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Multi bagger on the way

Unloved cosmetics company Revolution Beauty (REVB:AIM) swung from pre-tax profits of £400,000 to a £10.9 million loss after a one-off stock provision during a transitional half to August 2024.

Why then, did shares in the beauty retailer rise 2% to 13.9p today (19 November)?

Well, the company highlighted encouraging progress in its underlying profitability driven by cost savings and margin gains, and there was relief as the makeup-to-skincare products purveyor assured investors full year 2025 earnings should be ‘at least in line’ with last year’s £12.6 million haul.

Backed by fast-fashion firm Boohoo (BOO:AIM) and emerging from a tough few years, Revolution Beauty’s first half revenue dipped 20% to £72 million.

This reflected the planned simplification of the product portfolio under its ‘Reigniting the Revolution’, which involves focusing on core product categories.

On the (admittedly generous) underling adjusted measure, EBITDA (earnings before interest, tax, depreciation and amortisation) jumped 18% to £3.9 million thanks to a wide-ranging cost-cutting drive.

Encouragingly, sales from the company’s core product range grew 6% in the half, with growth accelerating to 16% in the second quarter. And Revolution Beauty should soon see the benefits of significant new distribution with heavyweights including Walmart (WMT:NYSE) and Amazon (AMZN:NASDAQ), as well as Boots and DM Germany.

Walmart US will carry the full assortment of Revolution Beauty’s products in more than 1,800 stores from January 2025, while DM Germany, Germany’s leading mass beauty retailer, will sell the company’s wares in over 850 stores in January 2025.

ROSIER OUTLOOK

Revolution Beauty reiterated guidance for a decline in sales for the year to February 2025, but with a return to growth anticipated for the fourth quarter as new strategic growth initiatives take effect, growth that is expected to accelerate through full year 2026.

And thanks to strengthening gross margins and with its cost savings programme on track, underlying adjusted EBITDA is expected to be ‘at least in line’ with last year’s £12.6 million result, before a one-off stock provision against non-core product.

Richard commented on CPI in the results today see below…multi bagger this

Capita Plc

This former FTSE 100 outsourcer has had a serious fall from grace in recent years. The business had acquired too many businesses, poorly integrated them and lost operational control. This resulted in very high levels of debt, a huge pension fund deficit, accounting errors and consequently changes to the Board and executive management. After a loss of significant shareholder value, the extended period of sorting out the inherited mess has been long and frustrating for many. However, we believe the business is now emerging from that phase under the new management team. Debt has been very meaningfully reduced, the pension fund financing resolved and group materially simplified after a long disposal programme. Since purchase a further significant sale has almost wiped out net debt in the business. The company is targeting 6-8% operating margins. With a range of catalysts to improving free cash flow generation, we expect a material re-rating of the shares if financial targets are achieved, as the market capitalisation of the business finished the period at c.£320m, whilst sales are over £2.5 billion. Historic emotional baggage still appears to result in very low valuation multiples. On current market expectations, the shares were valued on an EV/Ebitda of 3.1x for their financial year 2025, at period end. The key catalyst being higher free cash flow generation.

Totally agree trenners…Richard Staveley of Rockwood v bullish and has decent position for the IT, I agree with him and this is a 5/6 bagger from here.

I ignore all the noise and the punters nicking their penny here and there, been picking up stock to add to my already decent position, patience all that is required a thing most punters don’t have or understand…

Agreed warren,,, absolute steal at this price it’s sooo oversold… I’m topping up to my already decent position

Https://news.sky.com/story/mpox-new-case-of-clade-1b-strain-detected-in-uk-13249510

First case of dangerous new mpox strain confirmed in the UK- Telegraph

It is but they're not concerned.

Always the initial response

Just nipped in , reckon this spikes on this and gain traction in coming days…

Totally agree… should be much higher just need patience…the market very good at miss pricing..be1.50 when the market gets a brain

Good…I like Paul Scott…very sensible chap

Agreed…I’m topping up again this should be 1.50 minimum…and it will be

Totally agree-good post, I think we hit 1.50 by Christmas and can see this at £5 in next 18 months with a decent dividend as well…

Big NHS announcement on the way..

Very good update expected them + 10% tbh…oh well if market doesn’t agree I’ll keep topping up as will pay out at some point… think they should be at £2

Doesn’t open ….Alison Pearson article…spot on as always

Http://digitaleditions.telegraph.co.uk/data/1840/reader/reader.html?social#!preferred/0/package/1840/pub/1840/page/52/article/NaN

Miliband absolutely clueless…

http://digitaleditions.telegraph.co.uk/data/1840/reader/reader.html?social#!preferred/0/package/1840/pub/1840/page/52/article/NaN

I’ve topped up down here-great recovery play

Bet you are!!

Totally the wrong price glad I picked some up- ridiculous reaction

Over 3.5 traded… think we push on here towards 150…I’m topping up- be rude not to…very oversold and another approach thus side of crimbo for me