LONDON (Alliance News) - MySale Group PLC shares rose in early trade on Thursday after the company said it saw sales growth accelerate in December, pushing its first-half growth higher, and said it expects its margins to turn positive in the second half as it withdraws from its weaker markets.
The online retailer said its sales grew 8% in the first half to the end of December after stronger trading in the Christmas period. The growth is ahead of the rate reported for the first five months of the year.
The company said it incurred an earnings before income, taxation, depreciation and amortisation loss in the first half, owing to one-off marketing and product investments, but said it expects its margin for the second half to be positive as those expenses are not repeated.
MySale issued a profit warning in mid-December due to the investments and a weak Australian market. But the group said Thursday it now will focus its operations on the Australia and New Zealand, South-East Asian and UK markets. In the US, where it launched during 2014, the company has closed its website for the time being after it saw member acquisition costs higher than expected.
It has also withdrawn from the South Korean market for similar reason to the US and has therefore also closed its South Korean website until further notice.
It said the closure of the two sites will cut its cost base and allow it to focus on its most attractive markets.
MySale said it expects its revenue in the second half to grow at a similar rate to the first and will continue to focus on improving the efficiency of its marketing and promotional spending.
"We had a challenging first half, brought on in part by our rapid expansion. Despite this our core business model remains sound, and we have delivered strong growth in members which will contribute to the turnaround in financial performance in the second half," said Chief Executive Carl Jackson.
"The group is well insulated with a strong cash position and its low inventory business model where the vast majority of revenue is generated on a consignment basis," Jackson added.
MySale shares were up 7.2% to 67.00 pence on Thursday morning, one of the best performers in the AIM All-Share.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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