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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 : 5472G
MySale Group PLC
26 November 2020
Hot Features
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MySale Group Plc
Final results for the financial year to 30 June 2020
A recapitalised, restructured and repositioned business with firm foundations for future growth
MySale Group plc (AIM: MYSL) (the "Group"), the leading international online retailer, is pleased to announce 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$15.9 million as at 31 October 2020.
"Our platform is being used by even more international brands, looking to take advantage of our Southern Hemisphere customer base and the associated counter seasonal inventory opportunity. The Group is now in an excellent position to accelerate the execution of its ANZ First Strategy, scaling the restructured business to deliver operational gearing which will flow through to the bottom line.
"As a consequence of MySale's focus on its 'ANZ First' strategy, the Group is evaluating the potential benefits of dual listing the Group on the Australian Stock Exchange. This review is at a preliminary stage and MySale will keep investors updated should any formal decisions be reached."
Year to 30 June (A$ FY20 FY19 million) 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
Enquiries :
MySale Group plc Carl Jackson, Chief Executive Officer Mats Weiss, Chief Financial Officer +61 (0) 414 817 843 N+1 Singer (Nominated Adviser and Broker) +44 (0) 20 7496 3000 Mark Taylor Justin McKeegan Carlo Spingardi Zeus Capital (Joint Broker) +44 (0) 20 3829 5000 Daniel Harris, Corporate Finance John Goold, Corporate Broking MHP Communications (Financial PR Adviser) +44 (0) 20 3128 8570 Simon Hockridge Giles Robinson Pete Lambie
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.
_____________________________
Charles Butler
Chairman
25 November 2020
Review of operations by the Chief Executive Officer
A recapitalised, restructured and repositioned business with firm foundations for future growth
Last year's strategic review concluded that the Group needed to reduce its costs, generate cash by selling down excess inventory and execute its ANZ First Strategy. I am pleased to report that we have completed all these actions and we now have a recapitalised, restructured, and repositioned business operating a world class platform providing unique solutions for our retail and brand partners.
Year to 30 June (A$ million) FY20 FY19 Revenue 131.0 208.6 Gross Profit 43.9 52.4^ Underlying EBITDA(*) (2.7) (18.8) Depreciation and Amortisation 7.5 6.9 Interest (0.4) (0.5) 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. Refer to note 6 for reconciliation to reported loss.
^Delivery costs to customers for the year ended 30 June 2019 of A$33,831,000 have been reclassified from Cost of sale of
goods to Selling and distribution expenses to be in line with the online retail industry
Whilst we have made substantial progress over the year, it has undoubtedly been a period of unprecedented challenges, and the environment that MySale operates in today is also very different from the environment MySale operated in last year.
COVID-19
Since the onset of the pandemic we have closely followed government guidance on safe working practices for all our employees, which remains our top priority. To date, colleagues who are able to work from home are doing so. Where this in not possible,we have put in place social-distancing procedures for our office an warehouse team. To date, we have not had any major operational business disruption as a result of these measures, and I am proud of the way that MYSALE has met this challenge head on, putting our duty to our stakeholders to act as a responsible business at the heart of our approach. Like most businesses, we have experienced some minor operational issues during this period of uncertainty, including the supply of inventory and reliability of international shipping, though we have carefully managed these challenges to ensure business continuity. The flexibility of our business model has been key here, allowing us to adapt quickly. In response to the pandemic, we sourced more product locally to ensure we remained relevant, while pivoting into complimentary categories including homewares, activewear and leisurewear to meet customer demand from the growing work from home market. Our inventory light platform allowed us to react quickly in line with this evolving trend ensuring we have the right merchandise mix.
Whilst the duration, severity and long-term impact of the pandemic remain unknown, we believe that there are a number of opportunities for Mysale as a result of our unique operating model. We have already seen an accelerated shift in consumer spending from physical retail to online; a trend which we expect will continue long after the pandemic is offer. There are also signs that COVID-19 has further strengthened the ANZ off-price channel(1) , particularly online.
MySale is well positioned to take advantage of these long-term trends.
Progress against strategic initiatives
While there have been some operational benefits to the Group as a result of widespread supply chain disruption across the global retail industry due to COVID 19, we had already made significant progress against our strategic initiatives as we entered our final quarter. This included a great deal of work to ensure we had the right financial and organizational structures to fulfil our ambitions.
Executing against our ANZ First strategy(2) required focus, making decisions at pace in order to resolve legacy issues, while prioritising some goals in favour of others. This meant we had to become a much smaller and nimble company with solid foundations before we could start to grow again.
We completed the cost reduction programme in the period, as outlined in the strategic review, including a significant reduction in fixed overheads and international freight, while reducing the Groups headcount from 307 in FY19 to 170 in FY20. The Group's cost base(3) has been significantly reduced to A$50.2 million (FY19: A$96.7 million).
The restructuring of our supply chain and decisive cost control measures put in place are now benefiting the Group, more than offsetting the reduction in revenues for the period (see page 10 for detail). We have rightsized the business and have been able to leverage the benefits of closing our UK and US warehouses and offices, reducing the headcount and centralising the Group structure into ANZ.
We are confident that the decisive action taken to recapitalise, restructure and reposition the business have left us in a stronger, more resilient position. Our underlying EBITDA loss improved from A$18.8 million to A$2.7 million, with profitable trading during the final quarter. We exited FY20 with substantially less inventory, having increased the cadence of own-buy promotional activity.
Although revenues have declined, the quality of revenues have improved with substantial improvements to our gross margin, which increased to 33.5% (FY19: 25.1%). We anticipate further improvement in gross margin during FY21.
We have also made significant progress in selling down aged owned inventory which will continue albeit at a reduced rate into FY21. In FY19, as a result in the changes to the Australian GST legislation, we restructured the supply chain and closed the UK and US warehouses which had an immediate negative impact on revenues. However, during the period we made good progress in re-engaging and renegotiating the commercial contracts with our international partners which allows us to provide them with either a direct shipment or third party freight solution ensuring they have an efficient counter seasonal solution for their excess inventory.
(1) Off-price is a trading format based on discount pricing
(2) Refer to page 16 for ANZ First Strategy
(3) Cost base is total expenses less depreciation & amortisation
Cash and Working capital
In September 2019 we raised A$23.3 million to repay and restructure existing bank facilities, leaving the Group debt free and with a cash balance of A$6.7 million.
The business is now operating a negative working capital model where it is able to generate cash quickly by selling products to customers before it has to pay its suppliers, reducing the cash risk on the Group's operating results and financial condition.
Post year- end we also raised A$9.3m from entities associated with both founders as well as the former CEO of Catch.com.au who built that business into one of Australia's most successful online retailers. The net proceeds will be used to expand and develop the Company's marketplace platform, as well as take advantage of excess inventory available around the world, to continue to improve the brand and inventory mix.
Cash generation and conservation was a key focus for us in FY20. Strict working capital management and the conversion into cash of the aged inventory resulted in a strong cash flow performance.
Going forward the Group has the right cost base, aligned to the new simplified business, to ensure future profitability. We are able to scale the revenue, leveraging efficiencies, with increased margins on a stable cost base.
A repositioned business
ANZ First Strategy and Partner Programme
Focusing on our ANZ First Strategy and developing our inventory light marketplace platform will further allow the Group to leverage operational efficiencies.
In line with our Platform Strategy, we have developed and launched MYSALE Solutions which is the engine of the business, providing Partner and Wholesale Solutions supported by three key service pillars: Technology, Operations and Data.
-- Technology : Our proprietary technology platform provides a modern, flexible and highly scalable solution that is designed to support the culture of continuous improvement, enabling us to react to partner requirements quickly. The platform capabilities are optimised to support our unique partner solutions effectively.
-- Data : Our Proprietary data platform provides in-depth analytics with real time business intelligence tools enabling MYSALE and our partners to respond quickly to data insights.
-- Operations : We offer our partners access to the MYSALE Fulfillment centers which provide them with flexibility, scalability and access to international customers.
We pride ourselves on offering flexible solutions for our partners. We will continue to scale, at pace, the number of new partners selling on the platform, focusing on delivering a daily discovery experience for discounted fashion, beauty, and homeware products to our customers.
-- 3(RD) Part Partner Programme -- Wholesale Programme - Own Stock
Own-stock inventory delivers significantly higher margins and an improved level of customer satisfaction. While we will increase the amount of In-Stock inventory, we will not repeat the mistakes of the past and have adopted a "test and repeat strategy"; buying width and not depth of product, thereby allowing us to turn the inventory very quickly.
In final quarter, over 85% of our revenue was delivered from our 3(rd) party platform partners compared to 2.9% from our "test and repeat" own stock inventory.
We are already making good progress scaling the amount of own-stock product and brands which represented 7.8% of sales in Q1 of the new financial year.
MYSALE Solutions resonates well with our UK and US partners as it provides them with a perfect counter seasonal platform solution to what has been a very difficult trading period due to Covid-19. We have faced some challenges securing inventory, due to key staff at retail partners being furloughed, while we have also experienced an increase in international freight costs due to reduced global air freight capacity.
As we enter FY21 more UK and US brands are now working on the MySale platform as we provide an efficient counter seasonal solution for their excess inventory.
The business will scale with a different cost base structure, as historically the fixed costs were too high relative to the variable costs and revenue growth. At its peak, in FY18, our fixed annual cost base was A$39.7m of which the UK and US overhead base was A$11.9m and did not deliver operational leverage. As part of the strategic review we closed our UK and US warehouse, exited our UK business and relocated the management team back to ANZ which has already delivered material benefits with our fixed cost base now reduced to A$15.8m in FY20.
The Market Opportunity
The Facts:
-- Australian eCommerce April online retail spend: 17.2%(1) -- New Zealand online retail spend: 9.8%(2)
Both markets significantly lag the UK (30%(3) ) and US (22%(4) ) eCommerce online retail spend.
Original industry forecasts were that by 2025 online shopping would account for 16-18%(1) of total retail spend. However, since the onset of the COVID-19 pandemic it is anticipated that this will accelerate significantly.
For our customers, our mission is to offer a daily discovery experience for discounted fashion, home and beauty brands; a place that our customers check every day before buying for themselves, family or friends.
For our retail and brand partners we continue to provide an efficient platform solution to accelerate their sales of previous seasons and excess current season merchandise. For our international partners it is an even more compelling solution as it allows them to take advantage of the counter seasonal opportunity selling into ANZ while not disrupting their core market.
This presents the opportunity for Mysale to continue targeting large pool of international supplier who will be interested in the counter seasonal opportunity as well as growing ANZ market.
(1) https://auspost.com.au/content/dam/auspost_corp/media/documents/2020-ecommerce-industry-report.pdf
(2) https://thefulldownload.co.nz/
(3) https://www.ben-evans.com/benedictevans/2020/8/18/the-ecommerce-surge
(4) https://www.ben-evans.com/benedictevans/2020/8/18/the-ecommerce-surge
The MySale Way
We have developed and launched The MySale Way, a new operational purpose for the Group that is encapsulated in the following core principles: Customer and Partners First, Entrepreneurial Thinking, Opportunities not Problems, Earn Trust, keep it Simple and Operate at Pace.
We aim to embed The MySale Way within the organization, to build a company culture that challenges everyone to operate at pace and think bigger putting our Customers and Partners First.
We have been very disciplined with our suppliers as we increase the focus on the customer experience and are already seeing improvements in our customer satisfaction scores driven by improved data and management focus. While there is still work to do, we are confident this will continue to improve.
Board and Management Changes
During the period, there have been a number of changes to the senior management team, including the appointment of Mats Weiss as new Chief Financial & Operations Officer and two new Non-Executive Directors. Subsequent to the year end, the management team has been strengthened through the appointment of a new Head of Buying, Head of Marketing, Head of Customer as well a number of appointments that have enhanced the buying teams.
Current Trading and Future Outlook
I am very proud of what our team has achieved this year. As a business, we finished FY20 in a strong position and in far better shape than when we started it, as the actions taken from the strategic review flowed into our financial results.
The Group is now operating on a cash generative and debt free basis following the post year end capital raise with cash balances of A$15.9 million as 31(st) October 2020 and further improvements to our gross margin during the first quarter of the new financial year.
While the Board is conscious of the ongoing uncertainty and operational risk caused by COVID-19 pandemic, for both our business and the global retail industry as a whole, it is pleasing to see the Group's strong trading momentum and increased interest from international partners in our unique offering has continued into the new financial year.
We have built a highly scalable low-cost business model and are now in a position where we can grow our business and execute our strategy as an off-price specialist, with a clear customer offering built around MySale Solutions. Our talented team is now re-focused on delivering growth through scaling our Partner Program and increasing the amount of high margin own inventory stock to deliver operational leverage as we further accelerate the ANZ First Strategy.
_____________________________
Carl Jackson
Chief Executive Officer
25 November 2020
Financial review by the Chief Financial Officer
FY20 has truly been a transformational year where we have exited non-core businesses, delivered a step-change in working capital and materially improved profitability. We have a continued focus on reducing our overall cost base, and during the financial year 2020 we have decreased operating expenses by 48.1%, to A$52.2m (FY19: A$96.7m).
The Inventory position on June 30, 2020 was A$2.8m, down A$13.2m vs. prior year (FY19: A$16.0m) due to transitioning the business to an inventory-light platform by selling down the aged ownbuy stock.
The business is now debt free and with a net cash balance of A$6.7m, operating a negative working capital model.
Revenue and gross profit^
For the year ended 30 June 2020 Group revenue decreased by 37 .2% to A$131.0 million (FY19: A$208.6 million) and gross profit decreased, by 16.2%, to A$43.9 million (FY19: A$52.4 million). Gross margin has increased in FY20 by 8.4ppt, to 33.5%.
Executing against our ANZ First strategy required focus, making decisions at pace in order to resolve legacy issues, while prioritising some goals in favour of others. This meant we had to become a much smaller and nimble company with solid foundations before we could start to grow again. We have also made significant progress in selling down aged owned inventory which will continue albeit at a reduced rate into FY21. In FY19, as a result of the changes to the Australian GST legislation, we restructured the supply chain and closed the UK and US warehouses which had an immediate negative impact on revenues.
The gross margin has continuously improved throughout the financial year ending the overall gross margin at 33.5% (FY19: 25.1%), this is a trend that has continued into the first quarter in FY21. This is a result of focusing on core revenue with stronger margins and holding our suppliers responsible for key KPI's.
Further to that, we have managed to decrease our freight costs as a share of revenue from 12.8% in the first quarter to 9.8% in Q4.
Operating expenses
The operating expenses reduced by 48.1% to A$50.2 million (FY19: A$96.7 million). In the FY20, the group received a government COVID-19 grant of A$0.9m.
The significant reduction of operating expenses has been achieved through automation and simplification of processes, closing of UK & US warehouses and relocation of the Australian Fulfilment Centre.
Variable costs have decreased in line with revenue, whilst we have successfully reduced the fixed costs share of revenue from 13.6% in FY19 to 12.1% in FY20. The reduction of fixed costs is a result of aligning the structure to fit the ANZ First Strategy, operating on an inventory light model. Headcounts have been reduced from 307 in FY19 to 170 in FY20.
Profit/loss before tax
The reported loss before tax for the year is A$3.4 million (FY19: A$58.2 million loss). This reported loss is after the inclusion of a number of one-off and non-cash items such as debt forgiveness and net foreign currency gain.
Profit/loss after tax and earnings per share
The reported loss after tax for the year is A$3.6 million (FY19: A$69.3 million loss). This reported loss for the prior year 2019 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 38 to the financial statements shows the detailed calculations of basic loss per share for the financial year which after tax was 0.53 cents per share loss (FY19: 44.92 cents loss) and was 0.41 cents loss (FY19: 12.21 cents loss) on underlying EBITDA.
Taxation
The group has recorded a tax expense of A$0.2 million for the year (FY19:A$11.1 million expense). Further detail of the tax expense is provided in note 9 to the financial statements. The Group has A$103.6 million (FY19: A$83.9 million) of carried forward tax losses that may be available to use for further offset. A deferred tax asset is only recorded where it is probable that these losses will be recoverable.
Balance sheet, cash and working capital
The Group's closing cash balance was A$6.7 million (FY19: A$0.8 million) and a borrowing of A$nil (FY19: A$18.4 million). The Group finalised a share placement of 640.4 million shares for A$23.3 million in September 2019. As part of the share placement, the Group agreed with its financier Hong Kong and Shanghai Banking Corporation Plc ('HSBC') to extinguish all borrowing facilities, Corporate Guarantees and Indemnities with a repayment of A$10.9 million. As part of this repayment HSBC agreed to provide the Group with a debt forgiveness amount of A$7.7 million. After these actions the business is debt free.
Capital investment was reduced on prior year investment levels as we focused on conserving cash and prioritizing the development projects in line with the business priorities. Whilst the majority of the capex is allocated to technology the business did relocate its warehouse which accounted for 37.5% of capital expenditure. Total capital expenditure was A$2.6m (FY19 A$5.0m). No impairment was considered necessary.
Trade & Other Receivables has been reduced to A$4.1m (FY19: A$10.0m) as a result of exiting the wholesale business and scaling down the share of business on Ourpay, the Groups owned BNPL solution.
Inventory value was recognised at the year-end as A$2.8 million (FY19: A$16.0 million). The significant decrease is a result of the continued focus on the ANZ First Strategy and developing our inventory light platform and successfully reducing the aged own-buy inventory.
Trade and other payables have also been significantly reduced, from A$33.0m in FY19 to A$19.0m in FY20. Trade payables has reduced as a natural consequence of revenue declining and the company being in a stronger cash position.
Post the FY20 year-end closing, the group raised A$9.1 million from entities associated with both founders as well as the former CEO of Catch.com.au who successfully built that business into one of Australia's most successful online retailers.
Banking facilities
Subsequent to the refinancing the Group are no longer relying on trade and overdraft financing to support the business operations. The sell down of 'ownbuy' inventory and the transition to an inventory light business model has reduced the overall reliance on external financing to support inventories and other working capital requirements.
Underlying basis
As noted above the Group manages its operations by looking at the underlying EBITDA which excludes the impact of a number of one-off and non-cash items of a non-trading nature as this, in the Board's opinion, provides a more representative measure of the Group's performance.
Year to 30 June (A$ million) FY20 FY19 ----------------------------------------- ------- ---------- Reported loss before tax (3.4) (58.2) Interest 0.4 0.5 Depreciation 7.5 6.9 Impairment of goodwill - 2.8 (Recovery) / Impairment of receivables (1.5) 6.8 Net gain on Cocosa websites - (2.7) Debt forgiveness (7.7) - Share based payments 0.3 (1.0) Reorganisation 1.8 2.5 Non-trading one-off costs (0.3) 3.1 Unrealised foreign exchange (gain)/loss (0.7) 1.6 Inventory write down 0.9 18.9 Underlying EBITDA* (2.7) (18.8)
* 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$33.8 million have been reclassified from Cost of sale of
goods to Selling and distribution expenses to be in line with the online retail industry
Key performance indicators
The Group manages its operations through the use of a number of key performance indicators ('KPI's') including revenue growth, gross margin %, Underlying EBITDA.
_____________________________
Mats Weiss
Chief Financial Officer
25 November 2020
MySale Group Plc
Statement of profit or loss and other comprehensive
income
For the year ended 30 June 2020
Consolidated
Note 2020 2019
A$'000 A$'000
Revenue from contracts with customers 4 131,032 208,596
Cost of sale of goods* (87,152) (156,178)
Gross profit 4 43,880 52,418
-------- ---------
Other operating gain, net 58,626 1,591
Interest income 4 -
Expenses
Selling and distribution expenses (37,015) (71,795)
Administration expenses (20,746) (31,814)
Impairment/(recovery) of receivables 11 2,262 (5,261)
Impairment of assets 16 - (2,832)
Finance costs 7 (400) (547)
-------- --------
Loss before income tax benefit/(expense) (3,389) (58,240)
Income tax benefit/(expense) 9(171) (11,090)
----- --------
Loss after income tax benefit/(expense) for the year
attributable to the owners of MySale Group Plc (3,560) (69,330)
Other comprehensive (loss)/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 28 - (38)
Exchange differences on translation of foreign operations 28 (2,125) 932
------- ----
Other comprehensive (loss)/income for the year, net
of tax (2,125) 894
------- ---
Total comprehensive loss for the year attributable
to the owners of MySale Group Plc (5,685) (68,436)
======= ========
Cents Cents
Basic and diluted earnings per share 38 (0.53) (44.92)
* Delivery costs to customers for the year ended 30 June 2019 of A$33,831,000
have been reclassified from Cost of sale of goods to Selling and distribution
expenses to be in line with the online retail industry.
The above statement of profit or loss and other comprehensive income should
be read in conjunction with the accompanying notes
MySale Group Plc
Balance sheet
As at 30 June 2020
Consolidated
Note 2020 2019
A$'000 A$'000
Assets
Current assets
Cash and cash equivalents 10 6,660 814
Trade and other receivables 11 4,107 9,985
Inventories 12 2,761 15,963
Income tax receivable 15 -
Other current assets 13 634 4,766
Total current assets 14,177 31,528
------ ------
Non-current assets
Property, plant and equipment 14 1,216 1,186
Right-of-use assets 15 5,362 -
Intangibles 16 30,168 34,480
Other non-current assets 17 1,629 -
Deferred tax 18 3,407 3,369
Total non-current assets 41,782 39,035
------ ------
Total assets 55,959 70,563
------ ------
Liabilities
Current liabilities
Trade and other payables 19 18,985 32,968
Contract liabilities 20 6,186 10,408
Borrowings 21 - 18,357
Lease liabilities 22 1,581 -
Income tax payable - 96
Provisions 23 2,428 4,415
Total current liabilities 29,180 66,244
------ ------
Non-current liabilities
Lease liabilities 24 5,048 -
Provisions 25 450 231
Total non-current liabilities 5,498 231
------ ------
Total liabilities 34,678 66,475
------ ------
Net assets 21,281 4,088
====== =====
Equity
Share capital 26 - -
Share premium account 27 328,971 306,363
Other reserves 28 (124,979) (123,125)
Accumulated losses (182,691) (179,130)
Equity attributable to the owners of MySale Group
Plc 21,301 4,108
Non-controlling interests 29 (20) (20)
Total equity 21,281 4,088
========= =========
The financial statements of MySale Group Plc (company number 115584) (Jersey) were approved by the Board of Directors and authorised for issue on 25 November 2020. They were signed on its behalf by:
___________________________ ___________________________ Carl Jackson Charles Butler Director Chairman 25 November 2020
The above balance sheet should be read in conjunction with the accompanying notes
MySale Group
Plc
Statement of
changes in
equity
For the year
ended 30 June
2020
Share
premium Other Accumulated Non-controlling
account reserves losses interest
Consolidated A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1
July 2018 306,363 (122,983) (109,800) (20) 73,560
Loss after
income tax
expense
for the year - - (69,330) - (69,330)
Other
comprehensive
income for
the year, net
of tax - 894 - - 894
Total
comprehensive
(loss)/income
for the year - 894 (69,330) - (68,436)
Transactions
with owners in
their capacity
as owners:
Share-based
payments (note
39) - (1,036) - - (1,036)
Balance at 30
June 2019 306,363 (123,125) (179,130) (20) 4,088
========== ========= =========== =============== ========
Share
premium Other Accumulated Non-controlling
Total
account reserves losses interest equity
Consolidated A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1
July 2019 306,363 (123,125) (179,130) (20) 4,088
Loss after
income tax
expense
for the year - - (3,561) - (3,561)
Other
comprehensive
loss for
the year, net
of tax - (2,125) - - (2,125)
Total
comprehensive
(loss)/income
for the year - (2,125) (3.561) - (5,686)
Transactions
with owners in
their capacity
as owners:
Issue of
ordinary
shares, net
of transaction
costs (note
27) 22,608 - - - 22,608
Share-based
payments (note
39) - 271 - - 271
Balance at 30
June 2020 328,971 (124,979) (182,691) (20) 21,281
========= ========= =========== =============== =========
The above statement of changes in equity should be read in conjunction with the accompanying notes
MySale Group Plc
Statement of cash flows
For the year ended 30 June 2020
Consolidated
Note 2020 2019
A$'000 A$'000
Cash flows from operating activities
Loss before income tax benefit/(expense) for the year (3,389) (58,240)
Adjustments for:
Depreciation and amortisation 7,520 6,937
Impairment of goodwill - 2,832
Net loss on disposal of property, plant and equipment 390 487
Net loss/(gain) on disposal of intangibles 128 (2,655)
Interest income (4) -
Interest expense 400 547
5,045 (50,092)
Change in operating assets and liabilities:
Decrease in trade and other receivables 7,320 20,153
Decrease in inventories 13,202 17,687
Decrease/(increase) in other operating assets 2,502 (399)
(Decrease)/increase in trade and other payables (17,307) 986
(Decrease)/increase in contract liabilities (4,222) 1,787
(Decrease)/increase in other provisions (578) 1,558
5,962 (8,320)
Interest received 4 -
Interest paid (51) (547)
Income taxes paid (321) (136)
Net cash from/(used in) operating activities 5,594 (9,003)
-------- --------
Cash flows from investing activities
Payments for property, plant and equipment (980) (94)
Payments for intangibles (1,633) (4,865)
Proceeds from disposal of property, plant and
equipment - 177
Proceeds from disposal of intangibles - 2,655
Net cash used in investing activities (2,613) (2,127)
------- -------
Cash flows from financing activities
Proceeds from issue of shares 26 22,608 -
Repayment of borrowings (5,200) -
Repayment of leases (1,163) (124)
Net cash (used in)/from financing activities 16,245 (124)
------- -----
Net increase/(decrease) in cash and cash equivalents 19,226 (11,254)
Cash and cash equivalents at the beginning of the
financial year (12,323) (938)
Effects of exchange rate changes on cash and cash
equivalents (243) (131)
Cash and cash equivalents at the end of the financial
year 10 6,660 (12,323)
======== ========
The above statement of cash flows should be read in conjunction with the accompanying notes
MySale Group Plc
Notes to the financial statements
30 June 2020
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 dollars.
The principal business of the Group is the operating of online shopping
outlets for consumer goods like ladies, men's 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.
Whilst the financial information included in this preliminary announcement
has been prepared on the basis of the requirements of International Financial
Reporting Standards ("IFRSs") in issue, as adopted by the European Union
("EU") and effective at 30 June 2020, this announcement does not itself
contain sufficient information to comply with IFRS.
The financial information set out in this preliminary announcement does
not constitute the Group's Consolidated financial statements for the years
ended 30 June 2020 or 30 June 2019.
The financial information for 2020 and 2019 is derived from the consolidated
financial statements for the year ended 30 June 2020 , which includes the
comparatives for year ended 30 June 2019 . The consolidated financial statements
for the year ended 30 June 2019 have been audited and delivered to the registrar
of companies with the Jersey Financial Services Commission ("JFSC"). The
financial statements for the year ended 30 June 2020 have been audited and
will be filed with the registrar of companies with the JFSC following the
Company's Annual General Meeting. The Independent Auditors Reports have
reported on the financial statements for the year ended 30 June 2020 and
the year ended 30 June 2019; the audit reports were (i) unqualified, (ii)
did not include a reference to any matters to which the auditor drew attention
by way of emphasis without qualifying their report and (iii) did not contain
a statement under section 113B (3) or (6) of the Companies (Jersey) Law
1991.
The registered office of the company is Ogier House, The Esplanade, 44 Esplanade
Street. Helier, JE4 9WG, Jersey and principal place of business is at 3/120
Old Pittwater Road, Brookvale, NSW 2100, Australia.
The financial statements were authorised for issue, in accordance with a
resolution of the Board of Directors, on 25 November 2020.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial
statements are set out below. These policies have been consistently applied
to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and
interpretations issued by the international Accounting Standard Board ("IASB')
which have been endorsed by the European Union that are mandatory for the
current reporting period.
The following Accounting Standards and Interpretations are most relevant
to the Group:
IFRS 16 Leases
The Group has adopted IFRS 16 from 1 July 2019. The standard replaces IAS
17 'Leases' and for lessees eliminates the classifications of operating
leases and finance leases. Except for short-term leases and leases of low-value
assets, right-of-use assets and corresponding lease liabilities are recognised
in the statement of financial position. Straight-line operating lease expense
recognition is replaced with a depreciation charge for the right-of-use
assets (included in administrative expenses) and an interest expense on
the recognised lease liabilities (included in finance costs). In the earlier
periods of the lease, the expenses associated with the lease under IFRS
16 will be higher when compared to lease expenses under IAS 17. However,
EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results
improve as the operating expense is now replaced by interest expense and
depreciation in profit or loss. For classification within the statement
of cash flows, the interest portion is disclosed in operating activities
and the principal portion of the lease payments are separately disclosed
in financing activities. For lessor accounting, the standard does not substantially
change how a lessor accounts for leases.
The Group lease portfolio is principally comprised of property leases of
buildings in relations to fulfilment centres and office space. The term
of the lease's ranges between 2 to 5 years.
Impact of adoption
IFRS 16 was adopted using the modified retrospective approach which does
not require the comparatives to be restated and the cumulative effect of
initially applying the standard is recognised in the opening balance of
accumulated losses at the transition date. The impact of adoption on opening
accumulated losses as at 1 July 2019 was as follows:
1 July
2019
A$'000
Operating lease commitments as at 1 July 2019 (IAS 17) 5,835
Finance lease commitments as at 1 July 2019 (IAS 17) 20
Operating lease commitments discount based on the weighted average
incremental borrowing rate of 5% (IFRS 16) (181)
Short-term leases not recognised as a right-of-use asset (IFRS
16) (3,945)
Low-value assets leases not recognised as a right-of-use asset
(IFRS 16) (5)
Right-of-use assets (IFRS 16) 1,724
Lease liabilities - current (IFRS 16) (541)
Lease liabilities - non-current (IFRS 16) (1,183)
(1,724)
Net change in opening accumulated losses as at 1 July 2019 -
=======
Practical expedients applied:
In adopting IFRS 16, the Group has used the following practical expedients
permitted by the standard:-- applied a single discount rate to a portfolio of leases with reasonably
similar characteristics;
-- accounted for operating leases with a remaining lease term of less than
12 months as at 1 July 2019 as short-term leases;
-- excluded initial direct costs for the measurement of the right-of-use
asset at the date of initial application;
-- used hindsight in determining the lease term where the contract contains
options to extend or terminate the lease; and
-- not apply IFRS 16 to contracts that were not previously identified as
containing a lease.
IFRIC 23 - Uncertainty over Income Tax Treatments
The Group has adopted Interpretation 23 from 1 July 2019. The interpretation
clarifies how to apply the recognition and measurement requirements of IAS
12 'Income Taxes' in circumstances where uncertain tax treatments exists.
The interpretation requires: the Group to determine whether each uncertain
tax treatment should be treated separately or together, based on which approach
better predicts the resolution of the uncertainty; the Group to consider
whether it is probable that a taxation authority will accept an uncertain
tax treatment; and if the Group concludes that it is not probable that the
taxation authority will accept an uncertain tax treatment, it shall reflect
the effect of uncertainty in determining the related taxable profit (tax
loss), tax bases, unused tax losses, unused tax credits or tax rates, measuring
the tax uncertainty based on either the most likely amount or the expected
value. In making the assessment it is assumed that a taxation authority
will examine amounts it has a right to examine and have full knowledge of
all related information when making those examinations. IFRIC 23 was adopted
using the modified retrospective approach and as such comparatives have
not been restated. There was no impact of adoption on opening retained profits
as at 1 July 2019.
New Accounting Standards and Interpretations not yet mandatory or early
adopted
International Financial Reporting Standards ('IFRS') and Interpretations
that have recently been issued or amended but are not yet mandatory, have
not been early adopted by the Group for the annual reporting period ended
30 June 2020. The Group's assessment of the impact of these new or amended
Accounting Standards and Interpretations, most relevant and material to
the Group, are set out below:
IASB new Conceptual Framework for Financial Reporting
The new framework is applicable for annual reporting periods beginning
on or after 1 January 2020 and the application of the new definition and
recognition criteria may result in future amendments to several accounting
standards. Furthermore, entities who rely on the conceptual framework in
determining their accounting policies for transactions, events or conditions
that are not otherwise dealt with under IFRS may need to revisit such policies.
The Group will apply the revised conceptual framework from 1 July 2020 and
at this time, the application of the Conceptual Framework is not expected
to have a material impact on the Group's financial statements.
Basis of preparation
These financial statements have been prepared in accordance with applicable
Jersey Law and International Financial Reporting Standards ('IFRS' or 'IFRSs')
as adopted for use in the European Union (the 'EU') and IFRS Interpretations
Committee interpretations (together 'EUIFRS').
Under Article 105(11) of the Companies (Jersey) Law 1991, a parent company
preparing consolidated financial statements need not present solus (parent
company only) financial information, unless required to do so by an ordinary
resolution of the Company's members. The Company's members did not pass
an ordinary resolution on this matter and hence Parent Company financial
information has not been presented for the year.
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Going concern
The consolidated financial statements have been prepared on a going concern
basis. In reaching their assessment, the Directors have considered a period
extending at least 12 months from the date of approval of these financial
statements.
The Group's business activities and nancial position, together with the
factors likely to affect its future development, performance and position,
are set out in section 4 of the Strategic Report. In addition, note 31 to
the financial statements includes the Company's objectives, policies and
processes for managing its capital; its nancial risk management objectives;
details of its nancial instruments; and its exposures to credit risk and
liquidity risk. The Group prepare budgets and cash ow forecasts to ensure
that the Group can meet its liabilities as they fall due.
As at 30 June 2020, the Group's current liabilities exceeds current assets
by A$15,003,000 (2019: A$34,716,000) and the Group has incurred a loss before
tax of A$3,389,000 (2019: A$58,240,000) and generated operating cash inflows
of A$5,594,000 (2019: cash outflows of A$9,003,000).
During the year, the Group finalised a share placement for A$23,329,000.
The Group also agreed with its financier Hong Kong and Shanghai Banking
Corporation Plc ('HSBC') to extinguish all borrowing facilities, Corporate
Guarantees and Indemnities with a repayment of A$10,914,000 in September
2019. As part of this repayment HSBC agreed to provide the Group with debt
forgiveness amount of A$7,753,000.
The uncertainty as to the future impact on the Group of the COVID-19 pandemic
has been considered as part of the Group's adoption of the going concern
basis. Subsequent to the end of the financial year, the Directors continue
to monitor developments and the potential impact of Covid-19 on the operational
and financial risks of the Group.
Immediate action has been taken to protect the cash resources of the business
until further certainty is gained. These measures include, but are not limited
to:
* strengthening the cash position by raising an
additional A$9,300,000 as of 8 October 2020
* obtaining government support as part of various
economic stimulus initiatives
The Directors have prepared cash flow forecasts covering a period to 30
June 2022. This assessment has included consideration of the forecast performance
of the business for the foreseeable future and the cash available to the
Group. In preparing these forecasts, the Directors have considered a number
of detailed sensitivities, including a worst case scenario considering the
potential impact of Covid-19.
If revenue were to fall in line with the worst case model, the Group would
take further remedial action to counter the reduction in pro t and cash
through a cost cutting exercise that would include staff redundancies and
general cost control measures.
Based on current trading, the worst case scenario is considered unlikely.
However, it is dif cult to predict the overall impact and outcome of COVID-19
at this stage, particularly if the second wave continues in to 2021. Nevertheless,
after making enquiries, and considering the uncertainties described above,
the directors have a reasonable expectation that the company has adequate
resources to continue in operational existence for the foreseeable future.
For these reasons, they continue to adopt the going concern basis in preparing
the annual report and accounts.
Critical accounting estimates
The preparation of the financial statements requires the use of certain
critical accounting estimates. It also requires management to exercise its
judgement in the process of applying the Group's accounting policies. The
areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements, are
disclosed in note 3.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities
of all subsidiaries of MySale Group Plc as at 30 June 2020 and the results
of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the Group has control. The
Group controls an entity when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability
to affect those returns through its power to direct the activities of the
entity. Subsidiaries are fully consolidated from the date on which control
is transferred to the Group. They are de-consolidated from the date that
control ceases.
Intercompany transactions, balances and unrealised gains on transactions
between entities in the Group are eliminated. Unrealised losses are also
eliminated unless the transaction provides evidence of the impairment of
the asset transferred. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method
of accounting. A change in ownership interest, without the loss of control,
is accounted for as an equity transaction, where the difference between
the consideration transferred and the book value of the share of the non-controlling
interest acquired is recognised directly in equity attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets
including goodwill, liabilities and non-controlling interest in the subsidiary
together with any cumulative translation differences recognised in equity.
The Group recognises the fair value of the consideration received and the
fair value of any investment retained together with any gain or loss in
profit or loss.
Non-controlling interest in the results and equity of subsidiaries are shown
separately in the statement of profit or loss and other comprehensive income,
balance sheet and statement of changes in equity of the Group. Losses incurred
by the Group are attributed to the non-controlling interest in full, even
if that results in a deficit balance.
Operating segments
Operating segments are presented using the 'management approach', where
the information presented is on the same basis as the internal reports provided
to the Chief Operating Decision Makers ('CODM'). The CODM is responsible
for the allocation of resources to operating segments and assessing their
performance.
Foreign currency translation
Foreign currency transactions
Foreign currency transactions are translated into the Company's functional
currency in Australian dollars using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation at reporting
date exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into the
Group's presentational currency using the exchange rates at the reporting
date. The revenues and expenses of foreign operations included in each of
the Statement of Profit or Loss and Statement of Comprehensive income are
translated into Australian dollars using the average exchange rates, which
approximate the rates at the dates of the transactions, for the period.
All resulting foreign exchange differences are recognised in other comprehensive
income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign
operation or net investment is disposed of.
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which
the Group is expected to be entitled in exchange for transferring goods
or services to a customer. For each contract with a customer, the Group:
identifies the contract with a customer; identifies the performance obligations
in the contract; determines the transaction price; allocates the transaction
price to the separate performance obligations on the basis of the relative
stand-alone selling price of each distinct good or service to be delivered;
and recognises revenue when or as each performance obligation is satisfied
in a manner that depicts the transfer to the customer of the goods or services
promised.
Sale of goods
The Group's revenue mainly comprises the sale of goods online, in-store,
and by wholesale to businesses. Revenue is recognised when control of the
goods has transferred to the customer at an amount that reflects the consideration
to which the Group expects to be entitled.
The Group operates mostly an online retail business selling men's, ladies
and children's apparel, accessories, beauty and homeware items. Revenue
from sale of goods is recognised at the point in time when the customer
obtains control of the goods, which is generally at the time of delivery.
Sales represent product delivered less actual and estimated future returns,
and slotting fees, rebates and other trade discounts accounted for as reductions
of revenue. Online sales are usually by credit card or online payment.
It is the Group's policy to sell its products to the customer with a right
of return within 30 days. Accruals for sales returns are estimated on the
basis of historical returns and are recorded so as to allocate them to the
same period in which the original revenue is recorded. The accrual for return
totalled A$387k at 30 June 2020 (FY19:A$407k)
Interest
Interest revenue is recognised as interest accrues using the effective interest
method. This is a method of calculating the amortised cost of a financial
asset and allocating the interest income over the relevant period using
the effective interest rate, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial asset to
the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive
payment is established.
Government grants
Grants from the government are recognised at their fair value where there
is a reasonable assurance that the grant will be received and the Group
will comply with all attached conditions. Government grants are recognised
in profit or loss over the period necessary to match with the costs that
they are intended to compensate. The Group received government grants relating
to COVID-19 wage subsidies in Australia, New Zealand and Singapore during
the year. The grants are netted off against employee costs in the statement
of profit or loss and are detailed in note 8.
Income tax
The income tax expense or benefit for the period is the tax payable on that
period's taxable income based on the applicable income tax rate for each
jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment
recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences
at the tax rates expected to be applied when the assets are recovered or
liabilities are settled, based on those tax rates that are enacted or substantively
enacted, except for:-- When the deferred income tax asset or liability arises from the initial
recognition of goodwill or an asset or liability in a transaction that
is not a business combination and that, at the time of the transaction,
affects neither the accounting nor taxable profits; or
-- When the taxable temporary difference is associated with interests in
subsidiaries, associates or joint ventures, and the timing of the reversal
can be controlled and it is probable that the temporary difference will
not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences
and unused tax losses only if it is probable that future taxable amounts
will be available to utilise those temporary differences and tax losses.
The carrying amount of recognised and unrecognised deferred tax assets are
reviewed at each reporting date. Deferred tax assets recognised are reduced
to the extent that it is no longer probable that future taxable profits
will be available for the carrying amount to be recovered. Previously unrecognised
deferred tax assets are recognised to the extent that it is probable that
there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally
enforceable right to offset current tax assets against current tax liabilities
and deferred tax assets against deferred tax liabilities; and they relate
to the same taxable authority on either the same taxable entity or different
taxable entities which intend to settle simultaneously.
MySale Group Plc (the 'head entity') and its wholly-owned Australian subsidiaries
plus Apac Sale Group Pte. Ltd. have formed an income tax consolidated group
under the tax consolidation regime. The head entity and each subsidiary
in the tax consolidated group continue to account for their own current
and deferred tax amounts. The tax consolidated group has applied the 'separate
taxpayer within group' approach in determining the appropriate amount of
taxes to allocate to members of the tax consolidated group.
Current and non-current classification
Assets and liabilities are presented in the balance sheet based on current
and non-current classification.
An asset is classified as current when: it is either expected to be realised
or intended to be sold or consumed in the Group's normal operating cycle;
it is held primarily for the purpose of trading; it is expected to be realised
within 12 months after the reporting period; or the asset is cash or cash
equivalent unless restricted from being exchanged or used to settle a liability
for at least 12 months after the reporting period. All other assets are
classified as non-current.
A liability is current when: it is expected to be settled in the Group's
normal operating cycle; it is held primarily for the purpose of trading;
it is due to be settled within 12 months after the reporting period; or
there is no unconditional right to defer the settlement of the liability
for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with
financial institutions, other short-term, highly liquid investments with
original maturities of three months or less that are readily convertible
to known amounts of cash and which are subject to an insignificant risk
of changes in value. For the statement of cash flows presentation purposes,
cash and cash equivalents also includes bank overdrafts, which are shown
within borrowings in current liabilities on the balance sheet.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently
measured at amortised cost using the effective interest method, less any
allowance for expected credit losses. Trade receivables consist of wholesale
debtor and online customer. Wholesale debtor are generally due for settlement
within 30 days of recognition and online customer are generally due for
settlement within 3-43 days
The Group has applied the simplified approach to measuring expected credit
losses, which uses a lifetime expected loss allowance. To measure the expected
credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for
expected credit losses.
Right of return assets
Right of return assets represents the right to recover inventory sold to
customers and is based on an estimate of customers who may exercise their
right to return the goods and claim a refund. Such rights are measured at
the value at which the inventory was previously carried prior to sale, less
expected recovery costs and any impairment.
Inventories
Goods for resale are stated at the lower of cost and net realisable value
on a 'weighted average cost' basis. Cost comprises purchase, delivery and
direct labour costs, net of rebates and discounts received or receivable.
Stock in transit is stated at the lower of cost and net realisable value.
Cost comprises of purchase and delivery costs, net of rebates and discounts
received or receivable.
Net realisable value is the estimated selling price in the ordinary course
of business less the estimated costs necessary to make the sale.
A provision is made to write down any obsolete or slow-moving inventory
to net realisable value, based on management's assessment of the expected
future sales of that inventory, the condition of the inventory and the seasonality
of the inventory.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated
depreciation and impairment. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.
Subsequent expenditure relating to plant and equipment that has already
been recognised is added to the carrying amount of the asset only when it
is probable that future economic benefits associated with the item will
flow to the Group and the cost of the item can be measured reliably. All
other repair and maintenance expenses are recognised in profit or loss when
incurred.
Depreciation is calculated on a straight-line basis to write off the net
cost of each item of property, plant and equipment over their expected useful
lives as follows:
Leasehold improvements 5-7 years
Plant and equipment 3-7 years
Fixtures and fittings 5-10 years
Motor vehicles 4-5 years
The residual values, useful lives and depreciation methods are reviewed,
and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the unexpired period of the
lease or the estimated useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or
when there is no future economic benefit to the Group. Gains and losses
between the carrying amount and the disposal proceeds are taken to profit
or loss.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease.
The right-of-use asset is measured at cost, which comprises the initial
amount of the lease liability, adjusted for, as applicable, any lease payments
made at or before the commencement date net of any lease incentives received,
any initial direct costs incurred, and, except where included in the cost
of inventories, an estimate of costs expected to be incurred for dismantling
and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired
period of the lease or the estimated useful life of the asset, whichever
is the shorter. Where the Group expects to obtain ownership of the leased
asset at the end of the lease term, the depreciation is over its estimated
useful life. Right-of use assets are subject to impairment or adjusted for
any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding
lease liability for short-term leases with terms of 12 months or less and
leases of low-value assets. Lease payments on these assets are expensed
to profit or loss as incurred.
Intangible assets
Externally acquired intangible assets are initially recognised at cost.
Indefinite life intangible assets are not amortised and are subsequently
measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The
gains or losses recognised in profit or loss arising from the derecognition
of intangible assets are measured as the difference between net disposal
proceeds and the carrying amount of the intangible asset. Useful lives of
finite life intangible assets are reviewed annually. Changes in the expected
pattern of consumption or useful life are accounted for prospectively by
changing the amortisation method or period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised.
Instead, goodwill is tested annually for impairment, or more frequently
if events or changes in circumstances indicate that it might be impaired,
and is carried at cost less accumulated impairment losses. Impairment losses
on goodwill are taken to profit or loss and are not subsequently reversed.
Customer relationships
Customer relationships acquired in a business combination are amortised
on a straight-line basis over the period of their expected benefit, being
their finite useful life of three years.
ERP system and software
Acquired enterprise resource planning ('ERP') systems and software costs
are initially capitalised at cost which includes the purchase price, net
of any discounts and rebates, and other directly attributable cost of preparing
the asset for its intended use. Direct expenditure including employee costs,
which enhances or extends the performance of these systems beyond its specifications
and which can be reliably measured, is added to the original costs incurred.
These costs are amortised on a straight-line basis over the period of their
expected benefit, being their finite useful lives of between three and five
years.
Costs associated with maintenance are recognised as an expense in profit
or loss when incurred.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life
are not subject to amortisation and are tested annually for impairment,
or more frequently if events or changes in circumstances indicate that they
might be impaired. Other non-financial assets are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount
by which the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of
disposal and value-in-use. The value-in-use is the present value of the
estimated future cash flows relating to the asset using a pre-tax discount
rate specific to the asset or cash-generating unit to which the asset belongs.
Assets that do not have independent cash flows are grouped together to form
a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the
Group prior to the end of the financial year and which are unpaid. Trade
and other payables are initially recognised at fair value and subsequently
measured at amortised cost. Due to their short-term nature they are not
discounted. The amounts are unsecured and are usually paid within 30 days
of recognition.
Contract liabilities
Contract liabilities represent the Group's obligation to transfer goods
or services to a customer and are recognised when a customer pays consideration,
or when the Group recognises a receivable to reflect its unconditional right
to consideration (whichever is earlier) before the Group has transferred
the goods or services to the customer.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration
received, net of transaction costs. They are subsequently measured at amortised
cost using the effective interest method.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The
lease liability is initially recognised at the present value of the lease
payments to be made over the term of the lease, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily determined,
the Group's incremental borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that
depend on an index or a rate, amounts expected to be paid under residual
value guarantees, exercise price of a purchase option when the exercise
of the option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or
a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest
method. The carrying amounts are remeasured if there is a change in the
following: future lease payments arising from a change in an index or a
rate used; residual guarantee; lease term; certainty of a purchase option
and termination penalties. When a lease liability is remeasured, an adjustment
is made to the corresponding right-of use asset, or to profit or loss if
the carrying amount of the right-of-use asset is fully written down.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part
of the asset. All other finance costs are expensed in the period in which
they are incurred.
Provisions
Provisions are recognised when the Group has a present (legal or constructive)
obligation as a result of a past event, it is probable the Group will be
required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation. The amount recognised as a provision is the
best estimate of the consideration required to settle the present obligation
at the reporting date, taking into account the risks and uncertainties surrounding
the obligation. If the time value of money is material, provisions are discounted
using a current pre-tax rate specific to the liability. The increase in
the provision resulting from the passage of time is recognised as a finance
cost.
Refund liabilities
Refund liabilities are recognised where the Group receives consideration
from a customer and expects to refund some, or all, of that consideration
to the customer. A refund liability is measured at the amount of consideration
received or receivable for which the Group does not expect to be entitled
and is updated at the end of each reporting period for changes in circumstances.
Historical data is used across product lines to estimate such returns at
the time of sale based on an expected value methodology.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries and other employee benefits expected
to be settled wholly within 12 months of the reporting date are measured
at the amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
Employee benefits not expected to be settled within 12 months of the reporting
date are measured as the present value of expected future payments to be
made in respect of services provided by employees up to the reporting date.
Consideration is given to expected future wage and salary levels, experience
of employee departures and periods of service. Expected future payments
are discounted using market yields at the reporting date on high quality
corporate bonds with terms to maturity and currency that match, as closely
as possible, the estimated future cash outflows.
Long-term employee incentive plan
The Group operates an employee incentive plan to reward and retain key employees.
The Group recognises a provision where contractually obliged or where there
is a past practice that has created a constructive obligation.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
There are no cash-settled share-based compensation benefits.
Equity-settled transactions are awards of shares, or options over shares,
that are provided to employees in exchange for the rendering of services.
The cost of equity-settled transactions are measured at fair value on grant
date. Fair value is independently determined using Black-Scholes option
pricing model that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and expected
price volatility of the underlying share, the expected dividend yield and
the risk free interest rate for the term of the option, together with non-vesting
conditions that do not determine whether the Group receives the services
that entitle the employees to receive payment. No account is taken of any
other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with
a corresponding increase in equity over the vesting period. The cumulative
charge to profit or loss is calculated based on the grant date fair value
of the award, the best estimate of the number of awards that are likely
to vest and the expired portion of the vesting period. The amount recognised
in profit or loss for the period is the cumulative amount calculated at
each reporting date less amounts already recognised in previous periods.
Market conditions are taken into consideration in determining fair value.
Therefore any awards subject to market conditions are considered to vest
irrespective of whether or not that market condition has been met, provided
all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised
as if the modification has not been made. An additional expense is recognised,
over the remaining vesting period, for any modification that increases the
total fair value of the share-based compensation benefit as at the date
of modification.
If the non-vesting condition is within the control of the Group or employee,
the failure to satisfy the condition is treated as a cancellation. If the
condition is not within the control of the Group or employee and is not
satisfied during the vesting period, any remaining expense for the award
is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested
on the date of cancellation, and any remaining expense is recognised immediately.
If a new replacement award is substituted for the cancelled award, the cancelled
and new award is treated as if they were a modification.
Share capital
Financial instruments issued by the Group are classified as equity only
to the extent that they do not meet the definition of a financial liability
or financial asset. The Group's ordinary shares are classified as equity
instruments.
Share capital represents the nominal value of shares that have been issued.
Share premium includes any premiums received on issue of share capital.
Any transaction costs associated with the issuing of shares are deducted
from share premium, net of any related income tax.
Own equity instruments that are reacquired (treasury shares) are recognised
at cost and deducted from equity. No gain or loss is recognised in profit
or loss on the purchase, sale, issue or cancellation of the Group's own
equity instruments. Any difference between the carrying amount and the consideration,
if reissued, is recognised in the share premium.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable
to the owners of MySale Group Plc, excluding any costs of servicing equity
other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary
shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination
of basic earnings per share to take into account the after income tax effect
of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have
been issued for no consideration in relation to dilutive potential ordinary
shares. Diluted earnings per share is not calculated if anti-dilutive.
Value Added Tax ('VAT'), Goods and Services Tax ('GST') and other similar
taxes
Revenues, expenses and assets are recognised net of the amount of associated
VAT/GST, unless the VAT/GST incurred is not recoverable from the tax authority.
In this case it is recognised as part of the cost of the acquisition of
the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of VAT/GST receivable
or payable. The net amount of VAT/GST recoverable from, or payable to, the
tax authority is included in other receivables or other payables in the
balance sheet.
Cash flows are presented on a gross basis. The VAT/GST components of cash
flows arising from investing or financing activities which are recoverable
from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of VAT/GST
recoverable from, or payable to, the tax authority.
Rounding of amounts
Amounts in this report have been rounded off to the nearest thousand dollars,
or in certain cases, the nearest dollar.
Change in accounting policy - delivery costs
Certain comparatives in the statement of profit or loss and other comprehensive
income have been reclassified, where necessary, to be consistent with current
period presentation. In particular, delivery costs to customers for the
year ended 30 June 2019 of A$33,831,000 have been reclassified from Cost
of sale of goods to Selling and distribution expenses. This change in accounting
policy is to ensure that the presentation of costs within the statement
of profit or loss and other comprehensive income is in line with the online
retail industry.
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.
Judgements:
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. The Group has adopted Interpretation
IFRIC 23 (note 2) from 1 July 2019 which clarifies how to apply the recognition
and measurement requirements of IAS 12 'Income Taxes' in circumstances where
uncertain tax treatments exists and there was no impact of adoption on opening
accumulated losses as at 1 July 2019."
Lease term
The lease term is a significant component in the measurement of both the
right-of-use asset and lease liability. Judgement is exercised in determining
whether there is reasonable certainty that an option to extend the lease
or purchase the underlying asset will be exercised, or an option to terminate
the lease will not be exercised, when ascertaining the periods to be included
in the lease term. In determining the lease term, all facts and circumstances
that create an economical incentive to exercise an extension option, or
not to exercise a termination option, are considered at the lease commencement
date. Factors considered may include the importance of the asset to the
Group's operations; comparison of terms and conditions to prevailing market
rates; incurrence of significant penalties; existence of significant leasehold
improvements; and the costs and disruption to replace the asset. The Group
reassesses whether it is reasonably certain to exercise an extension option,
or not exercise a termination option, if there is a significant event or
significant change in circumstances.
Estimates:
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined,
an incremental borrowing rate is estimated to discount future lease payments
to measure the present value of the lease liability at the lease commencement
date. Such a rate is based on what the Group estimates it would have to
pay a third party to borrow the funds necessary to obtain an asset of a
similar value to the right-of-use asset, with similar terms, security and
economic environment.
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.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of
estimation and judgement. It is based on the lifetime expected credit loss,
grouped based on days overdue, and makes assumptions to allocate an overall
expected credit loss rate for each group. These assumptions include recent
sales experience and historical collection rates.
Provision for impairment of 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 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. An impairment charge was required during the financial
year ended 30 June 2020 for A$nil (2019: A$2,832,000). Refer to note 16
for further details.
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. Significant
judgement is required to determine the amount of deferred tax assets that
can be recognised based on the estimates and assumptions made in relation
to the timing and level of future taxable amounts that will be available.
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 country's 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 2020 there were no major customers (2019:
none). A customer is considered major if its revenues are 10% or more of
the Group's revenue.
Operating segment information
Australia
and South-East
New Zealand Asia Total
Consolidated - 2020 A$'000 A$'000 A$'000
Revenue
Sales to external customers transferred at a
point in time 118,107 12,925 131,032
Total revenue 118,107 12,925 131,032
----------- ---------- --------
Gross profit 38,943 4,937 43,880
----------- ----------
Other operating gain, net 8,626
Selling and distribution expenses (37,015)
Administration expenses (20,746)
Finance income 4
Finance costs (400)
Recovery of receivables 2,262
Loss before income tax expense (3,389)
Income tax expense (171)
--------
Loss after income tax expense (3,560)
--------
Australia Rest of
and South-East the
New Zealand Asia world Total
Consolidated - 2019 A$'000 A$'000 A$'000 A$'000
Revenue
Sales to external customers
transferred
at a point in time 166,082 28,386 14,128 208,596
Total revenue 166,082 28,386 14,128 208,596
----------- ---------- ------- --------
Gross profit - restated* 44,786 4,865 2,767 52,418
----------- ---------- -------
Other operating gain, net 1,591
Selling and distribution expenses (71,795)
Administration expenses (31,814)
Finance costs (547)
Impairment of receivables (5,261)
Impairment of assets (2,832)
Loss before income tax expense (58,240)
Income tax expense (11,090)
--------
Loss after income tax expense (69,330)
--------
No customers are located outside Australia, New Zealand, and South-East Asia in 2020, hence revenue for the Rest of the World is A$nill, with operations now closed. In 2019 revenue in the Rest of the World segment was A$14,128,000. In May 2019, the Group sold its Cocosa website, which served the Group's customers in the UK market. The closure of the US and UK warehouses, which sourced the rest of the world operating segment, commenced in 2019 and was completed in 2020. Following the reorganisation,and given the location of the Group's customers in 2020, there is no longer a Rest of the World segment to be reported.
*Delivery costs to customer for the year ended 30 June 2019 of A$33,831,000 have been reclassified from Cost of Goods to Selling and Distribution expenses to be in line with the online retail industry.
Note 5. Other operating gain, net
Consolidated
2020 2019
A$'000 A$'000
Net foreign exchange gain/(loss) 893 (692)
Net loss on disposal of property, plant and equipment (23) (487)
Net gain on disposal of asset * - 2,655
Debt forgiveness ** 7,723 -
Other income 33 115
Other operating gain, net 8,626 1,591
====== ======
* In May 2019, the Group sold its Cocosa websites through an asset sale
for a net gain on sale of A$2,655,000.
**In September 2019, the Group finalised a share placement for A$23,329,000.
Net proceeds after considering the share issue costs of A$721,000 was A$22,608,000.
The total number of new shares issued under the placement was 640,376,083
bringing the total shares on issue to 794,707,735. At the same time as the
share placement, the Group agreed with its financier Hong Kong and Shanghai
Banking Corporation Plc ('HSBC') to extinguish all borrowing facilities,
Corporate Guarantees and Indemnities with a repayment of A$10,914,000 in
September 2019. As part of this repayment HSBC agreed to provide the Group
with a debt forgiveness amount of A$7,723,000.
Note 6. EBITDA reconciliation (earnings before interest, taxation, depreciation
and amortisation) and exceptional items
Consolidated
2020 2019
A$'000 A$'000
EBITDA reconciliation
Loss before income tax (3,389) (58,240)
Less: Interest income (4) -
Add: Interest expense 400 547
Add: Depreciation and amortisation 7,526 6,937
EBITDA 4,533 (50,756)
======= ========
Underlying EBITDA represents EBITDA adjusted for certain items, as outlined
below.
Consolidated
2020 2019
A$'000 A$'000
Underlying EBITDA reconciliation
EBITDA 4,533 (50,756)
Impairment of goodwill - 2,832
(Recovery)/impairment of receivables (1,505) 6,760
Net gain on disposal of Cocosa websites and trademarks
(note 5) - (2,655)
Debt forgiveness (note 5) (7,723) -
Share-based payments 271 (1,036)
Reorganisation costs* 1,796 2,502
One-off costs of non-trading, non-recurring nature including
acquisition expenses (288) 3,096
Inventory write down 948 18,941
Unrealised foreign exchange loss (763) 1,468
Underlying EBITDA (2,731) (18,848)
======= ========
* Costs in relation to the closure of overseas operations.
Management has presented the EBITDA and underlying EBITDA because these
are performance measures used to monitor and understand the Group's financial
performance. EBITDA is calculated by adjusting loss before income tax from
continuing operations to exclude the impact of taxation, interest income,
interest expense, depreciation and amortisation. Underlying EBITDA is calculated
as EBITDA adjusted for certain items including impairment losses/reversals
related to goodwill and receivables, share-based payments and unrealised
foreign exchange loss/gain. Underlying EBITDA and EBITDA are not defined
performance measures in IFRS Standards.
In 2019, the group disclosed certain costs as exceptional items in the Statement
of profit or loss and comprehensive income. There were no such costs that
occurred in 2020. A breakdown of the exceptional costs are shown below:
Consolidated
2019
A$'000
Exceptional items
Cost of sale of goods 19,611
Other operating (gain)/loss, net (848)
Sales, distribution and administration expenses:
Staff costs (384)
Merchant and other professional fees 307
Other administration cost 3,630
Impairment of receivable 6,760
Impairment of assets 2,832
------------
Total 31,908
============
The group considers items of income and expenses as exceptional where the
nature of the item, or its magnitude, is material and likely to be non-recurring
in nature so as to assist the user of the financial statements to better
understand the results of the core operations of the Group. These costs
have not been disclosed separately on the face of the statement of profit
or loss and other comprehensive income within these financial statements.
An explanation of the exceptional costs incurred in 2019 are set out below.
Staff costs
During the 2019 financial year, staff related exceptional costs related
to the integrating previously acquired businesses onto the Group's online
platform.
Cost of sale of goods
Cost of sale of goods adjustment relates to the write down of the Group's
ownbuy and outlet stock at year end.
Merchant and other professional fees
This relates to the professional fees paid for potential acquisitions and
business restructure initiatives.
Other administration cost
Other administration cost relates to non-recurring restructuring costs and
provisions recognised by the business.
Impairment of receivables
An impairment of $6,760,000 has been recognised against the Group's wholesale
business receivables.
Impairment of assets - goodwill
An impairment of $2,832,000 has been recognised against goodwill relating
to the Online Retail CGU.
Note 7. Expenses
Consolidated
2020 2019
A$'000 A$'000
Loss before income tax includes the following specific
expenses:
Sales, distribution and administration expenses:
Staff costs (note 8) 17,823 24,897
Marketing expenses 8,297 18,725
Delivery costs * 14,776 33,831
Short term leases 1,577 6,442
Low value leases 26 -
Merchant and other professional fees 4,638 7,985
Depreciation and amortisation 7,526 6,937
Other administration costs 3,098 4,792
Total sales, distribution and administration expenses 57,761 103,609
Finance costs
Interest and finance charges paid/payable on borrowings 159 547
Interest and finance charges paid/payable on lease liabilities 241 -
Finance costs expensed 400 547
Leases
Minimum lease payments - 4,907
------ -------
* Delivery costs to customer for the year ended 30 June 2019 of A$33,831,000 have been reclassified from Cost of Goods to Selling and Distribution expenses to be in line with the online retail industry.
Note 8. Staff costs
Consolidated
2020 2019
A$'000 A$'000
Aggregate remuneration:
Wages and salaries * 14,922 21,473
Social security costs 1,344 1,876
Long term employee incentive plan (note 39) 271 (1,036)
Other staff costs and benefits 1,286 2,584
Total staff costs 17,823 24,897
====== =======
* During the financial year and related to the COVID-19 pandemic, certain
entities within the Group received JobKeeper support payments from the Australian
government and wage subsidies from the New Zealand and Singapore governments.
The relevant entities are eligible for JobKeeper support from the Australian
government on the condition that employee benefits continue to be paid.
The New Zealand wage subsidy, recognised during the financial year, commenced
in March 2020 and covered a 12 week period. These subsidies were passed
on to the eligible employees and have been recognised in the financial statements
net of employment costs over the relevant periods. The net impact (gross
amount less top up payments to casual employees) recognised in the statement
of profit or loss during the financial year was A$947,000 (FY19: A$Nil)
in respect of JobKeeper and A$91,000 (FY19: A$Nil) in respect of New Zealand
and Singapore wage subsidies.
Consolidated
2020 2019
The average monthly number of employees (including executive
directors and those on a part-time basis) was:
Sales and distribution 81 131
Administration 89 176
170 307
====== ======
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
Consolidated
2020 2019
A$'000 A$'000
Income tax (benefit)/expense
Current tax 160 247
Deferred tax - origination and reversal of temporary differences - 10,594
Adjustment recognised for prior years 11 249
Aggregate income tax (benefit)/expense 171 11,090
Deferred tax included in income tax (benefit)/expense
comprises:
Decrease/(increase) in deferred tax assets (note 18) - 10,594
Numerical reconciliation of income tax (benefit)/expense
and tax at the statutory rate
Loss before income tax benefit/(expense) (3,389) (58,240)
Tax at the statutory tax rate of 30% (2019 - 30%) (1,017) (17,472)
Tax effect amounts which are not deductible/(taxable)
in calculating taxable income:
Effect of overseas tax rates 65 (860)
(Non-taxable income/Non-deductible expenses (2,456) 865
Tax-exempt income (18) (34)
(3,426) (17,501)
Prior year tax losses not recognised now recognised 34 (1,612)
Change in recognised deductible temporary differences 3,552 29,954
Adjustment recognised for prior periods 11 249
Income tax expense 171 11,090
======= ========
The tax rates of the main jurisdictions are Australia 30% (2019: 30%), Singapore
17% (2019: 17%), New Zealand 28% (2019: 28%), United Kingdom 19% (2019:
19%) and United States 21% (2019: 21%).
Note 10. Current assets - cash and cash equivalents
Consolidated
2020 2019
A$'000 A$'000
Cash at bank 6,550 703
Bank deposits at call 110 111
6,660 814
Reconciliation to cash and cash equivalents at the end
of the financial year
The above figures are reconciled to cash and cash equivalents
at the end of the financial year as shown in the statement
of cash flows as follows:
Balances as above 6,660 814
Bank overdraft (note 21) - (13,137)
Balance as per statement of cash flows 6,660 (12,323)
====== ========
Note 11. Current assets - trade and other receivables
Consolidated
2020 2019
A$'000 A$'000
Trade receivables 2,479 11,307
Less: Allowance for expected credit losses (183) (5,389)
2,296 5,918
Other receivables 369 1,107
Sales tax receivable 1,442 2,960
4,107 9,985
====== =======
Trade receivables include uncleared cash receipts due from online customers
which amounted to A$2,261,000(2019: A$5,303,000).
Allowance for expected credit losses
The Group has recognised a recovery of A$2,262,000 (2019: loss of A$5,261,000)
in profit or loss in respect of impairment of receivables for the year ended
30 June 2020.
The ageing of the trade receivables and the merchant receivables (uncleared
cash receipts due from online customers) and allowance for expected credit
losses provided for above are as follows:
Expected credit Allowance for
loss expected
rate Carrying amount credit losses
2020 2019 2020 2019 2020 2019
Consolidated % % A$'000 A$'000 A$'000 A$'000
Wholesale and
other
trade
receivable:
Not overdue - 11.00% 96 1,913 - 210
1-30 days
overdue - - 109 - - -
Over 61 days 100.00% 93.00% 13 4,115 13 3,827
-------- ------- --------- ---------
218 6,028 13 4,037
Merchant
receivables:
1-30 days
overdue 0.10% 4.90% 2,061 3,561 2 174
31-60 days
overdue 56.44% 11.50% 74 477 42 55
Over 61 days 100.00% 90.50% 126 1,241 126 1,123
2,261 5,279 170 1,352
2,479 11,307 183 5,389
======== ======= ========= =========
The Group has increased its monitoring of debt recovery as there is an increased
probability of customers delaying payment or being unable to pay, due to
the Coronavirus (COVID-19) pandemic. As a result, the calculation of expected
credit losses has been revised as at 30 June 2020 and rates have increased
in the category over 61 days overdue for wholesale and over 31 days overdue
for merchant.
Movements in the allowance for expected credit losses are as follows:
Consolidated
2020 2019
A$'000 A$'000
Opening balance 5,389 311
Additional provisions recognised - 5,078
Unused amounts reversed (2,262) -
Receivables written off during the year as uncollectable (2,944) -
Closing balance 183 5,389
======= ======
Note 12. Current assets - inventories
Consolidated
2020 2019
A$'000 A$'000
Goods for resale 8,968 21,556
Obsolete and slow-moving inventory provision (6,207) (7,249)
2,761 14,307
Stock in transit - 1,656
2,761 15,963
======= =======
Write-downs of inventories to net realisable value recognised as an expense
during the year ended 30 June 2020 amounted to A$947,592 (2019: A$18,941,000).
This expense has been included in 'cost of sales' in profit or loss.
Note 13. Current assets - Other current assets
Consolidated
2020 2019
A$'000 A$'000
Prepayments 284 738
Prepaid inventory * 90 3,406
Other deposits - 266
Right of return assets 260 292
Other current assets - 64
634 4,766
====== ======
* Prepaid inventory relates to the costs of goods for resale that have
been paid for by the Group but not delivered to its distribution centres
for further dispatch to the customers who placed the orders as at the
reporting date. The corresponding cash received in advance from customers
are accounted for within the contract liabilities category in the balance
sheet which includes the total amount of cash received for the goods
not delivered to customers at the reporting date. This amount has reduced
through a faster dispatch process and most product being shipped from
the Australian warehouse.
Note 14. Non-current assets - property, plant and equipment
Consolidated
2020 2019
A$'000 A$'000
Leasehold improvements - at cost 1,949 1,367
Less: Accumulated depreciation (1,185) (1,058)
764 309
Plant and equipment - at cost 5,027 4,996
Less: Accumulated depreciation (4,670) (4,381)
357 615
Fixtures and fittings - at cost 940 1,169
Less: Accumulated depreciation (845) (926)
95 243
Motor vehicles - at cost 209 239
Less: Accumulated depreciation (209) (220)
- 19
1,216 1,186
======= =======
Reconciliations
Reconciliations of the written down values at the beginning and end of the
current and previous financial year are set out below:
Leasehold Plant and Fixtures Motor
improvements equipment and fittings vehicles Total
Consolidated A$'000 A$'000 A$'000 A$'000 A$'000
Opening net book
amount at 1
July 2018 612 1,310 437 212 2,571
Additions 36 57 1 - 94
Disposals (174) (273) (31) (177) (655)
Exchange differences 1 (10) 9 4 4
Depreciation expense (166) (469) (173) (20) (828)
Closing net book
amount at 30
June 2019 309 615 243 19 1,186
Additions 622 48 1 - 671
Disposals 0 0 (65) (16) (81)
Depreciation expense (167) (306) (84) (3) (560)
Closing net book
amount at 30
June 2020 764 357 95 - 1,216
============ ========= ============ ======== ======
Assets pledged as security
Refer to note 21 for property, plant and equipment pledged as security.
Depreciation expense is included in the 'administration expenses' in profit
or loss.
Note 15. Non-current assets - right-of-use assets
Consolidated
2020 2019
A$'000 A$'000
Opening cost on adoption of IFRS 16 1,724
Additions 4,781
Less: Accumulated depreciation (1,143) -
5,362 -
======= ======
Property Equipment Total
Consolidated A$'000 A$'000 A$'000
Opening cost on adoption of
IFRS 16 1,673 51 1,724
Additions 4,781 - 4,781
-------- --------- -------
Cost at 30 June 2020 6,454 51 6,505
Depreciation on adoption of
IFRS 16 - - -
Depreciation charge for year (1,130) (13) (1,143)
-------- --------- -------
Accumulated depreciation at
30 June 2020 (1,130) (13) (1,143)
NBV at 01 July 2020 1,673 51 1,724
-------- --------- -------
NBV at 30 June 2020 5,324 38 5,362
======== ========= =======
The Group leases buildings for its offices, warehouses and retail outlets
under agreements of between 1 to 5 years with, in some cases, options to
extend. The leases have various escalation clauses. On renewal, the terms
of the leases are renegotiated.
The Group leases office equipment under agreements of less than 1 year.
These leases are either short-term or low value, so have been expensed as
incurred and not capitalised as right-of-use assets. Details of the amounts
recognised in the income statement are included in Note 7. The total cash
outflow for leases for the year amounted to A$1,163,000.
Note 16. Non-current assets - intangibles
Consolidated
2020 2019
A$'000 A$'000
Goodwill - at cost 21,214 21,221
Customer relationships - at cost 3,850 1,846
Less: Accumulated amortisation (3,718) (1,702)
132 144
Software - at cost * 28,001 26,492
Less: Accumulated amortisation (19,608) (14,296)
8,393 12,196
ERP system 4,905 3,300
Less: Accumulated amortisation (4,476) (2,381)
429 919
30,168 34,480
======== ========
*2019 cost base and accumulated amortisation was understated by A$3,032,000,
however the net book value is correct.
Reconciliations
Reconciliations of the written down values at the beginning and end of the
current and previous financial year are set out below:
Customer ERP
Goodwill relationships Software system Total
Consolidated A$'000 A$'000 A$'000 A$'000 A$'000
Opening net book amount at
1
July 2018 24,043 605 12,048 1,846 38,542
Additions - - 4,852 13 4,865
Exchange differences 10 - 2 2 14
Impairment of assets (2,832) - - - (2,832)
Amortisation expense - (461) (4,706) (942) (6,109)
Closing net book amount at
30
June 2019 21,221 144 12,196 919 34,480
Additions - - 1,621 12 1,633
Disposals - - (112) (3) (115)
Exchange differences (7) - - - (7)
Amortisation expense - (12) (5,312) (499) (5,823)
Closing net book amount at
30
June 2020 21,214 132 8,393 429 30,168
======== ============= ======== ====== =======
Amortisation expense is included in 'administration expenses' in profit
or loss.
Goodwill is allocated to the Group's cash-generating units ('CGUs') identified
according to business model as follows:
Consolidated
2020 2019
A$'000 A$'000
Online flash 19,458 19,683
Online retail 1,756 1,538
21,214 21,221
====== ======
The Group's retail websites are "OO.com", Deals Direct, and Top Buy. All
other websites owned by the Group are online flash websites.
The recoverable amounts of the CGUs were determined based on value-in-use.
Cash flow projections used in the value-in-use calculations were based on
financial budgets approved by management covering a five year period. Cash
flows beyond the five year period were extrapolated using the estimated
growth rates stated below.
Management determined budgeted gross margin based on expectations of market
developments. The growth rates used were conservative based on industry
forecasts. The discount rates used were pre-tax and reflected specific risks
relating to the CGUs.
Online flash
Key assumptions used for value-in-use calculations:
Consolidated
2020 2019
% %
Budgeted gross margin 29.5% 22.0%
Five year compound growth rate 3.0% (8.0%)
Long term growth rate 2.0% 2.0%
Pre-tax discount rate 9.0% 9.0%
Based on the assessment, no impairment charge is required. Management have
performed a number of sensitivity tests on the above rates and note that
there are no impairment indicators arising from this analysis. The recoverable
amount exceeded the carrying amount by A$79,700,000.Recoverable amount in
FY2019 is the remaining balance after impairment of A$2,832,000.
Online retail
Key assumptions used in value-in-use calculation
2020 2019
% %
Budgeted gross margin 28.3% 23.0%
Five year compound growth rate 0.8% (8.0%)
Long-term growth rate 2.0% 2.0%
Pre-tax discount rate 9.0% 9.0%
Based on the assessment, an impairment charge of A$nil (2019: A$2,832,000)
is required. The recoverable amount exceeded the carrying amount by A$3,010,000
(2019: A$2,832,000).
Sensitivity
As disclosed in note 3, the Directors have made judgements and estimates
in respect of impairment testing of goodwill. Should these judgements and
estimates not occur the resulting goodwill carrying amount may decrease.
Sensitivity analysis has been performed on the value-in-use calculations,
holding all other variables constant, to:
(i) apply a 1% increase in discount rate from 9% to 10%. No impairment would
occur in the Online Flash CGU. The recoverable amount exceeded the carrying
amount by A$68,529,000.
(ii) apply a 100 bps decrease in margin from 29.5% to 28.5%. No impairment
would occur in the Online Flash CGU. The recoverable amount exceeded the
carrying amount by A$60,678,000.
(iii) apply a 1% increase in discount rate from 9% to 10%. No impairment
would occur in the Online Retail CGU. The recoverable amount exceeded the
carrying amount by A$2,485,000.
(iv) apply a 100 bps decrease in margin from 28.3% to 27.3%. No impairment
would occur in the Online Retail CGU. The recoverable amount exceeded the
carrying amount by A$1,799,000.
Note 17. Non-current assets - Other non-current assets
Consolidated
2020 2019
A$'000 A$'000
Other deposits* 1,629 -
====== ======
*Deposit given for lease agreements
Note 18. Non-current assets - deferred tax
Consolidated
2020 2019
A$'000 A$'000
Deferred tax asset comprises temporary differences attributable
to:
Tax losses* 299 -
Accrued expenses 258 735
Provisions 2,553 2,105
Sundry (285) 424
Property, plant and equipment 242 148
Leases 380 -
Intangibles (40) (43)
-
Deferred tax asset 3,407 3,369
Movements:
Opening balance 3,369 14,112
Credited/(charged) to profit or loss (note 9) - (10,594)
Exchange loss 38 (149)
Closing balance 3,407 3,369
====== ========
*the breakdown of the prior year deferred tax asset has been amended to
reflect the appropriate breakdown of the deferred tax asset.
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. Deferred tax assets have not been recognised for trading losses
totaling A$103,548,000 (2019 - A$83,900,000), given the lack of visibility
over the level of future profitability of the Group.
Note 19. Current liabilities - trade and other payables
Consolidated
2020 2019
A$'000 A$'000
Trade payables 13,053 28,359
Other payables and accruals 3,163 4,609
Sales tax payable 2,769 -
18,985 32,968
====== ======
Refer to note 31 for further information on financial instruments.
Note 20. Current liabilities - contract liabilities
Consolidated
2020 2019
A$'000 A$'000
Contract liabilities 6,186 10,408
====== ======
Unsatisfied performance obligations
The aggregate amount of the transaction price allocated to the performance
obligations that are unsatisfied at the end of the reporting period was
A$6,186,000 as at 30 June 2020 (A$10,408,000 as at 30 June 2019) and is
expected to be recognised as revenue in future periods as follows:
Consolidated
2020 2019
A$'000 A$'000
Within 1 month 6,186 10,408
====== ======
Contract liabilities represent the Group's obligation to transfer goods
or services to a customer and are recognised when a customer pays consideration,
or when the Group recognises a receivable to reflect its unconditional right
to consideration (whichever is earlier) before the Group has transferred
the goods or services to the customer.
Note 21. Current liabilities - borrowings
Consolidated
2020 2019
A$'000 A$'000
Bank overdraft - 13,137
Bank loans - 5,200
Finance lease liability - 20
- 18,357
====== ======
Refer to note 31 for further information on financial instruments.
Assets pledged as security
The Group has no borrowing facilities as at 30 June 2020 (30 June 2019:
A$21,685,000 with Hong Kong and Shanghai Banking Corporation Plc 'HSBC').
The borrowing facilities were secured by a Corporate Guarantee and Indemnity.
There were no financial covenants in relation to these borrowing facilities.
The average interest rate incurred on these bank borrowings is nil (30 June
2019: 2.96%).
The movement in borrowings for the year were as follows: Finance
Bank overdraft Bank loans lease liability Total
Consolidated A$'000 A$'000 A$'000 A$'000
Balance at 1 July 2019 13,137 5,200 20 18,357
Additions 280 - - 280
Repayment (5,694) (5,200) (20) (10,914)
Debt forgiveness (refer
to note 5) (7,723) - - (7,723)
Balance at 30 June 2020 - - - -
============== ========== ================ ========
Financing arrangements
Unrestricted access was available at the reporting date to the following
lines of credit:
Consolidated
2020 2019
A$'000 A$'000
Total facilities
Bank overdraft - 13,413
Bank loans - 5,886
Bank guarantees - 1,541
Bank loans under interchangeable facilities - 845
- 21,685
------ ------
Used at the reporting date
Bank overdraft - 13,137
Bank loans - 5,200
Bank guarantees - 1,506
Bank loans under interchangeable facilities - 116
- 19,959
------ ------
Unused at the reporting date
Bank overdraft - 276
Bank loans - 686
Bank guarantees - 35
Bank loans under interchangeable facilities - 729
- 1,726
------ ------
Note 22. Current liabilities - lease liabilities
Consolidated
2020 2019
A$'000 A$'000
Lease liability 1,581 -
====== ======
Refer to note 31 for information on the maturity analysis of lease liabilities
.
Note 23. Current liabilities - provisions
Consolidated
2020 2019
A$'000 A$'000
Employee benefits provision 1,148 1,093
Lease make good provision 458 564
Gift voucher provision 309 444
Sales returns provision 513 2,314
2,428 4,415
====== ======
Employee benefits provision
The provision represents employee annual leave along with employee parental
leave.
Lease make good provision
The provision represents the present value of the estimated costs to make
good the premises leased by the Group at the end of the respective lease
terms.
Gift voucher provision
The provision represents the estimated costs to honour gift vouchers that
are in circulation and not expired.
Sales return provision
The provision represents the costs for goods expected to be returned by
customers.
Movements in provisions
Movements in each class of provision during the current financial year,
other than employee benefits, are set out below:
Lease make Sales
Employee good Gift vouchers returns
provision provision provision provision Total
Consolidated - 2020 A$'000 A$'000 A$'000 A$'000 A$'000
Carrying amount at the start of
the year 1,093 564 444 2,314 4,415
Additional provisions recognised 452 - 309 513 1,274
Reversal of recall provision - - - (1,717) (1,717)
Amounts used (397) (106) (444) (597) (1,544)
Carrying amount at the end of the
year 1,148 458 309 513 2,428
========= ========== ============= ========== =======
Note 24. Non-current liabilities - lease liabilities
Consolidated
2020 2019
A$'000 A$'000
Lease liability 5,048 -
====== ======
Refer to note 31 for information on the maturity analysis of lease liabilities.
Note 25. Non-current liabilities - provisions
Consolidated
2020 2019
A$'000 A$'000
Employee benefits provision 450 231
====== ======
Note 26. Equity - share capital
Consolidated
2020 2019 2020 2019
Shares Shares A$'000 A$'000
Ordinary shares GBPnil each - fully
paid 817,240,853 154,331,652 - -
Less: Treasury shares (25,533,118) (3,000,000) - -
791,707,735 151,331,652 - -
============ =========== ====== ======
Authorised share capital
874,178,509 (2019: 200,000,000) ordinary shares of GBPnil each.
Movements in ordinary share capital - fully paid
Details Date Shares A$'000
Balance 1 July 2018 154,331,652 -
Balance 30 June 2019 154,331,652 -
Issue of shares 20 September 2019 640,376,083 -
Issue of shares 11 December 2019 22,533,118 -
Balance 30 June 2020 817,240,853 -
=========== ======
Movements in treasury shares
Details Date Shares A$'000
Balance 1 July 2018 3,000,000 -
Balance 30 June 2019 3,000,000 -
Issue of shares under the management
incentive
scheme 5 December 2019 22,533,118 -
Balance 30 June 2020 25,533,118 -
========== ======
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds
on the winding up of the company in proportion to the number of and amounts
paid on the shares held.
Treasury shares
The company has two employee share plans; (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 either 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 or
certain share price hurdles. Share options and loan shares have been granted
over the ordinary share capital of the company and are accounted for as
share-based payments. That is, the fair value of the accounting expense
in relation to these options and loan shares are recognised over the vesting
period.
Vested and unvested shares under the plans are recorded as treasury shares
representing a deduction against issued capital. When the loans are settled
or the options are exercised, the treasury shares are reclassified as ordinary
shares and the equity will increase accordingly. Treasury shares have no
dividend, or voting, rights.
Note 27. Equity - share premium account
Consolidated
2020 2019
A$'000 A$'000
Share premium account 328,971 306,363
======= =======
The share premium account is used to recognise the difference between the
issued share capital at nominal value and the capital received.
In September 2019, the Company finalised a share placement for A$23,329,000.
Net proceeds after considering the share issue costs of A$721,000 was A$22,608,000.
The total number of new shares issued under the placement was 640,376,083
bringing the total shares on issue to 794,707,735.
In December 2019, the Company issued 22,533,118 ordinary shares, 4,542,614
to MySale Group Trustee Limited, in its capacity as the trustee of the MySale
Group Plc Employee Benefit Trust ('EBT'), and 17,990,504 directly to those
Directors and management taking part in the Loan Share Plan as part of the
Company's management incentive scheme for its Directors, Non-executive Directors,
and senior management. These shares, in addition to the existing 3,000,000
ordinary shares already held in the EBT, will be used to satisfy the Share
Awards, subject to the performance criteria being met. Following admission
of these shares, the Company's total issued share capital was 817,240,853
Ordinary Shares. The total number of voting rights in the Company is 791,707,735
(25,533,118 with no voting rights)
Note 28. Equity - other reserves
Consolidated
2020 2019
A$'000 A$'000
Foreign currency reserve 2,265 4,390
Share-based payments reserve 5,512 5,241
Capital reorganisation reserve (132,756) (132,756)
(124,979) (123,125)
========= =========
Foreign currency reserve
The reserve is used to recognise exchange differences arising from translation
of the financial statements of foreign operations to Australian dollars.
Hedging reserve - cash flow hedges
The reserve is used to recognise the effective portion of the gain or loss
of cash flow hedge instruments that is determined to be an effective hedge.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to
employees and Directors as part of their remuneration, and other parties
as part of their compensation for services.
Capital reorganisation reserve
The reserve is used to recognise the difference between the purchase price
of APAC Sale Group Pte. Ltd. and the net assets acquired following a Group
reorganisation in 2014.
Movements in reserves
Movements in each class of reserve during the current and previous financial
year are set out below:
Foreign Share-based Capital
currency Hedging payments reorganisation Total
Consolidated A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1 July
2018 3,458 38 6,277 (132,756) (122,983)
Loss after income
tax expense
for the year - - - - -
Other comprehensive
income for
the year, net of
tax 932 (38) - - 894
Total comprehensive
(loss)/income
for the year 932 (38) - - 894
Transactions with
owners in
their capacity as
owners:
Share-based
payments (note 39) - - (1,036) - (1,036)
Balance at 30 June
2019 4,390 - 5,241 (132,756) (123,125)
======== ======= =========== ============== =========
Foreign Share-based Capital
currency Hedging payments reorganisation Total
Consolidated A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1 July
2019 4,390 - 5,241 (132,756) (123,125)
Loss after income
tax benefit
for the year - - - - -
Other comprehensive
loss for
the year, net of
tax (2,125) - - - (2,125)
Total comprehensive
(loss)/income
for the year (2,125) - - - (2,125)
Transactions with
owners in
their capacity as
owners:
Share-based
payments (note 39) - - 271 - 271
Balance at 30 June
2020 2,265 - 5,512 (132,756) (124,979)
======== ======= =========== ============== =========
Note 29. Equity - non-controlling interests
Consolidated
2020 2019
A$'000 A$'000
Accumulated losses (20) (20)
====== ======
The non-controlling interest has 49% equity holding in Simply Send It Pty
Limited.
Refer to note 37 for details.
Note 30. Equity - dividends
There were no dividends paid, recommended or declared during the current
or previous financial year.
Note 31. Financial instruments
Financial risk management objectives
The Group's activities expose it to market risk (including foreign currency
risk and interest rate risk), credit risk and liquidity risk. The Group's
overall risk management strategy seeks to minimise any adverse effects from
the unpredictability of financial markets on the Group's financial performance.
The Group uses financial instruments such as currency forwards to hedge
certain financial risk exposures.
The Board of Directors (the 'Board') is responsible for setting the objectives
and underlying principles of financial risk management for the Group.
Financial risk management is carried out by the executive directors and
the executive management team in accordance with the policies set by the
Board. They identify, evaluate and hedge financial risks in close co-operation
with the Group's operating units. Regular reports are circulated and reviewed
by executive directors.
Market risk
Foreign currency risk
The Company is incorporated in Jersey and the Group operates from Australia
with operations in New Zealand, USA, Asia (including Malaysia, Thailand
and Singapore) and UK. Entities in the Group regularly transact in currencies
other than their respective functional currencies ('foreign currencies').
The Group purchases products in these countries and other European Union
countries. Refer to note 5 for the foreign exchange gain / loss recognised
in the year.
Currency risk arises within entities in the Group when transactions are
denominated in foreign currencies. To manage the currency risk, the executive
management team manages the overall currency exposure mainly by entering
into currency forwards with banks.
The carrying amount of the Group's foreign currency denominated financial
assets and financial liabilities at the reporting date were as follows:
Assets Liabilities
2020 2019 2020 2019
Consolidated A$'000 A$'000 A$'000 A$'000
US dollars 121 929 49 1,443
Euros - 5,339 - -
Pound sterling 996 345 1,261 10,443
New Zealand dollars 3,479 167 330 33
Singapore dollars 1,331 168 132 -
Malaysian ringgit 174 39 89 43
Swiss Franc - 227 - -
Russian Ruble 47 26 37 69
6,148 7,240 1,898 12,031
====== ====== ====== ======
The Group had net assets denominated in foreign currencies of A$4,250,000
as at 30 June 2020 (2019: net liabilities of A$4,791,000). Based on this
exposure, had the Australian dollar weakened by 10% / strengthened by 10%
(2019: weakened by 10% / strengthened by 10%) against these foreign currencies
with all other variables held constant, the Group's foreign exchange loss
before tax for the year would have been A$425,000 lower / higher (2019:
A$479,100 lower / higher). The percentage change is the expected overall
volatility of the significant currencies, which is based on management's
assessment of reasonable possible fluctuations taking into consideration
movements over the last 6 months each year and the spot rate at each reporting
date. The actual foreign exchange loss for the year ended 30 June 2020 was
A$893,000 (2019: A$692,000).
Capital risk management
The Group's objectives when managing capital is to safeguard the Group's
ability to continue as a going concern, so that it can continue to provide
returns for shareholders and benefits for other stakeholders and to maintain
an optimal capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the balance sheet,
plus net debt which totals A$21,250,000 (2019 - A$21,631,000). Net debt
is calculated as total debt (including borrowings and lease liabilities)
less cash and cash equivalents. Refer to note 32.
In order to maintain or adjust the capital structure, the Group may adjust
the amount of dividends paid to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debt.
The capital risk management policy remains unchanged from the 30 June 2019
Annual Report.
Price risk
The Group is not exposed to any significant price risk.
Cash flow and fair value interest rate risk
Cash flow interest rate risk is the risk that the future cash flows of a
financial instrument will fluctuate because of changes in market interest
rates. Fair value interest rate risk is the risk that the fair value of
a financial instrument will fluctuate due to changes in market interest
rates.
The Group is not exposed to any significant cash flow interest rate risks
arising mainly from interest bearing deposits.
Credit risk
Credit risk refers to the risk that counterparty will default on its contractual
obligations resulting in financial loss to the Group. The major classes
of financial assets of the Group are bank deposits and cash held by merchant
provider. For bank deposits and merchant, the Group adopts the policy of
dealing only with high credit quality financial institutions and major banks.
The principal business of the Group is online cash sales.
The Group has adopted a lifetime expected loss allowance in estimating expected
credit losses to trade receivables through the use of a provisions matrix
using fixed rates of credit loss provisioning. These provisions are considered
representative across all customers of the Group based on recent sales experience,
historical collection rates and forward-looking information that is available.
Generally, trade receivables are written off when there is no reasonable
expectation of recovery. Indicators of this include the failure of a debtor
to engage in a repayment plan, no active enforcement activity and a failure
to make contractual payments for a period greater than 1 year. See note
11 for details of the provisions made against trade receivables.
Concentration of credit risk
There are no significant concentrations of credit risk within the Group.
The credit risk on liquid funds is limited as the counterparties are banks
with high credit ratings.
Credit risk is managed by limiting the amount of credit exposure to any
single counter-party for cash deposits.
Liquidity risk
The Group manages liquidity risk by maintaining adequate cash reserves and
available borrowing facilities by continuously monitoring actual and forecast
cash flows and matching the maturity profiles of financial assets and liabilities.
Unused borrowing facilities at the reporting date:
Consolidated
2020 2019
A$'000 A$'000
Bank overdraft - 276
Bank loans - 686
Bank guarantees - 35
Bank loans under interchangeable facilities - 729
- 1,726
------ ------
Remaining contractual maturities
Trade payables and other financial liabilities mainly arise from the financing
of assets used in the Group's ongoing operations such as plant and equipment
and investments in working capital. These assets are considered in the Group's
overall liquidity risk.
The following tables detail the Group's remaining contractual maturity for
its financial instrument liabilities. The tables have been drawn up based
on the undiscounted cash flows of financial liabilities based on the earliest
date on which the financial liabilities are required to be paid. The tables
include both interest and principal cash flows disclosed as remaining contractual
maturities and therefore these totals may differ from their carrying amount
in the balance sheet.
Carrying
amount
as
Weighted included
average Total on the
interest <1 1-3 3-12 1-5 undiscounted Balance
rate month months months years liability Sheet
Consolidated - A$'000
2020 % A$'000 A$'000 A$'000 A$'000 A$'000
Non-derivatives
Non-interest
bearing
Trade and other
payables - 12,877 5,733 510 (135) 18,985 18,985
Interest-bearing
- variable
Lease liability 5.00% 158 475 1,250 5,673 7,556 6,629
------ ------ ------ ------- ------------ ---------
Total
non-derivatives 13,035 6,208 1,760 5,538 26,541 25,614
------ ------ ------ ------- ------------ ---------
Carrying
amount
as
Weighted included
average Total on the
interest <1 1-3 3-12 1-5 undiscounted Balance
rate month months months years liability Sheet
Consolidated - A$'000
2019 % A$'000 A$'000 A$'000 A$'000 A$'000
Non-derivatives
Non-interest
bearing
Trade and other
payables - 18,243 11,878 2,521 326 32,968 32,968
Interest-bearing
- variable
Bank overdraft 2.75% 13,137 - - - 13,137 13,137
Bank loans 2.92% 5,200 - - - 5,200 5,200
Lease liability 6.48% 20 - - - 20 20
------ ------ ------ ------- ------------ ---------
Total
non-derivatives 36,600 11,878 2,521 326 51,325 51,325
------ ------ ------ ------- ------------ ---------
The cash flows in the maturity analysis above are not expected to occur
significantly earlier than contractually disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect
their fair value. The carrying amounts of trade receivables and trade payables
are assumed to approximate their fair values due to their short-term nature.
The fair value of financial liabilities is estimated by discounting the
remaining contractual maturities at the current market interest rate that
is available for similar financial instruments. Also, there is no material
difference between the fair value of cash and cash equivalents and the carrying
amounts.
Note 32. Changes in liabilities arising from financing activities
Bank Lease
loans liability Total Debt
Consolidated A$'000 A$'000 A$'000
Balance at 1 July 2018 5,200 144 5,344
Net cash used in financing activities - (124) (124)
Balance at 30 June 2019 5,200 20 5,220
Lease liability opening balance at 1/07/19 on
adoption of IFRS 16 1,724 1,724
Net cash used in financing activities (5,200) (1,163) (6,363)
Other changes - cash incentive 1,026 1,026
Interest and finance charges paid / payable on
lease liabilities (note 7) 241 241
Acquisition of buildings and equipment -
right-of-use - 4,781 4,781
Balance at 30 June 2020 - 6,629 6,629
======= ========= ==========
2020 2019
Net debt A$'000 A$'000
Cash and cash equivalents 6,660 814
Borrowings (including overdraft) - (18,357)
Lease liabilities (6,629) -
Net debt 31 (17,543)
======= ========
Note 33. Key management personnel disclosures
Compensation
The aggregate compensation made to Directors and other members of key management
personnel of the Group is set out below:
Consolidated
2020 2019
A$'000 A$'000
Short-term employee benefits 2,108 2,056
Post-employment benefits 194 110
2,302 2,166
====== ======
Key management includes Directors (executives and non-executives) and key
heads of departments.
During the financial year ended 30 June 2020 A$6,322,777 (2019: A$nil) performance
rights were granted to members of key management personnel under share-based
payments plans operated by the Group as disclosed in note 39.
Note 34. Remuneration of auditors
Services provided by the company's auditors and network firms
During the year the company (including its overseas subsidiaries) obtained
the following services from the company's auditors at costs as detailed
below:
Consolidated
2020 2019
A$'000 A$'000
Fees payable to the company's auditor and its associates
for the audit of the consolidated financial statements 201 258
Fees payable to the company's auditor and its associates
for other services:
- the audit of the company's subsidiaries 49 102
- taxation services 39 142
- other non-audit services 29 44
318 546
====== ======
Note 35. Contingent liabilities
The Group issued bank guarantees through its banker, Hong Kong and Shanghai
Bank Corporation and Macquarie Bank, in respect of lease obligations amounting
to A$777,000 (2019: A$1,503,000).
The Group has issued a bank guarantee through its banker ANZ Bank New Zealand
Limited, in respect of customs and duties obligations amounting to NZ$NIL
(2019: NZ$150,000).
Note 36. Related party transactions
Parent entity
MySale Group Plc is both the parent company of the Group and also the ultimate
parent entity of the group
Subsidiaries
Interests in subsidiaries are set out in note 37.
The Group has utilised exemptions available to it to not report transactions
with its 100% or majority owned subsidiaries that are listed in note 37.
Key management personnel
Disclosures relating to key management personnel are set out in note 33.
Transactions with related parties
The following transactions occurred with related parties:
Consolidated
2020 2019
A$'000 A$'000
Sale of goods and services:
Sale of goods to other related party (Sports Direct) * - 381
Payment for goods and services:
Purchase of goods from other related party (Sports Direct)
* - 6,483
* Sports Direct.Com Retail Ltd is owned by a majority shareholder of MySale
Group Plc.
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation
to transactions with related parties:
Consolidated
2020 2019
A$'000 A$'000
Current payables:
Trade payables to other related party - 488
Loans to/from related parties
There were no loans to or from related parties at the current and previous
reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and
at market rates.
Ultimate Controlling party
The directors consider that the Group has no ultimate controlling party.
Note 37. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities
and results of the following subsidiaries in accordance with the accounting
policy described in note 2:
Non-controlling
Parent interest
Principal place
of business Ownership Ownership Ownership Ownership
/ interest interest interest interest
Country of 2020 2019 2020 2019
Principal
Name incorporation activities % % % %
3 Fusionopolis
APAC Sale Link #02-08
Group Nexus@one-north, Trading
Pte. Ltd. Singapore company 100% 100% - -
Impruneta
(Florence),
APAC Sale via Di Colle
Italy Ramole 11, 50023,
s.r.l Bottai, Italy Deregistered 100% 100% - -
1107 S Boyle
APAC Sales Street, Los
Group, Angeles, CA Trading
Inc. 90023, U.S.A company 100% 100% - -
The Old Mill,
9 Soar Lane,
APAC UK Leicester,
Procurement England, Trading
Co Limited LE3 5DE. company 100% 100% - -
The Old Mill,
9 Soar Lane,
Leicester,
APACSale England, Trading
Limited LE3 5DE. company 100% 100% - -
3/120 Old
Pittwater
BuyInvite Pty Road, Brookvale, Trading
Limited 2100, Australia company 100% 100% - -
Company
07640503
Limited
(formerly The Old Mill,
called 9 Soar Lane,
Cocosa Leicester,
Lifestyle England,
Limited) LE3 5DE. Dormant 100% 100% - -
25 Barrys Point
Road, Takapuna
NZ Sale Auckland 0632, Trading
Limited NZ company 100% 100% - -
Non-controlling
Parent interest
Principal place
of business Ownership Ownership Ownership Ownership
/ interest interest interest interest
Country of 2020 2019 2020 2019
Principal
Name incorporation activities % % % %
3/120 Old
Pittwater
Ozsale Pty Road, Brookvale, Trading
Limited 2100, Australia company 100% 100% - -
29-3, Block
F2, Jalan
PJU1/42A,
Dataran Prima,
47301 Petaling
Ozsale Sdn. Jaya, Selangor, Trading
Bhd. Malaysia company 100% 100% - -
Private
Sale
Asia 3 Anson Road,
Pacific #27-01 Springleaf
Pte Ltd Tower, Singapore Dormant 100% 100% - -
Simply Sent 3/120 Old
It Pty Pittwater
Limited Road, Brookvale,
* 2100, Australia Dormant 51% 51% 49% 49%
3 Fusionopolis
Singsale Link #02-08
Pte. Nexus@one-north, Trading
Ltd. Singapore company 100% 100% - -
Brand 3/120 Old
Search Pittwater
Pty Road, Brookvale,
Limited 2100, Australia Dormant 100% 100% - -
The Old Mill,
9 Soar Lane,
Leicester,
Chic Global England,
Limited LE3 5DE. Dormant 100% 100% - -
BuyInvite 3/120 Old
NZ Pittwater
Pty Road, Brookvale,
Limited 2100, Australia Dormant 100% 100% - -
Click
Frenzy 3/120 Old
Australia Pittwater
Pty Road, Brookvale,
Ltd 2100, Australia Dormant 100% 100% - -
25 Barrys Point
Road, Takapuna
NZ Wine Auckland 0632,
Limited NZ Dormant 100% 100% - -
The Old Mill,
9 Soar Lane,
Leicester,
My Trade England,
Ltd LE3 5DE. Dormant 100% 100% - -
Hong Kong
3/120 Old
MySale Pittwater
Group Road, Brookvale,
Limited 2100, Australia Dormant 100% 100% - -
Branch of Russia
Click 3/120 Old
Frenzy Pittwater
Australia Road, Brookvale, Trading
Pty Ltd 2100, Australia company 100% 100% - -
* This subsidiary has been consolidated as the Group has control over the
partly owned.
Summarised financial information for subsidiaries that have non-controlling
interests has not been provided as they are not material to the Group.
Note 38. (Loss)/earnings per share
Consolidated
2020 2019
A$'000 A$'000
Loss after income tax attributable to the owners of MySale
Group Plc (3,560) (69,330)
======= ========
Number Number
Weighted average number of ordinary shares used in
calculating
basic earnings per share 665,483,037 154,331,652
Weighted average number of ordinary shares used in
calculating
diluted earnings per share 665,483,037 154,331,652
=========== ===========
Cents Cents
Basic earnings per share (0.53) (44.92)
Diluted earnings per share (0.53) (44.92)
Underlying EBITDA basic per share (0.41) (12.21)
65,985,501 (2019: 2,580,543) employee long term incentives have been excluded
from the 2020 diluted earnings calculation as they are anti-dilutive for
the year.
Note 39. Share-based payments
The company has two employee share plans; (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.
Set out below are summaries of share and options granted under the plans
for Directors and employees:
2020
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
18/08/2020
18/08/2015 ** GBP0.51 1,040,198 - - (98,237) 941,961
18/08/2020
18/08/2015 * GBP0.51 162,207 - - - 162,207
19/08/2021
19/08/2016 ** GBP0.65 1,019,445 - - (169,907) 849,538
19/08/2021
19/08/2016 * GBP0.65 358,693 - - - 358,693
05/12/2024
05/12/2019 ** GBP0.05 - 7,077,638 - - 7,077,638
05/12/2024
05/12/2019 ** GBP0.10 - 7,077,638 - - 7,077,638
05/12/2024
05/12/2019 * GBP0.05 - 9,460,227 - - 9,460,227
05/12/2024
05/12/2019 * GBP0.10 - 9,460,227 - - 9,460,227
21/04/2025
21/04/2020 ** GBP0.05 - 15,298,686 - - 15,298,686
21/04/2025
21/04/2020 ** GBP0.10 - 15,298,686 - - 15,298,686
2,580,543 63,673,102 - (268,144) 65,985,501
--------- ---------- --------- ---------- ----------
* EIP - Options
** LSP
2019
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 1,697,815 - - (657,617) 1,040,198
18/08/2020
18/08/2015 * GBP0.51 290,533 - - (128,326) 162,207
27/07/2020
27/07/2015 ** GBP0.53 3,000,000 - - (3,000,000) -
19/08/2021
19/08/2016 ** GBP0.65 1,868,982 - - (849,537) 1,019,445
19/08/2021
19/08/2016 * GBP0.65 358,693 - - - 358,693
19/08/2022
19/08/2017 ** GBP1.15 449,314 - - (449,314) -
19/08/2022
19/08/2017 ** GBP1.15 271,014 - - (271,014) -
8,047,850 - - (5,467,307) 2,580,543
--------- ------- --------- ----------- ---------
* EIP - Options
** LSP
The weighted average remaining contractual life of the share plan outstanding
at the end of the financial year was 4 years (2019: 2 years).
The share-based payment expense for the year was an expense of A$271,000
(2019: a benefit of A$1,036,000). There was a benefit in the prior year
mainly due to vesting conditions for the FY 18 grant not being met so all
the related options were forfeited. The benefit was also a result of the
leavers in the restructure and the resignation of the previous Chairman
resulting in their respective options being forfeited.
For the options granted during the current financial year, the valuation
model inputs used to determine the fair value at the grant date, are as
follows:
Share Fair
price Exercise Expected Dividend Risk-free value
at grant interest at grant
Grant date Expiry date date price volatility yield rate date
05/12/2019 05/12/2024 GBP0.03 GBP0.05 75.0% - 0.5% GBP0.020
05/12/2019 05/12/2024 GBP0.03 GBP0.10 75.0% - 0.5% GBP0.017
05/12/2019 05/12/2024 GBP0.03 GBP0.05 75.0% - 0.5% GBP0.020
05/12/2019 05/12/2024 GBP0.03 GBP0.10 75.0% - 0.5% GBP0.017
21/04/2020 21/04/2025 GBP0.02 GBP0.05 75.0% - 0.5% GBP0.023
21/04/2020 21/04/2025 GBP0.02 GBP0.10 75.0% - 0.5% GBP0.019
Note 40. Events after the reporting period
The existence of the infectious disease COVID-19 ('Coronavirus')since around
the beginning of the calendar year 2020, has become widely known, and subsequent
to the reporting date, continued to rapidly spread throughout the world,
including Australia. The Directors have considered the impact of this on
the ability of the Group to continue as a going concern, as set out in note
2.
The Group has raised approximately GBP5,100,000 (approximately A$9,300,000)
on 15 Oct 2020, before expenses, through a subscription for 85,225,129 new
ordinary shares ("Subscription Shares") in the Company at a subscription
price of 6.0 pence per ordinary share (the "Subscription Price") by entities
associated with Gabby Leibovich, Hezi Leibovich and Nati Harpaz (together,
the "Subscription").
No other matter or circumstance has arisen since 30 June 2020 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.
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END
FR EAAFSAASEFAA
(END) Dow Jones Newswires
November 26, 2020 02:00 ET (07:00 GMT)
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