basis. The CODM does not regularly
review any asset or liability information by segment and, accordingly there
is no separate segment information. Refer to the balance sheet for group
assets and liabilities.
Major customers
During the year ended 30 June 2017 there were no major customers (2016:
none). A customer is considered major if its revenues are 10% or more of
the group's revenue.
Operating segment information
Australia Rest of
and South-East the
New Zealand Asia world Total
- 2017 A$'000 A$'000 A$'000 A$'000
Revenue
Sales to external customers 221,451 33,806 13,130 268,387
Total revenue 221,451 33,806 13,130 268,387
----------- ---------- ------- --------
Gross profit 65,662 8,058 2,323 76,043
----------- ---------- -------
Other operating (loss)/gains, net (1,334)
Selling and distribution expenses (44,040)
Administration expenses (32,109)
Finance income 105
Finance costs (223)
Loss before income tax benefit (1,558)
Income tax benefit 576
--------
Loss after income tax benefit (982)
--------
Australia Rest of
and South-East the
New Zealand Asia World Total
- 2016 A$'000 A$'000 A$'000 A$'000
Revenue
Sales to external customers 210,710 31,590 9,989 252,289
Total revenue 210,710 31,590 9,989 252,289
----------- ---------- ------- --------
Gross profit 57,060 7,546 2,050 66,656
----------- ---------- -------
Other operating gains, net 2,173
Selling and distribution expenses (37,460)
Administration expenses (31,126)
Finance income 125
Finance costs (97)
Share of loss of joint venture (104)
Profit before income tax expense 167
Income tax expense (364)
--------
Loss after income tax expense (197)
--------
Note 5. Other operating (loss)/gains, net
2017 2016
A$'000 A$'000
Net foreign exchange (loss)/gain (1,425) 2,177
Net gain on disposal of property, plant and equipment 15 19
Other income/(expense) 76 (23)
Other operating (loss)/gains, net (1,334) 2,173
======= ======
Note 6. EBITDA reconciliation (earnings before interest, taxation, depreciation
and amortisation)
2017 2016
A$'000 A$'000
EBITDA reconciliation
(Loss)/profit before income tax (1,558) 167
Add: Share of loss of joint venture - 104
Less: Interest income (105) (125)
Add: Interest expense 223 97
Add: Depreciation and amortisation 5,275 4,383
EBITDA 3,835 4,626
======= ======
Underlying EBITDA represents EBITDA adjusted for one-off, non-trading items.
2017 2016
A$'000 A$'000
Underlying EBITDA reconciliation
EBITDA 3,835 4,626
Share-based payments 1,132 397
Reorganisation and discontinued operations 320 265
One-off costs of non-trading, non-recurring nature including
IPO and acquisition expenses 2,434 1,997
Unrealised foreign exchange loss/(gain) 953 (1,819)
------ -------
Total one-off, non-trading items 4,839 840
Underlying EBITDA 8,674 5,466
====== =======
Note 7. Expenses
2017 2016
A$'000 A$'000
(Loss)/profit before income tax includes the following
specific expenses:
Sales, distribution and administration expenses:
Staff costs (note 8) 34,254 29,716
Marketing expenses 18,119 16,714
Occupancy costs 5,575 5,617
Merchant and other professional fees 5,764 5,936
Depreciation and amortisation 5,275 4,383
Other administration costs 7,162 6,220
Total sales, distribution and administration expenses 76,149 68,586
Underlying operating expenses
Total sales, distribution and administration expenses 76,149 68,586
Add: Realised foreign currency loss/(gain) 472 (359)
Add: Other (expense)/income (76) 23
Add: Gain on disposal of fixed assets (15) (19)
Less: Share-based payments, one-off costs and reorganisation
and discontinued operations (3,886) (2,559)
Less: Depreciation and amortisation (5,275) (4,383)
Less: Share of loss in joint venture - (104)
------- -------
Total underlying operating expenses 67,369 61,185
-------
Finance costs
Interest and finance charges paid/payable 223 97
Occupancy costs include:
Minimum operating lease payments 4,568 4,372
Cost of inventories recognised as an expense in 'cost
of sales' in profit or loss 152,426 149,297
------- -------
Note 8. Staff costs
2017 2016
A$'000 A$'000
Aggregate remuneration:
Wages and salaries 27,064 24,463
Social security costs 2,380 2,095
Long term employee incentive plan 1,297 397
Other staff costs and benefits 3,513 2,761
Total staff costs 34,254 29,716
====== ======
2017 2016
The average monthly number of employees (including executive
directors and those on a part-time basis) was:
Sales and distribution 363 357
Administration 181 186
544 543
==== ====
Details of directors' remuneration and interests are provided in the audited
section of the Directors' remuneration report and should be regarded as
part of these financial statements.
Note 9. Income tax (benefit)/expense
2017 2016
A$'000 A$'000
Income tax (benefit)/expense
Current tax 624 759
Deferred tax - origination and reversal of temporary differences (397) (413)
Adjustment recognised for prior years (803) 18
Aggregate income tax (benefit)/expense (576) 364
Deferred tax included in income tax (benefit)/expense
comprises:
Increase in deferred tax assets (note 16) (397) (413)
Numerical reconciliation of income tax (benefit)/expense
and tax at the statutory rate
(Loss)/profit before income tax benefit/(expense) (1,558) 167
Tax at the statutory tax rate of 30% (467) 50
Effect of overseas tax rates 183 -
Tax effect amounts which are not deductible/(taxable)
in calculating taxable income:
Non-deductible expenses 22 218
Tax-exempt income - (26)
Current year tax losses not recognised - 58
Change in recognised deductible temporary difference 489 -
Adjustment recognised for prior years (803) 64
Income tax (benefit)/expense (576) 364
======= ======
The tax rates of the main jurisdictions are Australia 30% (2016: 30%), Singapore
17% (2016: 17%), New Zealand 28% (2016: 28%), United Kingdom 20% (2016:
20%) and United States 42.8% (2016: 42.8%).
Note 10. Current assets - cash and cash equivalents
2017 2016
A$'000 A$'000
Cash at bank 12,314 28,805
Bank deposits at call 6,713 5,200
19,027 34,005
====== ======
Note 11. Current assets - trade and other receivables
2017 2016
A$'000 A$'000
Trade receivables 16,800 9,058
Less: Provision for impairment of receivables (86) -
16,714 9,058
Other receivables 237 -
16,951 9,058
====== ======
Trade receivables include uncleared cash receipts due from online customers
which amounted to A$2,515,000 (2016: A$2,473,000).
Note 12. Current assets - inventories
2017 2016
A$'000 A$'000
Goods for resale 35,403 35,395
Obsolete and slow moving inventory provision (895) (456)
34,508 34,939
Stock in transit 3,534 534
38,042 35,473
====== ======
Write-downs of inventories to net realisable value recognised as an expense
during the year ended 30 June 2017 amounted to A$281,000 (2016: A$789,000).
This expense has been included in 'cost of sales' in profit or loss.
Note 13. Current assets - other
2017 2016
A$'000 A$'000
Prepayments 1,419 984
Prepaid inventory 3,030 6,271
Other deposits 333 435
Other current assets 167 283
4,949 7,973
====== ======
Prepaid inventory relates to the costs of goods for resale that have been
paid for by the group but not delivered to its distribution centres for
further dispatch to the customers who placed the orders as at the reporting
date. The corresponding cash received in advance from customers are accounted
for within deferred revenue category in the balance sheet which includes
the total amount of cash received for the goods not delivered to customers
at the reporting date.
Note 14. Non-current assets - property, plant and equipment
Reconciliations
Reconciliations of the written down values at the beginning and end of the
current and previous financial year are set out below:
Leasehold Plant and Fixtures Motor
improvements equipment and fittings vehicles Total
A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1 July
2015 379 2,058 380 206 3,023
Additions 71 427 284 - 782
Disposals (4) (74) (3) (102) (183)
Exchange differences (4) (30) (11) (5) (50)
Depreciation expense (233) (914) (153) (46) (1,346)
Balance at 30 June
2016 209 1,467 497 53 2,226
Additions 477 154 306 286 1,223
Additions through
business
combinations - 489 - - 489
Disposals (7) (5) (12) (25) (49)
Exchange differences (3) (37) (1) - (41)
Depreciation expense (169) (729) (189) (50) (1,137)
Balance at 30 June
2017 507 1,339 601 264 2,711
============ ========= ============ ======== =======
Note 15. Non-current assets - intangibles
Reconciliations
Reconciliations of the written down values at the beginning and end of the
current and previous financial year are set out below:
Customer ERP
Goodwill relationships Software system Total
A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1 July 2015 16,849 1,529 2,912 2,227 23,517
Additions - - 2,408 840 3,248
Additions through business
combinations 4,655 1,495 - - 6,150
Disposals - - (8) - (8)
Exchange differences - (94) (11) - (105)
Amortisation expense - (954) (1,385) (698) (3,037)
Balance at 30 June 2016 21,504 1,976 3,916 2,369 29,765
Additions - - 6,851 492 7,343
Additions through business
combinations 2,515 124 - - 2,639
Disposals - - (3) - (3)
Exchange differences - (33) (9) 8 (34)
Amortisation expense - (1,141) (2,133) (864) (4,138)
Balance at 30 June 2017 24,019 926 8,622 2,005 35,572
======== ============= ======== ====== =======
Amortisation expense is included in 'administration expenses' in profit
or loss.
Note 16. Non-current assets - deferred tax
2017 2016
A$'000 A$'000
Deferred tax asset comprises temporary differences attributable
to:
Amounts recognised in profit or loss:
Tax losses 8,876 9,324
Accrued expenses 485 701
Provisions 784 847
Sundry 673 269
Property, plant and equipment 4 (253)
Intangibles (278) (593)
Deferred tax asset 10,544 10,295
Movements:
Opening balance 10,295 10,320
Credited to profit or loss (note 9) 397 413
Additions through business combinations - (360)
Exchange loss (148) (78)
Closing balance 10,544 10,295
====== ======
Deferred income tax assets are recognised for tax losses, non-deductible
accruals and provisions and capital allowances carried forward to the extent
that realisation of the related tax benefits through future taxable profits
is probable.
Note 17. Current liabilities - trade and other payables
2017 2016
A$'000 A$'000
Trade payables 23,460 22,464
Other payables and accruals 4,450 6,168
Payable to other related party 58 50
Sales tax payable 618 866
28,586 29,548
====== ======
Note 18. Current liabilities - borrowings
2017 2016
A$'000 A$'000
Bank loans 5,200 5,200
Bank loans under interchangeable facilities including
letters of credit 4,775 1,212
Finance lease liability 39 64
10,014 6,476
====== ======
Refer to note 20 for further information on assets pledged as security and
financing arrangements.
Note 19. Current liabilities - provisions
2017 2016
A$'000 A$'000
Employee benefits provision 1,115 770
Lease make good provision 173 182
Gift voucher provision 433 699
Sales returns provision 562 512
2,283 2,163
====== ======
Note 20. Non-current liabilities - borrowings
2017 2016
A$'000 A$'000
Finance lease liability 143 -
====== ======
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
2017 2016
A$'000 A$'000
Bank loans 5,200 5,200
Bank loans under interchangeable facilities including
letters of credit 4,775 1,212
Finance lease liability 182 64
10,157 6,476
====== ======
Note 21. Non-current liabilities - provisions
2017 2016
A$'000 A$'000
Employee benefits provision 332 368
====== ======
Note 22. Equity - share capital
2017 2016 2017 2016
Shares Shares A$'000 A$'000
Ordinary shares GBPnil each (2016:
GBPnil)
- issued and fully paid 151,331,652 151,331,652 - -
=========== =========== ====== ======
Authorised share capital
200,000,000 (2016: 200,000,000) ordinary shares of GBPnil each.
Note 23. Equity - other reserves
2017 2016
A$'000 A$'000
Foreign currency reserve 2,187 3,938
Hedging reserve - cash flow hedges (788) (1,047)
Share-based payments reserve 5,399 4,102
Capital reorganisation reserve (132,756) (132,756)
(125,958) (125,763)
========= =========
Movements in reserves
Movements in each class of reserve during the current and previous financial
year are set out below:
Foreign Share-based Capital
currency Hedging payments reorganisation Total
A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1 July
2015 6,099 21 3,705 (132,756) (122,931)
Foreign currency
translation (2,161) - - - (2,161)
Cash flow hedge - (1,068) - - (1,068)
Share-based
payments - - 397 - 397
Balance at 30 June
2016 3,938 (1,047) 4,102 (132,756) (125,763)
Foreign currency
translation (1,751) - - - (1,751)
Cash flow hedge - 259 - - 259
Share-based
payments - - 1,297 - 1,297
Balance at 30 June
2017 2,187 (788) 5,399 (132,756) (125,958)
======== ======= =========== ============== =========
Note 24. Equity - dividends
There were no dividends paid, recommended or declared during the current
or previous financial year.
Note 25. Contingent liabilities
The group has reduced its bank guarantees issued by ANZ Bank Limited ('ANZ'),
in respect of lease obligations amounting to A$nil (2016: A$874,000).
The group also issued a bank guarantee through its banker ANZ Bank New Zealand
Limited, in respect of customs and duties obligations amounting to NZ$150,000
(2016: NZ$150,000) and lease obligations to NZ$nil (2016: NZ$22,000).
The group issued bank guarantees through its banker, Hong Kong and Shanghai
Banking Corporation ('HSBC'), in respect of lease obligations amounting
to A$979,000 (2016: A$nil).
Note 26. Commitments
2017 2016
A$'000 A$'000
Lease commitments - operating
Committed at the reporting date but not recognised as
liabilities, payable:
Within one year 3,324 3,494
One to five years 9,138 10,167
12,462 13,661
Lease commitments - finance
Committed at the reporting date and recognised as liabilities,
payable:
Within one year 51 65
One to five years 149 -
Total commitment 200 65
Less: Future finance charges (18) (1)
Net commitment recognised as liabilities 182 64
Representing:
Finance lease liability - current (note 18) 39 64
Finance lease liability - non-current (note 20) 143 -
182 64
Sub-lease receivable - operating
Committed at the reporting date but not recognised as
assets, receivables:
Within one year 269 559
One to five years 289 585
558 1,144
====== ======
The group leases office space, land and buildings and warehouses from non-related
parties under non-cancellable operating lease agreements. The leases have
varying terms, escalation clauses and renewal rights.
The group leases certain plant and equipment, and motor vehicles from non-related
parties under finance leases. The lease agreements do not have renewal clauses
but provide the group with options to purchase the leased assets at nominal
values at the end of the lease term.
The carrying amounts of plant and equipment and motor vehicles held under
finance leases are A$nil (2016: A$29,000) and A$182,000 (2016: A$35,000)
respectively at the reporting date.
The company also subleases some of its office and warehouse space to related
and non-related parties. The subleases have varying terms and expiry dates.
Note 27. Earnings per share
2017 2016
A$'000 A$'000
Loss after income tax (982) (197)
Non-controlling interest - 20
Loss after income tax attributable to the owners of MySale
Group Plc (982) (177)
Add back items of a one-off, non-trading nature (note
6) 4,839 840
Underlying profit after income tax attributable to the
owners of MySale Group Plc 3,857 663
----------- -----------
Number Number
Weighted average number of ordinary shares used in
calculating
basic earnings per share 151,331,652 151,331,652
Weighted average number of ordinary shares used in
calculating
diluted earnings per share 151,331,652 151,331,652
=========== ===========
Cents Cents
Basic earnings per share (0.65) (0.12)
Diluted earnings per share (0.65) (0.12)
Underlying earnings per share 2.50 0.40
8,615,909 (2016: 5,539,326) employee long term incentives have been excluded
from the 2017 (2016) diluted earnings calculation as they are anti-dilutive
for the year.
Note 28. Share-based payments
The company established two new employee share plans prior to the AIM admission;
(1) the Executive Incentive Plan ('EIP') and (2) the Loan Share Plan ('LSP').
In accordance with the terms of each plan 100% of the ordinary shares will
vest three years from grant date subject to the achievement of the Underlying
Earnings Before Interest, Tax, Depreciation and Amortisation ('EBITDA')
included in the company's internal forecasts set by the Board in the year
of the grant.
In July 2015, 3,000,000 options over the ordinary share capital of the company
were granted to the Chairman with an exercise price of GBP0.53. 1,000,000
options will vest when the company's share price reaches GBP1.50, a further
1,500,000 shall vest when the company's share price reaches GBP2.26 and
a further 500,000 shall vest when the company's share price reaches GBP2.75.
The options expire five years after the grant date. Other than the vesting
conditions, all other terms are the same as the EIP. The fair value of the
accounting expense in relation to these options are recognised over the
vesting period.
Set out below are summaries of share and options granted under the plans
for directors and employees:
2017
Balance Balance
at Expired/ at
the start the end
Exercise of forfeited/ of
Grant date Expiry date price the year Granted Exercised other the year
16/06/2019
28/05/2014 *** GBP2.26 111,499 - - - 111,499
18/08/2020
18/08/2015 *** GBP0.51 2,027,806 - - - 2,027,806
18/08/2020
18/08/2015 ** GBP0.51 400,021 - - - 400,021
27/07/2020
27/07/2015 *** GBP0.53 3,000,000 - - - 3,000,000
19/08/2021
19/08/2016 *** GBP0.65 - 1,959,599 - - 1,959,599
19/08/2021
19/08/2016 ** GBP0.65 - 1,116,984 - - 1,116,984
5,539,326 3,076,583 - - 8,615,909
--------- --------- --------- ---------- ---------
** EIP - Options
*** LSP
2016
Balance Balance
at Expired/ at
the
start the end
Exercise of forfeited/ of
the
Grant date Expiry date price year Granted Exercised other the year
16/06/2015
28/05/2014 * GBP0.00 684,042 - (684,042) - -
16/06/2019
28/05/2014 *** GBP2.26 111,499 - - - 111,499
18/08/2020
18/08/2015 *** GBP0.51 - 2,027,806 - - 2,027,806
18/08/2020
18/08/2015 ** GBP0.51 - 400,021 - - 400,021
27/07/2020
27/07/2015 *** GBP0.53 - 3,000,000 - - 3,000,000
795,541 5,427,827 (684,042) - 5,539,326
------- --------- --------- ---------- ---------
* EIP - Share rights
** EIP - Options
*** LSP
The weighted average remaining contractual life of the share plan outstanding
at the end of the financial year was 4 years (2016: 4 years).
The share-based payment expense for the year was A$1,297,000 (2016: A$397,000).
Note 29. Events after the reporting period
The group's borrowing facility with Hong Kong and Shanghai Banking Corporation
increased to $13,353,000 (previously $13,120,000) in July 2017. The facility
is secured by a Corporate Guarantee.
The group's borrowing facility with ANZ Bank Limited reduced to $174,000
(previously $11,576,000) in July 2017. The facility is secured by a term
deposit security.
All bank guarantees with ANZ were released in August 2017.
No other matter or circumstance has arisen since 30 June 2017 that has significantly
affected, or may significantly affect the group's operations, the results
of those operations, or the group's state of affairs in future financial
years.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR KELFLDKFLBBK
(END) Dow Jones Newswires
September 26, 2017 02:01 ET (06:01 GMT)
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