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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 : 7949G
MySale Group PLC
31 March 2022
MySale Group plc
("MySale" or "the Group")
Half Year Results
Strong GMV growth underpinned by the marketplace channel
MySale Group plc (AIM: MYSL), the leading international online retailer, today announces its unaudited interim results for the six months to 31 December 2021 (H1 FY22).
Kalman Polak, Chief Executive Officer of MySale, commented.
"We have made good operational progress in the last six months as the new management team continues to scale our marketplace platform, delivering GMV growth of 36%, despite reported revenue declining by 6% as a result of the change in channel mix.
"We remain confident in the long term opportunity for the business in Australia and New Zealand, where we have a significant addressable market which we can access by expanding our unique off-price proposition. At the same time, we are being disciplined in the execution of the growth strategy and have implemented several initiatives to support working capital, through careful cost control and by reducing the amount of our own-stock inventory in an orderly manner."
Financial Overview
-- Gross Merchandise Value (GMV) increased 36% to A$86.7m (H1 FY21: A$63.8m) reflecting the progress in scaling the Group's off-price marketplace platform
-- Group Revenue decreased by 6% t o A$59.7m (H1 FY21: A$63.8m) -- Continued improvement in gross margin to 42.3% (H1 FY21: 37.9%) -- Gross Profit of A$25.3m (H1 FY21: A$24.2m) -- Group cost base(1) increased by 13% to A$24.3m (H1 FY21: A$21.4m) -- Fixed costs as a percentage of GMV reduced to 9.4% (H1 FY21: 9.7%)
-- Total costs as a percentage of GMV reduced to 28.0% (H1 FY21: 33.6%). Further costs reductions forecast in H2 FY22
-- Inventory balances A$6.1m (H1 FY21: A$2.6m), expected to reduce during H2 FY22 -- Net cash balance of A$3.8m (H1 FY21: A$15.8m). -- Underlying EBITDA(2) of A$1.0m (H1 FY21: A$2.7m) -- Loss before taxation of A$4.5 m (H1 FY21 A$1.0m)
Operational Overview
-- Continued improvement in scaling the marketplace channel which represents 35% of GMV (H1 FY21: Nil)
-- Own stock (1P) revenue was A$23.9m representing 27.5% of total GMV -- Opened Melbourne office to support the growth of Marketplace -- Active suppliers increased to 1,097 (H1 FY21: 1,032) -- Active customers increased by 14% to 618,000 (H1 FY21: 540,000)
Issue of Convertible Loan Notes
-- Today, the Group announced that it has raised A$2.3m in cash through the issue and subscription of convertible loan notes ("Loan Notes") to existing shareholders, including Carl Jackson (Executive Chair) and Kalman Polak (Chief Executive Officer)
-- The Loan Notes have a maturity date of 30 April 2025 and are convertible into ordinary shares of the Company at a conversion price of 1.5 pence (or A$0.02625, with exchange rate fixed at GBP:AUD rate of 1.75) per ordinary share
-- The net proceeds of the Loan Note issue will be used to fund the continued development of the Group's marketplace technology platform and general working capital
[1] Group cost base is the different between gross profit and underlying EBITDA
2 Underlying EBITDA is calculated as EBITDA adjusted for certain items including impairment losses/reversals related to goodwill and receivables, share-based payments, reorganisation costs, debt forgiveness, one-off cost and unrealised foreign exchange loss/gain. Refer to note 5 for reconciliation to reported loss.
Current Trading and Outlook
Revenues have remained subdued in Q3 due to the prevalence of the Omicron variant in Australia and the knock-on effect to consumer demand. In the ten weeks of trading in H2 FY22, GMV was marginally ahead of prior year, whilst total revenue has continued to be lower as a result of the changing channel mix
In light of these trading conditions, the Group's inventory balances remain higher than anticipated and the subdued consumer demand continues to place pressure on the cash resources of the Group.
In response, the Group has implemented several initiatives to support its working capital and is seeking to be disciplined in the execution of its growth strategy and continue to right size its cost base whilst reducing the amount of own-stock inventory in an orderly manner. The Group has also raised A$2.3m in cash through the issue of Loan Notes, with a view to supporting the Group's balance sheet, to fund ongoing investment in the Group's marketplace platform and for general working capital.
The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR") as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain. The person responsible for this announcement is Carl Jackson, Executive Chairman.
Enquiries :
MySale Group plc Carl Jackson, Executive Chairman +61 (0) 414 817 843 Kalman Polak, Chief Executive Officer +61 (0) 410 331 611 Singer Capital Markets (Nominated Adviser and Broker) +44 (0) 20 7496 3000 Mark Taylor Justin McKeegan MHP Communications (Financial PR Adviser) +44 (0) 20 3128 8570 Simon Hockridge Mysale@mhpc.com Pete Lambie
About MySale
MYSALE is an online off-price, retail platform offering a large, curated selection of branded fashion, beauty and homewares products through three core websites and associated mobile applications, including OZSALE.com.au, NZSALE.co.nz and SINGSALE.com.sg.
MYSALE provides a discovery based online shopping experience for its customers. New sales events are offered daily with a curated selection of branded products at discounted prices, typically in limited quantities and for limited time periods, to seek to create excitement for customers. MYSALE's suppliers are offered a suite of inventory solutions to fulfil their demand for inventory management and increase customer awareness of their brands and products.
Executive Chairman's statement
MySale is making operational progress in its strategy, acknowledging current macro and consumer headwinds, following the repositioning of the Group as an Off-Price Curated Retail Platform focused firmly on the ANZ market with a clear and differentiated proposition to suppliers and customers and execution of the ANZ First strategy.
The Group operates across three categories, Fashion, Beauty and Home offering our suppliers direct to customer solutions to complement existing channels. For our customers, our ambition is to be a trusted and exciting daily discovery-based shopping destination for Off-Price Brand Fashion, Beauty and Homewares.
Marketplace
Marketplace GMV grew to A$30.6m (H1 FY21: Nil), which represented 35.3% of Total GMV. We have recruited a high performing team and opened a Melbourne office. During the period we had 362 active marketplace sellers (H1 FY21: 62) with continued positive momentum expected for the rest of the financial year.
Own Stock
In parallel, we continue to scale our higher margin own stock channel which delivered total revenue of A$23.9m (H1 FY20: A$9.5m), representing 27.5% of Total Revenue and it is expected that to remain at 27% by the end of FY22. During the period management took the decision to invest in additional own-buy inventory. However, the subdued demand and delays in stock deliveries prior to Christmas meant that inventory build up to a higher level than expected. As such, the inventory balance at 31 December 2021 was A$6.1m (H1 FY21: A$2.6m). Post period end, management actions have reduced inventory levels to A$5.5m.
Order After Sale
An established channel that provides a low-risk solution to access a supplier's excess inventory. Total revenue declined to A$32.2m (H1 FY21: A$54.3m) representing 37% of total GMV.
We continue to focus on better quality revenue, which has meant being much stricter on which third-party sellers can trade on the platform resulting in a 443-basis point improvement in gross margin to 42.3% (H1 FY21: 37.9%).
COVID lockdowns in Q1 accelerated new customer acquisition and repeat purchases with the transition out of lockdown delivering a lower growth albeit from a higher base. During the period the cost of acquisition(3) was $28.31 41.8% below last year (H1 FY21: $48.66) which has continued into H2. This coincides with improvements in ROI in paid marketing with margin ROAS(4) being maintained at 1.39 throughout H1 (H1 FY21:1.0) There was an increase in the number of orders and average order value as customers spent across MySale's websites however average order frequency decreased by 15.6% primarily because of the increase in the growth of the marketplace channel.
The fixed cost base was A$8.1m (H1 FY21: A$6.2m) which represented 9.4% of GMV during the period (H1 FY21: 9.7%).
Variable costs decreased to 18.7% of GMV (H1 FY21: 23.9%). Whilst work to right size the Group's cost base continues, this did mitigate the changing channel mix which resulted in a gross profit of A$25.3m (H1 FY21: A$24.2m) and a reduction in Underlying EBITDA to A$1m (H1 FY21: A$2.5m).
During the period, MySale withdrew its proposed listing on the ASX and incurred several additional one-off costs as detailed in note 5 below.
As at 31 December 2022, the Group had a net cash balance of A$3.8m (H1 FY21: A$15.8m). The Group is utilising an invoice financing facility with a third party as part of its mitigating actions to support working capital.
As at 14 March 2022, the Group was operating on a bank debt-free basis, albeit with the inventory financing facility in place with balance of $0.9m. At the same time, the Group's gross and net cash balances were A$1.5m and A$0.6m (after A$0.9m of invoice financing)
ANZ First Strategy
We continue to progress our ANZ First Strategy. During the period 72% of GMV was from our marketplace and Order After Sale channel where we seek to take limited inventory risk and have a negative working capital profile. During the period, we had 1,097 active third-party partners.
Issue of Convertible Loan Notes
Today, the Company announced it has raised A$2.3m in cash through the issue and subscription of convertible loan notes ("Loan Notes") to existing shareholders and new holders, including Carl Jackson (Executive Chair) and Kalman Polak (Chief Executive Officer).
The Loan Notes have a maturity date of 30 April 2025 and are convertible into ordinary shares of the Company at a conversion price of 1.5 pence per ordinary share, at the election of the Loan Note holders, at any time prior to maturity. The Loan Notes may be redeemed by the Group at any time prior to maturity, without penalty. Interest will be payable at a rate of 7% per annum, paid-in-kind in ordinary shares in the Group. The Group has undertaken to exercise reasonable endeavours to procure that appropriate security is granted by OzSale Pty Ltd (or any other members of the Group), over the appropriate assets of the Group in favour of Loan Note holders, as soon as reasonably practicable following the issue of the Loan Notes.
As highlighted in these results and the Group's trading update dated 15 February 2022, the Group has been operating in a difficult trading environment, which has impacted the cash balance of the Group. To ensure that the Group is able to continue to operate as a going concern and advance its ANZ First Strategy, the net proceeds of the Loan Note issue will be used to fund the continued development of the Group's marketplace technology platform and general working capital.
Current Trading and Outlook
Revenues have remained subdued in Q3 due to the prevalence of the Omicron variant in Australia and the knock-on effect to consumer demand levels. In the ten weeks of trading in H2 FY22, GMV was marginally ahead of prior year whilst total revenue continued to be lower as a result of the changing channel mix
In response, the Group is being disciplined and cautious in the execution of its growth strategy and continues to seek to right size its cost base, increasing revenue from its higher margin Order After Sales channel and reducing the amount of own-stock inventory in an orderly manner, by increasing the promotional mark-down activity on the website and reducing the forward stock commitments. As at 14 March 2022, inventory balances have reduced to A$5.5m (H1 FY22: A$6.1m) and are expected to further reduce to A$4.5m by the year end. At the same time, the Group's gross and net cash balances were A$1.5m and A$0.6m (after A$0.9m of invoice financing) (H1 FY22: A$3.8m). In addition to this invoice facility, the Group has obtained further cash resource, having raised A$2.3m in cash through the issue of Loan Notes, with a view to supporting the Group's balance sheet, to fund ongoing investment in the Group's marketplace platform and for general working capital.
The long-term opportunity in the Fashion, Beauty and Home categories are forecast to be of A$13bn* by 2024. Notwithstanding current trading conditions, the Board remains confident about the Group's attractive positioning as an off-price specialist, with a clear proposition built around STARLING, its proprietary technology platform. The ambition remains to be the largest curated off-price marketplace for branded fashion, beauty and home in ANZ taking advantage of the continued strengthening ANZ off-price channel.
MySale has a small IT contract development team based in Saint Petersberg, Russia. The immediate risk is the sanctions on the banks and the ability to action payments. The Group has a business continuity plan in place that will be activated as needed. The Board does not expect this to have a material impact on Group revenue, earnings and cashflow.
The Board remains committed to aligning the Group's ownership structure with its operations in Australia.
Carl Jackson
Executive Chairman
31 March 2022
3 Customer Acquisition Costs (CAC) represents the cost of acquiring new customers calculated as the total marketing spend over total new customers during the relevant period
4 Margin ROAS definition " Margin Return on Advertising Spend (MROAS) measures the return over a 3-day period (calculated as total order value and delivery charges less cost of goods sold and delivery costs) generated from sales where the last marketing channel clicked on during that period was PPC, divided by the total dollars of PPC marketing spend during that period
*Source: Frost & Sullivan, New Zealand Post, 2020 New Zealand eCommerce Review Notes:
Online clothing and footwear sales in Australia are forecast to increase to almost $10 billion (35.9% of total clothing and footwear retail sales) by 2024. Frost & Sullivan, The Online Retail Market, October 2021.
Online beauty and personal care (BPC) sales in Australia are forecast to increase to $2.8 billion (22.0% of total BPC retail sales) by 2024. Frost & Sullivan, The Online Retail Market, October 2021
Online furniture and homewares retail sales in Australia are forecast to increase to $1.1 billion by 2024. Frost & Sullivan, The Online Retail Market, October 2021
New Zealand data is for the broader homewares, appliances and electronics category and hence is not directly comparable with other markets. Online luxury goods sales are forecast to be $1.3 billion (30% of total personal luxury goods sales) by 2024. (Frost & Sullivan, The Online Retail Market, October 2021)
Financial review by the Chief Financial Officer
Financial Key Performance Indicators
The Group has continued to make good progress in scaling its marketplace channel, whilst there was a 6.3% decline in statutory revenue, the Gross Merchandise value (GMV)(5) increased by 36% compared to prior period last year.
The reason being that products sold through our marketplace have lower gross margins but high contribution to the bottom line as we do not take any inventory risk or operational responsibility. Reported statutory revenue from the sale of these products is significantly lower. As we further scale the marketplace channel this will result in a shift in the proportion of GMV and will result in a decrease in statutory revenue as a percentage of GMV, but an increase in gross margin.
Financial Performance (A$m) H1 FY22 H1 FY21 Change -------------------------------- --------- --------- ------- Gross Merchandise value (GMV) $86.7 $63.8 36.0% Statutory Revenue $59.7 $63.8 -6.3% Gross profit $25.3 $24.2 4.6% Operating expenses $24.3 $21.4 13.3% Underlying EBITDA $1.0 $2.7 -63.4% Underlying EBITDA / Statutory Revenue (%) 2% 4% -60.9%
Statutory Revenue and Gross Merchandise value (GMV)
(A$m) H1 FY22 H1 FY21 Change ------------------------------- --------- --------- ------- Statutory Revenue $59.7 $63.8 -6.3% Less: Commission Revenue -$3.6 $0.0 NA Add: Marketplace Seller $23.4 $0.0 NA Gross Merchandise value (GMV) $86.7 $63.8 36.0%
GMV increased by 36% to A$86.7m (H1 FY21: A$63.8m), reflecting progress in scaling the Group's off-price marketplace platform, which is expected to become the Group's largest sales channel. As a result of the changing sales mix and growth of the marketplace channel, statutory revenue declined by 6% to A$59.7m (H1 FY21: A$63.8m)
Gross Margins
Gross profit was A$25.3m (H1 FY21: A$24.2m), with gross margins improving to 42.3%, an increase of 410 basis points (H1 FY21: 37.9%). As we scale the marketplace channel this will result in a shift in the proportion of GMV and will result in a decrease in statutory revenue as a percentage of GMV, but an increase in gross margin.
Operating Expenses(6)
Whilst it is not a statutory measure under IFRS, given the material shift in sales mix from the growth of marketplace, management considers Gross Merchandise Value (GMV) as key performance indicators for assessing operating expenses of the business.
The Group's fixed cost as percentage of GMV has reduced to 9% (H1 FY21: 10%) and variable costs have reduced to 19% (H1 FY20: 24%). Reduction in variable cost primary came from reduction in warehouse labour from 5.1% of GMV to 2.9% of GMV and marketing efficiency from 7.8% to 7.3%.
(A$m) H1 FY22 H1 FY21 ----------------------------------- --------- --------- Fixed cost $8.1 $6.2 Variable cost $16.2 $15.2 Operating expenses $24.3 $21.4 Fixed cost / GMV (%) 9.4% 9.7% Variable cost / GMV (%) 18.7% 23.9% Operating expenses / GMV (%) 28.0% 33.6% Fixed cost / statutory revenue (%) 14% 10% Variable cost / Statutory revenue (%) 27% 24% Operating expenses / Statutory revenue (%) 41% 34%
(5) Gross merchandise value is total sales volume transacting through the platform (retail and marketplace).
(6) Operating expenses is the different between gross profit and underlying EBITDA
Balance Sheet, Cash and Working Capital
The Group's closing net cash balance was A$3.8m (H1 FY21: A$15.8m) and the Group remains bank debt-free (although, post period end is utilising an invoice financing facility of A$0.9m in place. The main cash movements from the A$9.2m cash balance as of 30 June 2021 were Investment in additional own-stock inventory (A$0.6m), increase in trade receivables (A$1.7m) and a decrease in trade payables and contract liabilities as a result of change in the sales mix (A$1.9m).
(A$m) ------------------- ------ Net Cash June 2021 $9.2 Underlying EBITDA $1.0 IFRS-16 (leases) -$0.9 Capex -$0.8 Inventory -$0.6 Trade receivable -$1.7 Payable & Others -$2.4 Net Cash Dec 2021 $3.8 -------------------- ------
Underlying EBITDA
As noted above, the Group manages its operations by looking at the underlying EBITDA which excludes the impact of several one-off and non-cash items of a non-trading nature. This, in the Board's opinion, provides a more representative measure of the Group's performance. A reconciliation between reported profit before tax and underlying EBITDA is included in note 5 to the financial statements and outlined below.
H1 FY22 H1 FY21 Change ------------------------------ --------- --------- ------- Reported EBITDA -$1.7 $2.7 -$4.4 Share based payments $0.1 $0.0 One-off costs & discontinued activities $1.7 $0.4 Unrealised foreign exchange loss $0.9 -$0.6 $2.7 -$0.2 $2.9 --------- --------- ------- Underlying EBITDA $1.0 $2.5 -$1.5
Included within one-off items are items of a non-trading, non-recurring nature, including reorganisation costs, IPO adviser fees, termination charges and other costs described above.
Unrealised foreign exchange loss relates to the revaluation of foreign currency balance sheet items at period end. The significant balance in the prior period is attributed to the Australian dollar, the Group's functional and presentation currency, weakening against the Group's key trading currencies during the period.
_____________________________
Winky Sarwana
Interim Chief Financial Officer
31 March 2022
MySale Group Plc Statements of profit or loss and other comprehensive income For the period ended 31 December 2021 Audited Unaudited six months year ended ended 31 December 30 June Note 2021 2020 2021 A$'000 A$'000 A$'000 Revenue 3 59,725 63,763 117,893 Cost of sales (34,434) (39,587) (71,476) Gross profit 3 25,291 24,176 46,417 -------- -------- -------- Other operating (losses)/gain, net 4 (894) 613 (1,120) Interest income 10 78 78 Expenses Selling and distribution expenses (18,214) (16,338) (31,955) Administration expenses (10,448) (9,191) (18,267) Impairment of receivables 7 (6) (204) (217) Finance costs (279) (158) (299) -------- -------- -------- Loss before income tax expense (4,540) (1,024) (5,363) Income tax expense (336) (369) (3,085) ----- ----- ------- Loss after income tax expense for the period attributable to the owners of MySale Group Plc (4,876) (1,393) (8,448) Other comprehensive income/(loss) Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations 643 (1,282) 432 Other comprehensive income/(loss) for the period, net of tax 643 (1,282) 432 ------- ------- ------- Total comprehensive income for the period attributable to the owners of MySale Group Plc (4,233) (2,675) (8,016) ======= ======= ======= Cents Cents Cents Basic earnings per share 16 (0.54) (0.16) (0.96) Diluted earnings per share 16 (0.54) (0.16) (0.96)
The above statements of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
MySale Group Plc Balance sheets As at 31 December 2021 Audited Unaudited six months year ended ended 31 December 30 June Note 2021 2020 2021 A$'000 A$'000 A$'000 Assets Current assets Cash and cash equivalents 6 3,825 15,840 9,210 Trade and other receivables 7 3,568 3,161 3,001 Inventories 6,115 2,622 5,518 Income tax receivable 4 - - Other assets 1,190 586 1,695 Total current assets 14,702 22,209 19,424 ------ ------ ------ Non-current assets Property, plant and equipment 685 990 764 Right-of-use assets 8 2,693 4,601 3,487 Intangibles 9 25,232 28,201 26,370 Other assets 1,705 1,107 1,777 Deferred tax 9 3,029 322 Total non-current assets 30,324 37,928 32,720 ------ ------ ------ Total assets 45,026 60,137 52,144 ------ ------ ------ Liabilities Current liabilities Trade and other payables 10 15,403 16,840 14,304 Contract liabilities 11 4,026 6,421 7,047 Lease liabilities 1,596 1,609 1,593 Income tax payable - 16 - Employee benefits 1,125 1,279 1,116 Provisions 1,037 1,314 1,089 Total current liabilities 23,187 27,479 25,149 ------ ------ ------ Non-current liabilities Lease liabilities 2,794 4,242 3,705 Employee benefits 520 594 584 Total non-current liabilities 3,314 4,836 4,289 ------ ------ ------ Total liabilities 26,501 32,315 29,438 ------ ------ ------ Net assets 18,525 27,822 22,706 ====== ====== ====== Equity Stated capital 12 338,215 338,215 338,215 Other reserves (123,655) (126,289) (124,350) Accumulated losses (196,015) (184,084) (191,139) Equity attributable to the owners of MySale Group Plc 18,545 27,842 22,726 Non-controlling interest (20) (20) (20) Total equity 18,525 27,822 22,706 ========= ========= ========= The interim financial statements of MySale Group Plc (company number 115584 (Jersey)) were approved by the Board of Directors and authorised for issue on XX March 2022. They were signed on its behalf by: ___________________________ ___________________________ Carl Jackson Charles Butler Chairman Senior Independent Director 31 March 2022 MySale Group Plc Statements of changes in equity For the period ended 31 December 2021 Stated Other Accumulated Non-controlling Total capital reserves losses interest equity Unaudited six months ended 31 December A$'000 A$'000 A$'000 A$'000 A$'000 Balance at 1 July 2020 328,971 (124,979) (182,691) (20) 21,281 Loss after income tax expense for the period - - (1,393) - (1,393) Other comprehensive income for the period, net of tax - (1,282) - - (1,282) Total comprehensive income for the period - (1,282) (1,393) - (2,675) Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs 9,244 - - - 9,244 Share-based payments - (28) - - (28) Balance at 31 December 2020 338,215 (126,289) (184,084) (20) 27,822 ======= ========= =========== =============== =========== Stated Other Accumulated Non-controlling Total capital reserves losses interest equity Unaudited six months ended 31 December A$'000 A$'000 A$'000 A$'000 A$'000 Balance at 1
July 2021 338,215 (124,350) (191,139) (20) 22,706 Loss after income tax expense for the period - - (4,876) - (4,876) Other comprehensive income for the period, net of tax - 643 - - 643 Total comprehensive income/(loss) for the period - 643 (4,876) - (4,233) Transactions with owners in their capacity as owners: Share-based payments - 52 - - 52 Balance at 31 December 2021 338,215 (123,655) (196,015) (20) 18,525 ======= ========= =========== =============== =========== MySale Group Plc Statements of changes in equity For the period ended 31 December 2021 Stated Other Accumulated Non-controlling Total capital reserves losses interest equity Audited year ended 30 June A$'000 A$'000 A$'000 A$'000 A$'000 Balance at 1 July 2020 328,971 (124,979) (182,691) (20) 21,281 Loss after income tax expense for the period - - (8,448) - (8,448) Other comprehensive income for the period, net of tax - 432 - - 432 Total comprehensive income/(loss) for the period - 432 (8,448) - (8,016) Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs 9,244 - - - 9,244 Share-based payments - 197 - - 197 Balance at 30 June 2021 338,215 (124,350) (191,139) (20) 22,706 ======= ========= =========== =============== =========== MySale Group Plc Statements of cash flows For the period ended 31 December 2021 Audited Unaudited six months year ended ended 31 December 30 June Note 2021 2020 2021 A$'000 A$'000 A$'000 Cash flows from operating activities Loss before income tax expense for the period (4,540) (1,024) (5,363) Adjustments for: Depreciation and amortisation 2,739 3,626 7,007 Net loss on disposal of property, plant and equipment 19 - 155 Net loss on disposal of intangibles - - 4 Share-based payments 52 - 197 Interest income (10) (78) (78) Interest expense 279 - 299 (1,461) 2,524 2,221 Change in operating assets and liabilities: Decrease/(increase) in trade and other receivables (425) 946 1,106 Decrease/(increase) in inventories (597) 139 (2,757) Decrease/(increase) in other operating assets 431 (226) (1,194) Increase/(decrease) in trade and other payables 1,774 (3,326) (4,311) Increase/(decrease) in contract liabilities (3,021) 235 861 Decrease in other provisions (161) (685) (88) (3,460) (393) (4,162) Interest received 10 78 78 Interest paid (279) - (299) Net cash used in operating activities (3,729) (315) (4,383) ------- ------- ------- Cash flows from investing activities Payments for property, plant and equipment (102) - (135) Payments for intangibles 9 (659) (672) (1,231) Proceeds from release of security deposits - 522 - Net cash used in investing activities (761) (150) (1,366) ----- ----- ------- Cash flows from financing activities Proceeds from issue of shares, net of transactions costs - 9,244 9,244 Repayments of lease liabilities (895) (778) (1,007) Net cash from/(used in) financing activities (895) 8,466 8,237 ----- ----- ------- Net increase/(decrease) in cash and cash equivalents (5,385) 8,001 2,488 Cash and cash equivalents at the beginning of the financial period 9,210 6,660 6,660 Effects of exchange rate changes on cash - 1,179 62 Cash and cash equivalents at the end of the financial period 6 3,825 15,840 9,210 ======= ====== ===== MySale Group Plc Notes to the financial statements 31 December 2021 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 operation of online shopping outlets for consumer goods like ladies, men and children's fashion clothing, accessories, beauty and homeware items. MySale Group Plc is a public company, limited by shares, listed on the AIM (Alternative Investment Market), a sub-market of the London Stock Exchange. The Company is incorporated and registered under the Companies (Jersey) Law 1991. The Company is domiciled in Australia. The registered office of the Company is Ogier House, The Esplanade, 44 Esplanade Street, St.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 Directors, on 31 March 2022. Note 2. Significant accounting policies These financial statements for the interim half-year reporting period ended 31 December 2021 have been prepared in accordance with International Accounting Standards IAS 34 'Interim Financial Reporting'. These interim financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2020 and any public announcements made by the Company during the interim reporting period. 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 periods presented, except for the policies stated below. Going concern This interim report has been prepared on the assumption that the business is a going concern. In reaching this assessment, the Directors have considered a period extending at least 12 months from the date of approval of this half-yearly financial report. This assessment takes account of the additional cash resource following the recent completion of the $2.3m raise through the issue of the Loan Notes and has considered a number of scenarios, taking account the possible impact of current trading in relation to the revenue forecast for the next 12 months. The Board has also considered that a number of unexpected events could occur which impact the cash position and that there is no guarantee that these internally generated forecasts will be realised. The Directors have also considered a downside case, assuming a further 10% reduction in revenue against current Board forecasts during the next 12 months. Although it is difficult to predict how prolonged the impact of COVID-19, in particular the Omicron variant, and remaining restrictions will impact on the Group's markets for the remainder of calendar 2022 and beyond, these downside scenarios are considered unlikely. In addition, there are a number of actions which are being implemented to help mitigate the impact on cash outflows, including but not limited to, scaling the Order After Sale and Marketplace channels which have a negative working capital profile, decreasing the amount of Own Stock inventory, further cost reductions, closing OURPAY the Groups proprietary buy now pay later service and further factoring and supply chain finance. Under the scenarios modelled there would be adequate cash available to the Group up until April 2023 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 Standards Board that are mandatory for the current reporting period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. MySale Group Plc Notes to the financial statements 31 December 2021 Note 3. 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 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. Operating segment information Australia and South-East New Zealand Asia Total Unaudited six months ended 31 December - 2021 A$'000 A$'000 A$'000 Revenue Sales to external customers transferred at a point in time 53,936 2,189 56,125 Commission revenue recognised at a point in time 3,601 - 3,601 Total revenue 57,536 2,189 59,725 ----------- ---------- -------- Gross profit 25,144 147 25,291 ----------- ---------- Other income (894) Selling and distribution expenses (18,214) Administration expenses (10,448) Finance income 10 Finance costs (279) Impairment of receivables (6) Loss before income tax expense (4,540) Income tax expense (336) -------- Loss after income tax expense (4,876) -------- Australia and South-East New Zealand Asia Total Unaudited six months ended 31 December - 2020 A$'000 A$'000 A$'000 Revenue Sales to external customers transferred at a point in time 60,387 3,376 63,763 Total revenue 60,387 3,376 63,763 ----------- ---------- -------- Gross profit 22,647 1,529 24,176 ----------- ---------- Other operating gain, net 613 Selling and distribution expenses (16,338) Administration expenses (9,191) Finance income 78 Finance costs (158) Impairment of receivables (204) Loss before income tax expense (1,024) Income tax expense (369) -------- Loss after income tax expense (1,393) -------- MySale Group Plc Notes to the financial statements 31 December 2021 Australia and New South-East Zealand Asia Total Audited year ended 30 June 2021 A$'000 A$'000 A$'000 Revenue Sales to external customers transferred at a point in time 109,726 7,141 116,867 Commission revenue recognised at a point in time 1,026 - 1,026 Total revenue 110,752 7,141 117,893 Gross profit 43,580 2,837 46,417 --------- ---------- Other (loss)/gain, net (1,120) Selling and distribution expenses (31,955) Administration expenses (18,267) Finance income 78 Finance costs (299) Impairment of receivables (217) -------- Loss before income tax expense (5,363) Income tax expense (3,085) -------- Loss after income tax expense (8,448) -------- Note 4. Other operating (losses)/gain, net Audited Unaudited six months year ended ended 31 December 30 June 2021 2020 2021 A$'000 A$'000 A$'000 Net foreign exchange (losses)/gains (921) 661 (921) Net loss on disposal of property, plant and equipment (9) (65) (157) Other income/(losses) 36 17 (42) Other operating (losses)/gain, net (894) 613 (1,120) ========== ========== =========== MySale Group Plc Notes to the financial statements 31 December 2021 Note 5. EBITDA reconciliation (earnings before interest, taxation, depreciation and amortisation) Audited Unaudited six months year ended ended 31 December 30 June 2021 2020 2021 A$'000 A$'000 A$'000 Loss before income tax includes the following specific expenses: EBITDA reconciliation Loss before income tax expense (4,540) (1,024) (5,363) Less: Interest income (10) (78) (78) Add: Interest expense 122 158 299 Add: Depreciation and amortisation 2,739 3,626 7,007 EBITDA (1,689) 2,682 1,865 Underlying EBITDA represents EBITDA adjusted for certain items, as outlined below. Underlying EBITDA reconciliation EBITDA (1,689) 2,682 1,865 Impairment of receivables 6 204 217 Share-based payments 52 28 197 Reorganisation costs* 121 283 652 One-off costs of non-trading, non-recurring nature including ASX listing expenses 1,593 102 357 Unrealised foreign exchange movements 922 (554) 904 Underlying EBITDA 1,005 2,745 4,192 ---------- ---------- ----------- * Costs in relation to the closure of overseas operations. Note 6. Current assets - cash and cash equivalents Audited Unaudited six months year ended ended 31 December 30 June 2021 2020 2021 A$'000 A$'000 A$'000 Cash at bank 3,715 15,730 9,100 Bank deposits at call 110 110 110 3,825 15,840 9,210 ========== ========== =========== MySale Group Plc Notes to the financial statements 31 December 2021 Note 7. Current assets - trade and other receivables Audited Unaudited six months year ended ended 31 December 30 June 2021 2020 2021 A$'000 A$'000 A$'000 Trade receivables 3,486 2,763 1,783 Less: Allowance for expected credit losses (60) (124) (85)
3,426 2,639 1,698 Other receivables 142 - - Sales tax receivable - 522 1,303 3,568 3,161 3,001 ========== ========== =========== Trade receivables include uncleared cash receipts due from online customers which amounted to A$2,059,000 (30 June 2021: A$1,713,000 and 31 December 2020: A$1,858,000). Allowance for expected credit losses The Group has recognised a loss of A$6,000 (30 June 2021: A$217,000 and 31 December 2020: A$204,000) in profit or loss in respect of impairment of receivables for the half-year ended 31 December 2021. Note 8. Non-current assets - right-of-use assets Audited Unaudited six months year ended ended 31 December 30 June 2021 2020 2021 A$'000 A$'000 A$'000 Property and equipment - right-of-use 6,180 5,362 6,180 Less: Accumulated depreciation (3,487) (761) (2,693) 2,693 4,601 3,487 =========== ========= =========== Reconciliations Reconciliations of the written down values at the beginning and end of the current financial period are set out below: Property Equipment Total Unaudited six months ended 31 December A$'000 A$'000 A$'000 Balance at 1 July 2021 3,462 25 3,487 Depreciation expense (787) (7) (794) Balance at 31 December 2021 2,675 18 2,693 ======== ========= ====== MySale Group Plc Notes to the financial statements 31 December 2021 Note 9. Non-current assets - intangibles Audited Unaudited six months year ended ended 31 December 30 June 2021 2020 2021 A$'000 A$'000 A$'000 Goodwill - at cost 21,239 21,206 21,233 Customer relationships - at cost 3,926 3,850 3,906 Less: Accumulated amortisation (3,926) (3,718) (3,906) - 132 - Software - at cost 29,839 28,654 29,189 Less: Accumulated amortisation (25,929) (22,061) (24,203) 3,910 6,593 4,986 ERP system 4,885 4,883 4,885 Less: Accumulated amortisation (4,802) (4,613) (4,734) 83 270 151 25,232 28,201 26,370 ========== ========== =========== Reconciliations Reconciliations of the written down values at the beginning and end of the current financial period are set out below: Customer ERP Goodwill relationships Software system Total Unaudited six months ended 31 December A$'000 A$'000 A$'000 A$'000 A$'000 Balance at 1 July 2021 21,233 - 4,986 151 26,370 Additions - - 654 - 654 Exchange differences 6 - - - 6 Amortisation - - (1,730) (68) (1,798) Balance at 31 December 2021 21,239 - 3,910 83 25,232 ======== ============= ======== ====== ======= Note 10. Current liabilities - trade and other payables Audited Unaudited six months year ended ended 31 December 30 June 2021 2020 2021 A$'000 A$'000 A$'000 Trade payables 8,169 11,487 8,380 Other payables and accruals 4,101 2,800 3,541 Sales tax payable 3,133 2,553 2,383 15,403 16,840 14,304 ========== ========== =========== MySale Group Plc Notes to the financial statements 31 December 2021 Note 11. Current liabilities - contract liabilities Audited Unaudited six months year ended ended 31 December 30 June 2021 2020 2021 A$'000 A$'000 A$'000 Contract liabilities 4,026 6,421 7,047 ========== ========== =========== 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$4,026,000 as at 31 December 2021 (A$6,421,000 as at 31 December 2020 and A$7,047,000 as at 30 June 2021) and is expected to be recognised as revenue in future periods as follows: Audited Unaudited six months year ended ended 31 December 30 June 2021 2020 2021 A$'000 A$'000 A$'000 Within six months 4,026 6,421 7,047 ========== ========== =========== 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 12. Equity - stated capital On 28 May 2014 the company converted ordinary shares of GBP1 nominal value to ordinary shares of GBPnil nominal value, in a share-for-share exchange. In accordance with Companies (Jersey) Law 1991 Paragraph 39A, these issued shares have been recognised and maintained in a stated capital account. Unaudited Unaudited Unaudited six six Unaudited six months months months Audited six months ended Audited ended ended year ended 31 Decemb year ended 31 31 ended 31 December er 30 June December December 30 June 2021 2020 2021 2021 2020 2021 Shares Shares Shares A$'000 A$'000 A$'000 Ordinary shares GBPnil each - fully paid 902,465,982 902,465,982 902,465,982 338,215 338,215 338,215 Less: Treasury shares (25,533,118) (25,533,118) (25,533,118) - - - 876,932,864 876,932,864 876,932,864 338,215 338,215 338,215 ============ ============ ============ ========= ========= ======= Authorised stated capital 959,406,638 (31 December 2020: 959,406,638 and 30 June 2021: 959,406,638) ordinary shares of GBPnil each. Ordinary shares Ordinary shares entitle the holder to participate in any dividends declared and any proceeds attributable to shareholders should the Company be wound up in proportions that consider both the number of shares held and the extent to which those shares are paid up. MySale Group Plc Notes to the financial statements 31 December 2021 Treasury shares The Company has two employee share plans; (i) the Executive Incentive Plan ('EIP') and (i) 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 13. Equity - dividends There were no dividends paid, recommended or declared during the current or previous financial period. Note 14. Contingent liabilities
There was no contingent liabilities as at 31 December 2021, 31 December 2020 and 30 June 2021. Note 15. Related party transactions Parent entity MySale Group Plc is the parent company of the Group. Transactions with related parties There were no transactions with related parties during the current and previous financial period. Receivable from and payable to related parties There were no trade receivables from or trade payables to related parties at the current and previous reporting date. Loans to/from related parties Ultimate Controlling party The directors consider that the Group has no ultimate controlling party. Note 16. Earnings per share Unaudited Unaudited six months six months Audited ended 31 ended 31 year ended December December 30 June 2021 2020 2021 A$000 A$000 A$000 Loss after income tax attributable to the owners of MySale Group Plc (4,876) (1,393) (8,448) Underlying EBITDA attributable to the owners of MySale Group Plc 1,005 2,745 4,192 ----------- ----------- ----------- Number Number Number Weighted average number of ordinary shares used in calculating basic earnings per share 902,465,982 856,147,977 879,350,126 Weighted average number of ordinary shares used in calculating diluted earnings per share 902,465,982 856,147,977 879,350,126 MySale Group Plc Notes to the financial statements 31 December 2021 Cents Cents Cents Basic earnings per share (0.54) (0.16) (0.96) Diluted earnings per share (0.54) (0.16) (0.96) Underlying earnings per share 0.11 0.32 0.48 30 June 2021: 59,122,964 and 31 December 2020: 65,985,501) employee long-term incentives have been excluded from the diluted earnings calculation as they are anti-dilutive for the period. Note 17. Events after the reporting period The consequences of the Coronavirus (COVID-19) pandemic are continuing to be felt around the world, and its impact on the consolidated entity, if any, has been reflected in its published results to date. Whilst it would appear that control measures and related government policies, including the roll out of the vaccine, have started to mitigate the risks caused by COVID-19, it is not possible at this time to state that the pandemic will not subsequently impact the consolidated entity's operations going forward. The consolidated entity now has experience in the swift implementation of business continuation processes should future lockdowns of the population occur, and these processes continue to evolve to minimise any operational disruption. Management continues to monitor the situation both locally and internationally. The higher-than-expected inventory levels have impacted working capital. Management have reduced the inventory balances and have, where possible, cancelled or delayed future orders. The Group has implemented several initiatives to support its working capital and is also considering strategic financing options. No other matter or circumstance has arisen since 31 December 2021 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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March 31, 2022 07:40 ET (11:40 GMT)
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