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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 : 1412Y
MySale Group PLC
01 March 2017
1 March 2017 Interim Results MySale Group plc (AIM: MYSL) ("the group") the leading international online retailer, is pleased to announce its unaudited interim results for the six months to 31 December 2016. H1 Financial highlights * Underlying(1) EBITDA significantly increased to A$3.0 million (H1 FY16: A$1.8 million) * Online(2) revenue increased 19% to A$127.1 million (H1 FY16: A$107.0 million) * Good gross profit growth of 17% to A$38.4 million (H1 FY16: A$32.7 million) * Underlying profit before tax A$0.6 million (H1 FY16: loss A$0.2 million) * Strong balance sheet with net cash balance increased to A$29.1 million from A$27.5 million at 30 June 2016 and A$23.4 million at 31 December 2016 H1 Operational highlights * Active customer base increased 19% to 870,000 (H1 FY16: 731,000) * Continued focus on activating customers with higher lifetime-value o Average order value (AOV) increased 3% to A$86 (H1 FY16: A$84) o Robust average revenue per active customer at A$295 (H1 FY16: A$294) * Mobile channel represented 58% of orders * Returns rate remains at industry leading levels of only 5% * Planned increased investment in the technology platform * Strategic plan to increase own-buy continues - now 19% of sales * After the period end launched a strategic partnership with USA retailer gilt.com Carl Jackson, Chief Executive Officer, commented "We are pleased with the strong start we have made to the year. Financially we have performed well and strategically have made good progress towards our goals. The number of active customers, online revenue and gross profit each increased substantially as our compelling consumer proposition resonated with our customers around the world. "In ANZ we have continued to shift the emphasis of our marketing towards re-engagement and retention, with encouraging early improvements in marketing efficiency, and have also seen good progress in the development of our retail marketplace platform. "We carry good momentum into the, historically stronger, second half of the year and have a number of exciting initiatives which will support our future growth. The growth of our underlying EBITDA for four consecutive half year periods endorses our strategic plan and we remain confident in the full year's prospects". (1) Underlying basis: stated before non-recurring and certain non-cash items (2) Online: the group's online web-based retail activities
Enquiries:
MySale Group plc Carl Jackson, Chief Executive +61 (0) 414 817 843 Graeme Burns, Corporate Development Director +44 (0) 777 585 4516 Zeus Capital Limited (Nominated Adviser & Joint Broker) +44 (0) 20 3829 5000 Giles Balleny, Corporate Finance Benjamin Robertson, Corporate Broking N+1 Singer (Joint Broker) +44 (0) 20 7496 3000 Mark Taylor Maitland +44 (0) 20 7379 5151 Dan Yea About MySale Group MySale is a leading international online retailer with established online flash sales and retail websites in Australia, New Zealand, South-East Asia and the United Kingdom. Founded in 2007, the Group provides customers with access to outstanding brands and products at discounted prices whilst simultaneously providing brand partners unique international inventory and sales solutions. The Group's flash sales websites host time limited sales in each of its territories. These flash sales are focused on fashion, apparel, health, beauty and homeware categories and are predominantly undertaken on a consignment inventory basis. The retail websites operate in Australia and focus on similar product categories using mostly drop-shipped inventory. Customers' shopping experiences are enhanced by the Group's deployment of leading edge technology to ensure personalised and localised product offerings. Customer convenience has been at the heart of the Group's technology development since the earliest days and now mobile commerce is the Group's main sales channel. The Group's online sales are supported by a robust and flexible network of in-house supply chain infrastructure and technology that enables MySale to offer products from around the world for sale and delivery to customers in each territory. As a result of these exceptional capabilities in inventory management and international sales MySale has built an enviable portfolio of over 2,500 brand partners from whom products are sourced. The Group operates websites under a number of different brands all of which operate on a uniform technology platform and a single international logistics infrastructure. The Group's flash sales brands are; OzSale and BuyInvite in Australia; NzSale in New Zealand; SingSale in Singapore; MySale in Australia, New Zealand Malaysia, Thailand, the Philippines, the United Kingdom and Hong Kong, and Cocosa in the United Kingdom, Australia and New Zealand; whilst the Group's retail websites are Deals Direct, OO.com and Top Buy in Australia.
Chairman's statement
During the first half to 31 December 2016 the group has built on the momentum of the previous year. We have made good progress against the goals we had set ourselves and this is reflected in our much improved financial performance. Solid improvements in gross profit have been achieved and our generation of underlying EBITDA has increased markedly.
We maintain our aims to drive increased activity with existing customers, grow our active customer base and increase profitability whilst re-investing into developments that will drive future growth. We have well invested technology and distribution platforms, but will maintain our process of continual investment and improvement in order to provide even better experiences for customers and solutions to our brand partners. Following the investment in product selection during the prior year, working capital requirements have returned to low levels and cash generation has been positive.
The second half is traditionally stronger and whilst there is much to accomplish the group is performing in line with our expectations for the current financial year and we have a number of exciting new initiatives in place which will support our plans to grow.
Iain McDonald
Chairman
28 February 2017
Review of operations by the Chief Executive Officer
MySale Group Plc ('the group') has made excellent progress in the six months to 31 December 2016 (H1 FY17). Planned strategic initiatives have delivered another half of improved financial performance and positioned the group for further, profitable, growth.
The group's continued focus on customer engagement meant that the active customer base grew 19% and in turn online revenue, which represents over 90% of the group total, grew substantially, up 19%, to A$127.1 million (H1 FY16: A$107.0 million).
Total group revenue rose 7% to A$136.7 million (H1 FY16: A$128.2 million) which reflects the strong online growth referred to above, together with a planned reduction in lower margin offline revenue in the period. The group's focus on gross profit growth has delivered the increase of 17% to A$38.4 million (H1 FY16: A$32.7 million) which is underpinned by a 260 bp increase in gross margin to 28.1% (H1 FY16: 25.5%).
Growth vs H1 FY17 FY16 H1 FY16 A$ million Revenue Gross GP% Revenue Gross Revenue Gross GP% Profit Profit Profit Group 136.7 38.4 28.1% +7% +17% 128.2 32.7 25.5% ------------ -------- -------- ------ -------- -------- -------- -------- ------ ANZ 112.3 32.8 29.2% +3% +18% 109.5 27.9 25.5% S-E Asia 17.4 4.5 25.8% +12% +16% 15.5 3.9 24.9% ROW 7.0 1.1 15.8% +112% +14% 3.3 1.0 29.4%
This improved trading performance is driven by the group's clear plan to prioritise the growth of gross profit and secure higher lifetime-value customers. This combined with a carefully controlled cost base drove the group's underlying EBITDA significantly higher to A$3.0 million (H1 FY16: A$1.8 million). The group's strategic plan has now grown underlying EBITDA in each of the last four half year periods.
The basis of the group's improved trading and financial performance this period has its foundations in 2015 when the group re-focused the business on its core aims of providing exceptional value in branded products to customers and exceptional inventory management solutions to brand partners within the group's three core territories. Whilst there is still much work to do and many opportunities to capture the results of H1 FY17 represent yet another step on the group's path of continued profitable growth.
During the period, and across all territories, the group continued to dedicate its marketing spend, which was circa 7% of revenue, almost exclusively into measurable, digital channels to attract and engage new and existing customers. Ongoing communications with existing customers has seen those loyal and engaged customers continue to spend with reliable regularity and with increasing order sizes.
Recently the group diversified that marketing spend, notably in ANZ, by increasing the emphasis of spend into customer re-engagement activity. Whilst it is very early in this diversification plan the results have been encouraging and marketing efficiency has improved.
Technology Development
The group has, as planned, increased capital expenditure to further develop its proprietary technology capabilities and will do so again in the second half of the financial year. During the period an important phase of work was reaching a conclusion which saw the release of a new and enhanced version of the group's technology platform in January 2017.
The new platform is now fully integrated across both the established flash sale and the nascent retail marketplace activities of the group. A focus of the development has been to enhance the group's data capabilities for better collection and analysis, improved machine learning and automation which in turn will drive improved customer experiences, increased revenue and more efficiency. The platform provides seamless user interaction across all devices and has a strong focus on the mobile buyer which represents 58% of the group's orders.
The group has continued to use its technology innovation for tactical improvements in the customer proposition which drive revenue, one example being the development of Our Pay. Our Pay is an instalment payment scheme which has the ability to increase purchasing with those customers accepted to the programme. The group's instalment solution was developed in house on the group's proprietary platform which has delivered a more flexible solution, which is better suited to the group's requirements than comparable third party solutions.
Brand and Strategic Partnerships
The group has acquired a number of new brand partners during the period, the most notable being the launch of a relationship with gilt.com, a US based online retailer which is part of The Hudson's Bay Company. This is the start of a strategic partnership which is anticipated to provide a significant product selection available to all the group's territories.
The strategic partnership launched with Sports Direct, as previously announced, for access to more than 150,000S SKU's of Sports Direct's inventory is now operational and the group commenced live sales on its retail marketplace in the second quarter. Given the size of this inventory the group is now in a period of planning, testing and optimising the merchandising and marketing of this inventory to the ANZ customer base. Forging partnerships with flagship retailers such as Gilt and Sports Direct is a strong endorsement of the group's capabilities in supporting brands in establishing new sales channels as well as inventory management.
Retail Marketplace
The group's nascent retail marketplace channel, which operates, on a supplier drop-ship inventory basis, in the product verticals of sports, home and gifting has the three ANZ websites of "dealsdirect" "oo" and "topbuy" acquired in H2 FY16 as its foundation. The new group technology platform described above means that the retail marketplace and flash channels operate on the same platform which allows for numerous advantages including: better sharing of data; more efficient use of resources; visibility of inventory performance; and reduced buying administration.
The creation of the retail marketplace platform represents a step change in the potential addressable audience and in future revenue opportunities. Designed with mobile commerce at its heart and to be simple and intuitive for vendors to use, this platform will further support our brand partners and their sales ambitions. Increasingly brands use marketplace solutions to support their international sales as it provides local knowledge, existing audiences, and ease of start-up to their expansion plans.
Operations
In FY16 the group implemented its strategy to increase the proportion of inventory that is obtained on 'own-buy', rather than on a consignment basis, and in this first half own-buy increased to 19% of online revenue, consistent with that strategy. This strategy supports deeper relationships with brand partners, slightly higher gross margins and wider product selection for customers. Own-buy activity is focused on staple, branded goods.
The combination of the group's sourcing, compelling consumer value, product selection and reliable service means that returned goods remain at industry leading levels of only 5% overall.
Australia & New Zealand
Within this operating territory the group has continued to successfully implement our strategic initiatives and improved gross profit, by 18% to A$32.8 million (H1 FY16: A$27.9 million) and gross margin to 29% (H1 FY16: 25%) whilst also growing revenue by 3% to A$112.3 million (H1 FY16: 109.5 million). The increase in AOV to c. $85 achieved in FY16 has been maintained by continued focus on a localised offer with strong merchandising, pricing and overall customer proposition.
As noted above the group's nascent retail marketplace sales channel was launched in this territory during the period and represents an opportunity to significantly increase the group's addressable market in the region. The first flagship retailer to join this marketplace was Sports Direct and they are now fully integrated to the group's platform which allows the process of marketing, merchandising and optimising the customer offer, from the c. 150,000 SKU's available, to start. The sporting goods market in ANZ is estimated to be worth in excess of A$3 billion annually and the strong value offer provided by Sports Direct combined with group's experience in connecting customers with brands is anticipated to create a compelling proposition in this vertical.
While the group's operation in ANZ is long established, it continues to provide attractive growth possibilities due to both the lower levels of internet penetration, in comparison to territories such as the United Kingdom and the USA, and this region's relative lack of off-price retailers.
South-East Asia
During the period this region had revenue growth of 12% to A$17.4 million (H1 FY16: A$15.5 million) and a 16% increase in gross profit to A$4.5 million (H1 FY16: A$3.8 million). The continued growth in revenue and profitability has been driven by the group's localisation plan for this territory which ensures that merchandising, pricing, payment and shipping solutions are all tailored to the needs of local consumers. The significant increase in AOV achieved in FY16 has been maintained.
The group's strategy for this territory has been to grow firstly the active customer base, so acquisition marketing is a priority, and then to build gross profitability and leverage this increasing scale to use resources more efficiently and achieve lower shipping rates. With a more profitable model now established, South-East Asia reinforces its position as a key element of the group's growth strategy.
In the medium to long term this region is anticipated to be increasingly significant as the group sees growth in both its customer base and demand for branded products, particularly European and USA brands. With a substantial addressable population, increasing disposable income, lack of off-price competition and high mobile penetration this region is well served by the group's strong value, branded sales offer and exceptional mobile commerce capability.
Rest of World
This territory comprises the group's operations within the United Kingdom, re-launched in the second half of FY15 and trading predominately under the Cocosa brand, which provides customers with compelling value in premium branded products.
The United Kingdom had a positive first half, as revenue increased by more than 100%, to A$7.0 million (H1 FY16: A$3.3 million) for the period. This significant growth was underpinned by increased numbers of active customers. Gross margin was lower than a year earlier but this is consistent with an early stage territory when margins are more likely to fluctuate as the business is developing the customer base. Full year margins are anticipated to be higher.
These are encouraging results and position the business for further growth in the current financial year. Whilst currently a relatively small part of the group's overall activities, this business operates in the UK's large and well developed online marketplace where engaged and active consumers can be acquired successfully and cost effectively. Given there is no online flash sale operator of scale in the UK the group has targeted becoming a leading operator in the country.
Outlook
The group made a strong start to the year with significantly improved financial performance and good progress against the strategic goals. Customers are buying in increasing numbers, group trading metrics remain stable or improving and both gross profit and underlying EBITDA moved forward again.
The group carries good momentum into the historically stronger second half of the year and has a number of exciting initiatives which will support the future growth plans.
Growth of underlying EBITDA for four consecutive half year periods provides an endorsement of the group's strategic plan. The board remains confident in the current year's prospects and that trading will be in line with the current range of analysts' projections of underlying EBITDA of A$8.5 to A$8.7 million.
Carl Jackson
Chief Executive Officer
28 February 2017
Financial review by the Chief Financial Officer
Revenue and Gross Profit
For the half year ended 31 December 2016 group revenue increased by 7% to A$136.7 million (H1 FY16: A$128.2 million) and gross profit increased substantially by 17% to A$38.4 million (H1 FY16: A$32.7 million) as a result of the strategic plans implemented in H1 FY16.
Operating Expenses
The substantial increase in activity and gross profit led underlying operating expenses to increase 14% to A$35.4 million (H1 FY16: A$30.9 million) in the period. The group has a number of operating expenses which are incurred in a profile that is weighted to the first half of the financial year.
Profit/Loss before Tax
The underlying profit before tax for the period is A$0.6 million (H1 FY16: loss A$0.2 million) and the reported loss before tax for the period is $A1.4 million (H1 FY16: A$0.5 million). This reported loss is after the inclusion of a number of one-off and non-cash items which are shown in more detail in note 4 to the financial statements in order to provide greater insight as to the underlying profitability of the group.
Taxation
The group has recorded a tax benefit of A$1.0 million for the year (H1 FY16: tax expense of A$0.1 million) which represents an effective rate of tax which diverges from the group's long term guidance of c. 30%. This divergence arises due to various tax adjustments and timing differences. Full details are provided in note 5 to the financial statements. The group has total tax losses of A$31 million (H1 FY16: A$30 million) with the majority located in Australia. The entire tax loss has been recognised with the provision of a deferred tax asset of A$10.9 million (H1 FY16: A$11.0 million).
Balance Sheet, Cash and Working Capital
The group's closing cash balance was A$37.8 million (H1 FY16: A$30.0 million) and the net cash balance increased to A$29.1 million (H1 FY16: A$30.0 million) from A$27.5 million at the prior year end June 2016.
The significant increase in cash balances over the last 12 months principally results from the combination of cash generated from operations and an improved working capital profile less investment into the technology platform in line with the group's strategic plan.
Capital expenditure increased, as planned, during the period as the group invested in the development of its proprietary technology platform. Total capital expenditure was A$3.2 million (H1 FY16: A$1.5 million).
Banking Facilities
The group has significant cash balances, held principally with HSBC with whom the group also has trade finance multi option debt facilities of GBPGBP3.0 million. In addition the group has trade finance facilities of A$12.2 million with ANZ Bank. All facilities are renewed on an annual basis. Of the total facilities of A$18.0 million, A$9.3 million remains undrawn at the period-end.
Key Performance Indicators
The group manages its operations through the use of a number of key performance indicators (KPI's) such as revenue, revenue growth, gross margin percentage, average order value (AOV), average revenue per active customer (RPAC), and underlying EBITDA.
Underlying Basis
The group manages its operations by looking at the underlying EBITDA which excludes the impact of a number of one-off and non-cash items of a non-trading nature as this, in the Board's opinion, provides a more representative measure of the group's performance. A reconciliation between reported profit before tax and underlying EBITDA is included at note 4 to the financial statements. Included within these items during the period were share based payments, unrealised FX costs and one-off costs including items relating to prior period reorganisations and one-off transition costs arising from system migration.
Andrew Dingle
Chief Financial Officer
28 February 2017
MySale Group Plc Statements of profit or loss and other comprehensive income For the period ended 31 December 2016 Unaudited Reviewed six months six months Audited ended ended year ended 31 December 31 December 30 June 2016 2015 2016 Note A$'000 A$'000 A$'000 Revenue Revenue from sale of goods 136,682 128,230 252,289 Cost of sale of goods (98,255) (95,503) (185,633) Gross profit 38,427 32,727 66,656 ------------ ------------ ----------- Other operating (loss)/gains, net (1,304) 971 2,173 Finance income 60 50 125 Finance costs (79) (22) (97) Finance income, net (19) 28 28 Expenses Selling and distribution expenses (23,098) (19,249) (37,460) Administration expenses (15,397) (14,931) (31,126) Share of loss of joint venture - (43) (104) -------- -------- -------- (Loss)/profit before income tax benefit/(expense) (1,391) (497) 167 Income tax benefit/(expense) 51,048 (119) (364) ----- ----- ----- Loss after income tax benefit/(expense) for the period (343) (616) (197) Other comprehensive income Items that may be reclassified subsequently to profit or loss Net change in the fair value of cash flow hedges taken to equity, net of tax 927 (684) (1,068) Foreign currency translation (1,352) 4 (2,161) ------- ----- ------- Other comprehensive income for the period, net of tax (425) (680) (3,229) ----- ----- ------- Total comprehensive income for the period (768) (1,296) (3,426) ===== ======= ======= Loss for the period is attributable to: Non-controlling interest - - (20) Owners of MySale Group Plc (343) (616) (177) ----- ----- ----- (343) (616) (197) ===== ===== ===== Total comprehensive income for the period is attributable to: Non-controlling interest - - (20) Owners of MySale Group Plc (768) (1,296) (3,406) (768) (1,296) (3,426) ===== ======= ======= Cents Cents Cents Basic earnings per share 14 (0.23) (0.41) (0.12) Diluted earnings per share 14 (0.23) (0.41) (0.12)
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 2016 Reviewed Audited Unaudited six months ended six months ended year ended 30 June 31 December 2016 31 December 2015 2016 A$'000 A$'000 A$'000 Assets Current assets Cash and cash equivalents 6 37,825 29,978 34,005 Trade and other receivables 8,759 22,180 9,058 Inventories 32,249 35,145 35,473 Other 5,859 8,162 7,973 Total current assets 84,692 95,465 86,509 -------------------------- ------------------ -------------------- Non-current assets Investments in joint venture - 91 - Property, plant and equipment 7 2,184 2,466 2,226 Intangibles 8 30,540 23,468 29,765 Deferred tax 9 10,879 10,986 10,295 Total non-current assets 43,603 37,011 42,286 -------------------------- ------------------ -------------------- Total assets 128,295 132,476 128,795 -------------------------- ------------------ -------------------- Liabilities Current liabilities Trade and other payables 29,068 29,991 29,548 Borrowings 10 8,677 6,590 6,476 Derivative financial instruments 120 662 1,047 Income tax payable 211 1,234 1,104 Provisions 1,930 1,941 2,163 Deferred revenue 11,552 13,277 11,677 Total current liabilities 51,558 53,695 52,015 ------ ------ ------ Non-current liabilities Provisions 1,093 636 368 Total non-current liabilities 1,093 636 368 ------ ------ ------ Total liabilities 52,651 54,331 52,383 ------ ------ ------ Net assets 75,644 78,145 76,412 ====== ====== ====== Equity
Share premium account 306,363 306,363 306,363 Other reserves (126,188) (123,611) (125,763) Accumulated losses (104,511) (104,607) (104,168) Equity attributable to the owners of MySale Group Plc 75,664 78,145 76,432 Non-controlling interest (20) - (20) Total equity 75,644 78,145 76,412 ========= ========= ========= The interim financial statements of MySale Group Plc (company number 115584) were approved by the Board of Directors and authorised for issue on 28 February 2017. They were signed on its behalf by: __________________________ ___________________________ Carl Jackson Andrew Dingle Director Director The above balance sheets should be read in conjunction with the accompanying notes MySale Group Plc Statements of changes in equity For the period ended 31 December 2016 Share premium Other Accumulated Non-controlling Total account reserves losses interest equity A$'000 A$'000 A$'000 A$'000 A$'000 Balance at 1 July 2015 306,363 (122,931) (103,991) - 79,441 Loss after income tax benefit/(expense) for the period - - (616) - (616) Other comprehensive income for the period, net of tax - (680) - - (680) Total comprehensive income for the period - (680) (616) - (1,296) Balance at 31 December 2015 306,363 (123,611) (104,607) - 78,145 ======= ========= =========== =============== ======= Share premium Other Accumulated Non-controlling Total account reserves losses interest equity A$'000 A$'000 A$'000 A$'000 A$'000 Balance at 1 July 2016 306,363 (125,763) (104,168) (20) 76,412 Loss after income tax benefit/(expense) for the period - - (343) - (343) Other comprehensive income for the period, net of tax - (425) - - (425) Total comprehensive income for the period - (425) (343) - (768) Balance at 31 December 2016 306,363 (126,188) (104,511) (20) 75,644 ======= ========= =========== =============== ======= Share premium Other Accumulated Non-controlling Total account reserves losses interest equity Audited year ended 30 June 2016 A$'000 A$'000 A$'000 A$'000 A$'000 Balance at 1 July 2015 306,363 (122,931) (103,991) - 79,441 Loss after income tax (expense)/benefit for the period - - (177) (20) (197) Other comprehensive income for the period, net of tax - (3,229) - - (3,229) Total comprehensive income for the period - (3,229) (177) (20) (3,426) Transactions with owners in their capacity as owners: Share-based payments - 397 - - 397 ------- --------- ----------- --------------- ------- Balance at 30 June 2016 306,363 (125,763) (104,168) (20) 76,412 ========== =========== =========== ======== ============== The above statements of changes in equity should be read in conjunction with the accompanying notes MySale Group Plc Statements of cash flows For the period ended 31 December 2016 Reviewed Unaudited six months ended six months ended Audited 31 December 2016 31 December 2015 year ended 30 June 2016 Note A$'000 A$'000 A$'000 Cash flows from operating activities Loss before income tax benefit/(expense) for the period (1,391) (497) 167 Adjustments for: Depreciation and amortisation 2,411 2,042 4,383 Net (gain)/loss on disposal of property, plant and equipment (11) (14) 30 Share of loss - joint ventures - 43 104 Interest income (60) (50) (125) Interest expense 79 22 97 -------------------------- ------------------ ------------------------- 1,028 1,546 4,656 Change in operating assets and liabilities: Decrease in trade and other receivables 299 1,494 14,167 Decrease/(increase) in inventories 3,223 (17,265) (17,593) Decrease/(increase) in other operating assets 2,119 (3,386) (3,153) (Decrease)/increase in trade and other payables (440) 762 155 Increase in other provisions 494 134 486 (Decrease)/increase in deferred revenue (125) 2,130 530 -------------------------- ------------------ ------------------------- 6,598 (14,585) (752) Interest received 60 50 125 Interest paid (79) (22) (97) Income taxes refunded - 818 832 Income taxes paid (418) - - -------------------------- ------------------ ------------------------- Net cash from/(used in) operating activities 6,161 (13,739) 108 -------------------------- ------------------ ------------------------- Cash flows from investing activities Payment for purchase of business, net of cash acquired - - (5,300) Payments for property, plant and equipment 7 (613) (225) (782) Payments for intangibles 8(2,584) (1,320) (3,248) Payments for security deposits (6) (39) - Proceeds from disposal of property, plant and equipment 47 120 153 Proceeds from disposal of intangibles - - 8 Proceeds from release of security deposits - - (120) ------- ------- ------- Net cash used in investing activities (3,156) (1,464) (9,289) ------- ------- ------- Cash flows from financing activities Proceeds from borrowings 5,931 7,812 9,089 Repayment of borrowings (3,666) (2,428) (3,775)
Repayments of leases (64) (46) (91) ------- ------- ------- Net cash from financing activities 2,201 5,338 5,223 ------- ------- ------- Net increase/(decrease) in cash and cash equivalents 5,206 (9,865) (3,958) Cash and cash equivalents at the beginning of the financial period 34,005 39,853 39,853 Effects of exchange rate changes on cash (1,386) (10) (1,890) Cash and cash equivalents at the end of the financial period 6 37,825 29,978 34,005 ======= ======= ======= The above statements of cash flows should be read in conjunction with the accompanying notes MySale Group Plc Notes to the financial statements 31 December 2016 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 rounded to the nearest thousand. The principal business of the group is the operation of online shopping outlets for consumer goods including; ladies, men and children's fashion clothing, accessories, beauty and homeware items. MySale Group Plc is a public company 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, St. Helier, JE4 9WG, Jersey and principal place of business is at Unit 5, 111 Old Pittwater Road, Brookvale, NSW 2100, Australia. The financial statements were authorised for issue, in accordance with a resolution of directors, on 27 February 2017. The directors have the power to amend and reissue the financial statements. 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 periods presented, unless otherwise stated. These financial statements for the interim half-year reporting period ended 31 December 2016 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 2016 and any public announcements made by the company during the interim reporting period. New, revised or amending Accounting Standards and Interpretations adopted The group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the International Accounting Standards Board that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the group during the financial half-year ended 31 December 2016 and are not expected to have any significant impact for the full financial year ending 30 June 2017. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. 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 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's operates separate websites in each country that it sells goods in. Revenue from external customers is attributed to each country based on the activity on that countries website. Similar types of goods are sold in all segments. The group's operations are unaffected by seasonality. Intersegment transactions Intersegment transactions were made at market rates and are eliminated on consolidation. Segment assets and liabilities Assets and liabilities are managed on a group basis. The CODM does not regularly review any asset or liability information by segment and, accordingly there is no separate segment information. Refer to the consolidated balance sheet for group assets and liabilities. Operating segment information Australia Rest of and South-East the New Zealand Asia world Total Unaudited six months ended 31 December 2016 A$'000 A$'000 A$'000 A$'000 Revenue Sales to external customers 112,332 17,378 6,972 136,682 Total revenue 112,332 17,378 6,972 136,682 ----------- ---------- ------- -------- Gross profit 32,835 4,487 1,105 38,427 ----------- ---------- ------- Other operating loss, net (1,304) Selling and distribution expenses (23,098) Administration expenses (15,397) Finance income 60 Finance costs (79) Loss before income tax benefit (1,391) Income tax benefit 1,048 -------- Loss after income tax benefit (343) -------- Australia Rest of and South-East the New Zealand Asia world Total Reviewed six months ended 31 December 2015 A$'000 A$'000 A$'000 A$'000 Revenue Sales to external customers 109,482 15,457 3,291 128,230 Total revenue 109,482 15,457 3,291 128,230 ----------- ---------- ------- -------- Gross profit 27,907 3,852 968 32,727 ----------- ---------- ------- Other operating gains, net 971 Selling and distribution expenses (19,249) Administration expenses (14,931) Finance income 50 Finance costs (22) Share of loss of joint venture accounted for using the equity method (43) Loss before income tax expense (497) Income tax expense (119) -------- Loss after income tax expense (616) -------- Australia Rest of and South-East the New Zealand Asia world Total Audited year ended 30 June 2016 A$'000 A$'000 A$'000 A$'000 Revenue Sales to external customers 210,710 31,590 9,989 252,289 Total revenue 210,710 31,590 9,989 252,289 ----------- ---------- ------- -------- Gross profit 57,060 7,546 2,050 66,656 ----------- ---------- ------- Other operating gains, net 2,173 Selling and distribution expenses (37,460) Administration expenses (31,126) Finance income, net 28 Share of loss of joint venture accounted for using the equity method (104) Profit before income tax expense 167 Income tax expense (364)
-------- Loss after income tax expense (197) -------- Note 4. EBITDA reconciliation (earnings before interest, taxation, depreciation and amortisation) Unaudited Reviewed six months six months Audited ended ended year ended 31 December 31 December 30 June 2016 2015 2016 A$'000 A$'000 A$'000 EBITDA reconciliation (Loss)/profit before income tax benefit/(expense) (1,391) (497) 167 Add: Share of loss of joint venture - 43 104 Less: Interest income (60) (50) (125) Add: Interest expense 79 22 97 Add: Depreciation and amortisation 2,413 2,042 4,383 EBITDA 1,041 1,560 4,626 Underlying EBITDA reconciliation Underlying EBITDA represents EBITDA adjusted for significant, unusual and other one-off items. EBITDA 1,041 1,560 4,626 Share-based payments expense 510 303 397 One off costs including IPO costs, acquisition expenses, one-off expenses 645 726 1,997 Reorganisation and discontinued operations 62 13 265 Unrealised FX (gain)/loss revaluation 790 (790) (1,819) Underlying EBITDA 3,048 1,812 5,466 The share based payments expense was included in this reconciliation from 30 June 2016 and therefore for consistency has also been included in the comparative figures for the six months ended 31 December 2015. Underlying EBITDA previously reported for the six months to 31 December 2015 was A$ 1,508,000. Note 5. Income tax (benefit)/expense Unaudited Reviewed six months six months Audited ended ended year ended 31 December 31 December 30 June 2016 2015 2016 A$'000 A$'000 A$'000 Income tax (benefit)/expense Current tax 282 810 759 Deferred tax - origination and reversal of temporary differences (681) (881) (413) Adjustment recognised for prior periods (649) 190 18 Aggregate income tax (benefit)/expense (1,048) 119 364 Deferred tax included in income tax (benefit)/expense comprises: Increase in deferred tax assets (note 9) (681) (881) (413) Numerical reconciliation of income tax (benefit)/expense and tax at the statutory rate (Loss)/profit before income tax benefit/(expense) (1,391) (497) 167 Tax at the statutory tax rate of 30% (417) (132) 50 Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Non-deductible expenses 35 196 218 Tax-exempt income - - (26) (382) 64 242 Adjustment recognised for prior periods (649) 190 64 Current period tax losses not recognised - 34 58 Expected changes in future tax rates - (29) - Difference in overseas tax rates (17) (140) - Income tax (benefit)/expense (1,048) 119 364 ============ ============ =========== Tax at the statutory tax rate represents the effective rate of income tax across the jurisdictions in which each of the group entities are domiciled. The tax rates of the main jurisdictions are Australia 30% (2015: 30%), Singapore 17% (2015: 17%), New Zealand 28% (2015: 28%), United Kingdom 20% (2015: 20%) and United States 43% (2015: 43%). Note 6. Current assets - cash and cash equivalents Unaudited Reviewed six months six months Audited ended ended year ended 31 December 31 December 30 June 2016 2015 2016 A$'000 A$'000 A$'000 Cash at bank 32,625 22,578 28,805 Bank deposits at call 5,200 5,200 5,200 Bank deposits - pledged - 2,200 - 37,825 29,978 34,005 ============ ============ =========== Bank deposits - pledged The pledged bank deposits were in relation to the Asset Sale Deed to acquire the trade and assets of three online consumer retail businesses from Grays eCommerce Group Limited in Australia. Note 7. Non-current assets - property, plant and equipment Unaudited Reviewed six months six months Audited ended ended year ended 31 December 31 December 30 June 2016 2015 2016 A$'000 A$'000 A$'000 Leasehold improvements - at cost 1,149 996 993 Less: Accumulated depreciation (868) (668) (784) 281 328 209 Plant and equipment - at cost 4,613 4,779 4,535 Less: Accumulated depreciation (3,440) (3,041) (3,068) 1,173 1,738 1,467 Fixtures and fittings - at cost 1,248 859 1,025 Less: Accumulated depreciation (616) (533) (528) 632 326 497 Motor vehicles - at cost 357 409 391 Less: Accumulated depreciation (259) (335) (338) 98 74 53 2,184 2,466 2,226 ============ ============ =========== Leasehold Plant and Fixtures Motor improvements equipment and fittings vehicles Total A$'000 A$'000 A$'000 A$'000 A$'000 Balance at 1 July 2016 209 1,467 497 53 2,226 Additions 178 142 246 82 648 Disposals (8) (5) (13) (25) (51) Exchange differences (3) (38) (7) - (48) Depreciation (95) (393) (91) (12) (591) Balance at 31 December 2016 281 1,173 632 98 2,184 ============ ========= ============ ======== ====== Note 8. Non-current assets - intangibles Unaudited Reviewed six months six months Audited ended ended year ended 31 December 31 December 30 June 2016 2015 2016 A$'000 A$'000 A$'000 Goodwill - at cost 21,504 16,849 21,504 Customer relationships - at cost 3,407 2,274 3,512 Less: Accumulated amortisation (2,030) (1,136) (1,536) 1,377 1,138 1,976 Software - at cost 9,206 5,536 6,986 Less: Accumulated amortisation (3,899) (2,328) (3,070) 5,307 3,208 3,916 ERP system 4,326 3,460 3,923 Less: Accumulated amortisation (1,974) (1,187) (1,554) 2,352 2,273 2,369 30,540 23,468 29,765 ============ ============ =========== Customer ERP Goodwill relationships Software system Total
A$'000 A$'000 A$'000 A$'000 A$'000 Balance at 1 July 2016 21,504 1,976 3,916 2,369 29,765 Additions - - 2,219 397 2,616 Disposals - - (3) - (3) Exchange differences - (31) 8 5 (18) Amortisation - (568) (833) (419) (1,820) Balance at 31 December 2016 21,504 1,377 5,307 2,352 30,540 ======== ============= ======== ====== ======= Note 9. Non-current assets - deferred tax Unaudited Reviewed six months six months Audited ended ended year ended 31 December 31 December 30 June 2016 2015 2016 A$'000 A$'000 A$'000 Deferred tax asset comprises temporary differences attributable to: Amounts recognised in profit or loss: Tax losses 9,073 8,743 9,324 Accrued expenses 560 1,277 701 Provisions 782 604 847 Sundry 1,118 1,324 269 Property, plant and equipment (171) (757) (253) Intangibles (483) (205) (593) Deferred tax asset 10,879 10,986 10,295 Movements: Opening balance 10,295 10,320 10,320 Credited to profit or loss (note 5) 681 881 413 Additions through business combinations - - (360) Exchange loss (97) (215) (78) Closing balance 10,879 10,986 10,295 ============ ============ =========== Deferred income tax assets are recognised for tax losses, non-deductible accruals and provisions and capital allowances carried forward to the extent that realisation of the related tax benefits through future taxable profits is probable. Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss. Note 10. Current liabilities - borrowings Unaudited Reviewed six months six months Audited ended ended year ended 31 December 31 December 30 June 2016 2015 2016 A$'000 A$'000 A$'000 Bank loans 5,200 5,200 5,200 Bank loans under interchangeable facilities 3,477 1,281 1,212 Finance lease liability - 109 64 8,677 6,590 6,476 ============ ============ =========== The group has a A$12,233,000 (30 June 2016: A$12,233,000 and at 31 December 2015: A$12,233,000) borrowing facility with Australia and New Zealand Banking Group Limited ('ANZ') which is secured by a Corporate Guarantee and Indemnity. The group is required to comply with the following covenants in relation to this facility: -- EBITDA and sales must not be less then amounts agreed with ANZ, being 90% of budgeted EBITDA and sales on a half-yearly basis. The group is in compliance with the covenant; -- Current ratio being the ratio of total current assets over total current liabilities must exceed 1.5:1 at all times. The group is in compliance with the covenant and its strategy is to maintain the current ratio above the 1.5:1 requirement; and -- Distributions to shareholders must not be made without the written consent of ANZ. The group is in compliance with the covenant as of the reporting date and at the date these financial statements were authorised for issue. The group has a GBP GBP3,000,000 (30 June 2016: GBP GBP3,000,000 and at 31 December 2015: GBP GBP3,000,000) borrowing facility with Hong Kong and Shanghai Banking Corporation Plc ('HSBC') which is secured by a Corporate Guarantee. Assets pledged as security All bank borrowings of the group are secured by a Corporate Guarantee and Indemnity. Average interest rate incurred on these bank borrowings was 1.9% (30 June 2016: 2.0% and at 31 December 2015: 2.2%). The lease liabilities are effectively secured as the rights to the leased assets, recognised in the balance sheet, revert to the lessor in the event of default. Note 11. Fair value measurement Fair value hierarchy The following tables detail the group's assets and liabilities, measured or disclosed at fair value, using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs) Level 1 Level 2 Level 3 Total Unaudited six months ended 31 December 2016 A$'000 A$'000 A$'000 A$'000 Liabilities Derivative financial instruments - 120 - 120 Total liabilities - 120 - 120 ------- ------- ------- ------ Level 1 Level 2 Level 3 Total Reviewed six months ended 31 December 2015 A$'000 A$'000 A$'000 A$'000 Liabilities Derivative financial instruments - 662 - 662 Total liabilities - 662 - 662 ------- ------- ------- ------ Level 1 Level 2 Level 3 Total Audited year ended 30 June 2016 A$'000 A$'000 A$'000 A$'000 Liabilities Derivative financial instruments - 1,047 - 1,047 Total liabilities - 1,047 - 1,047 ------- ------- ------- ------ There were no transfers between levels during the period. The carrying values of other financial assets and financial liabilities presented in these financial statements represent a reasonable approximation of fair value. Note 12. Contingent liabilities The group issued a bank guarantee through its banker, ANZ, in respect of lease obligations amounting to A$979,000 (30 June 2016: A$874,000 and 31 December 2015: A$874,000). As 31 December 2016, the group no longer had a bank guarantee through ANZ in respect of a merchant facility deposit (30 June 2016: USD$ Nil and 31 December 2015: USD$2,100,000). The group also issued a bank guarantee through its banker ANZ, in respect of customs and duties obligations amounting to NZ$150,000 (30 June 2016: NZ$150,000 and 31 December 2015: NZ$150,000). The group also issued bank guarantees through its banker, HSBC, in respect of retail lease agreements in New Zealand, amounting to NZ$69,000 (30 June 2016: A$Nil and 31 December 2015: A$Nil). Note 13. Related party transactions Parent entity MySale Group Plc is the parent company of the group. Transactions with related parties The following transactions occurred with related parties: Unaudited Reviewed six months six months Audited ended ended year ended 31 December 31 December 30 June 2016 2015 2016 A$000 A$000 A$000 Sale of goods and services: Sale of goods to other related party 897 15,263 22,521 Sale of freight services to other related party 324 270 1,028 Payment for goods and services: Purchase of goods from other related party 161 60 685 Receivable from and payable to related parties The following balances are outstanding at the reporting date in relation to transactions with related parties: Unaudited Reviewed six months six months Audited ended ended year ended 31 December 31 December 30 June 2016 2015 2016 A$000 A$000 A$000 Current receivables:
Trade receivables from other related party - 11,415 1,784 Current payables: Trade payables to other related party 292 159 224 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. Note 14. Earnings per share Reviewed Unaudited six months six months ended Audited ended 31 year ended 31 December December 30 June 2016 2015 2016 A$000 A$000 A$000 Loss after income tax (343) (616) (197) Non-controlling interest - - 20 ----------- ---------- ------------- Loss after income tax attributable to the owners of MySale Group Plc (343) (616) (177) =========== ========== ============= Number Number Number Weighted average number of ordinary shares used in calculating basic earnings per share 150,647,610 150,647,610 150,647,610 Weighted average number of ordinary shares used in calculating diluted earnings per share 150,647,610 150,647,610 150,647,610 =========== ============== ================= Cents Cents Cents Basic earnings per share (0.23) (0.41) (0.12) Diluted earnings per share (0.23) (0.41) (0.12) Comment at 31 December 2016 9,350,287 employee long term incentives have been excluded from the diluted earnings calculation as they are anti-dilutive for the period. Comment at 30 June 2016 5,539,326 employee long term incentives have been excluded from the diluted earnings calculation as they are anti-dilutive for the year. Comment at 31 December 2015 111,499 employee long term incentives have been excluded from the diluted earnings calculation as they are anti-dilutive for the period. Note 15. Events after the reporting period On 30 January 2017, the company issued 3,000,000 ordinary shares to MySale Group Trustee Limited, in its capacity as the trustee of the MySale Group Plc Employee Benefit Trust ('EBT'). This issue is in accordance with the terms of the Company's Joint Share Ownership Plan (the "Plan") ("JSOP Shares") which provides long-term performance-related incentives to employees and to assist with the retention of key employees. No other matter or circumstance has arisen since 31 December 2016 that has significantly affected, or may significantly affect the group's operations, the results of those operations, or the group's state of affairs in future financial years.
This information is provided by RNS
The company news service from the London Stock Exchange
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March 01, 2017 02:01 ET (07:01 GMT)
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