(Alliance News) - MySale Group PLC on Monday put itself up for sale, as part of a strategic review spurred by a challenging Australian retail market.
Shares in MySale were down 43% at 3.80 pence in morning trade, giving the company a market capitalisation of just GBP5.9 million. Upon listing in London in 2014, the online retailer had a share price of 226p and a GBP340 million market cap.
MySale said its strategic review will assess "all types of corporate activity", such as reducing debt, raising further capital and de-listing from AIM. Among these, MySale is considering selling all or part of the company.
Any discussions for a takeover will occur under a formal sale process, and MySale is now in an offer period, it said. It has not yet entered any discussions for a possible offer.
MySale's largest market is Australia, where it "has continued to experience challenging trading conditions" due to new regulations introduced in July 2018, as well as its inventory location, cost base, and product mix.
The company's financial 2019 results for its year to June 30 will include a AUD2.0 million one-off accounting charge relating to an unrecoverable asset. However, due to restructuring and cost savings, its underlying operating expenses will fall to just AUD35 million from AUD74 million in financial 2018.
As a result of its Australian troubles, MySale's revenue, gross margin, and gross profit have all suffered. MySale said it does have an action plan, which prioritises Australia and New Zealand and is forecast to cut costs and improve the firm's financial 2020 business performance. MySale is expected to become cash generative in its financial 2020 year, with an improved profit.
In light of this, MySale is closing its UK and US operations and has disposed of its UK website. It is also "streamlining its supply chain" to Australia and New Zealand from south east Asia.
As at May 31, MySale's net debt stood at AUD15.4 million, with available loan facilities of AUD19.7 million in total. However, given its recent difficulties, the firm expects it might need more funding at short notice.