5 Mar 2018 07:00
5 March 2018
Half Year Results for the six months ended 31 December 2017
Record H1 sales and profitability combined with strong strategic progress
MySale Group plc (AIM: MYSL) (''the Group''), the leading international online retailer, today announces its unaudited interim results for the six months to 31 December 2017 (H1 FY18).
Financial Highlights
Six months to 31 December (A$ million) | H1 FY18 |
| H1 FY17 |
| Change | |
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Revenue | 151.9 |
| 136.7 |
| +11% | |
Gross Profit | 45.6 |
| 38.4 |
| +19% | |
Gross Margin | 30.1% |
| 28.1% |
| +200 bp | |
Underlying1 EBITDA | 5.5 |
| 3.0 |
| +80% | |
Underlying profit before tax | 2.3 |
| 0.6 |
| +266% | |
Reported loss before tax | (0.1) |
| (1.3) |
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Underlying basic earnings per share (cents) | 2.0 |
| 1.1 |
| +82% | |
Financial Highlights
· Underlying EBITDA1 grew 80% to a record A$5.5 million (H1 FY17: A$3.0 million)
· Gross Profit increased 19% to c. A$45.6 million (H1 FY17: A$38.4 million)
· Gross Margin increased 200 bps to 30.1% (H1 FY17: 28.1%)
· Revenue increased 11% to c. A$151.9 million (H1 FY17: A$136.7 million
Technology highlights
· Accelerated investment into our data-driven proprietary technology platform
· Merchandising & planning updates now delivering sales, margin and operational benefits
· Increasing uptake of Ourpay proprietary 'buy-now, pay-later' payments system by customers
· Launch of Ourpay Select, subscription delivery service, enhancing customer proposition
· Mobile activity continues to grow and represented 60% of orders
· Cumulative app downloads have reached 7.5 million
Operational highlights
· Active customer base increase of 12% to 1.0 million
· Continued focus on activating customers with higher lifetime-value
o Average order value stable at A$87
o Steady average order frequency per customer of 3.3x
· Strategic plan to increase own-buy inventory continues to 20% of online revenue
· Further brand partnerships result in over 700,000 SKUs2 online
· Endless Aisle now accounts for c. 10% of online revenue
· Identity Direct initial phase integration completed
· Product returns rate remains at industry-leading level of just 5%
[1] Underlying EBITDA: earnings before interest, taxation, depreciation and amortisation and before non-recurring and certain non-cash items
2 Stock Keeping Units
Carl Jackson, Chief Executive Officer, commented:
"We are very pleased to be reporting a record first half performance with growth in underlying EBITDA of 80 percent underpinned by double digit online revenue growth and improved gross margins, our sixth consecutive half of gross margin gains. This strong performance has been driven by our technology platform, which continues to enhance both our customer offer and relationships with our global brand partners.
Our growth strategy remains focused on harnessing our proprietary platform to scale up our proposition globally. We have made significant progress over the half, particularly in increasing our product range whilst further developing our proprietary financial services and subscription delivery propositions, Ourpay and Ourpay Select.
It has been a great start to the new financial year and we approach the second half with confidence, with an exciting range of strategic opportunities ahead."
Enquiries:
MySale Group plc |
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Carl Jackson, Chief Executive Officer | +61 (0) 414 817 843 |
Graeme Burns, Corporate Development Director | +44 (0) 777 585 4516 |
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Zeus Capital Limited (Nominated Adviser & Joint Broker) | +44 (0) 20 3829 5000 |
Giles Balleny, Corporate Finance Benjamin Robertson, Corporate Broking |
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N+1 Singer (Joint Broker) | +44 (0) 20 7496 3000 |
Mark Taylor |
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MHP Communications (Financial PR Adviser) | +44 (0) 20 3128 8570 |
Simon Hockridge Giles Robinson Peter Lambie |
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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 provides a marketplace solution to brands offering both retail and flash-sale website channels. The 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 New Zealand 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 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 and Identity Direct in Australia and New Zealand.
Chairman's statement
Following MySale's strong performance during the last financial year we are pleased to report that this momentum has continued into the new financial year, with the Group reporting record results for the first half and significant progress on our growth strategy.
During the period, we have delivered a significant uplift in the Group's underlying profitability, underpinned by solid revenue growth, improved gross margins and a continued focus on control of operating costs, led in large part by step change improvements in our proprietary technology platform.
Thanks to our continued investment in technology, we have seen further progress in our marketplace platform, our in-house payments solution, Ourpay, as well as improvements in business efficiency through increased marketing automation.
The development of Ourpay merits further mention. Having seen the success of other deferred payment products, but unable to make their charging structures work for our business, our technology team set to work producing our own in-house solution. In less than three months we were able to launch a beta product and now, around a year later, Ourpay is a fully functioning solution producing material uplifts in our conversion rate and basket size with those customers using it. We are now able to consider options to strengthen this product further to grow penetration within our own business and also potentially to operate as a solution to third party retailers. For a relatively small capital outlay, we have created a business of substantial value to MySale shareholders. This is a live example of the hidden value of owning and developing our own technology platform which gives nimble solutions at lower cost versus using a third-party solution.
Looking forward, there is much more for us to do and we have much bigger ambitions for the business, but at this stage our plans are very much on track. The acquisitions we have completed in the last two years (most recently Identity Direct) demonstrate that strategic M&A can add real value to the Group and that we have a solid platform upon which we can bolt new business offerings. We continue to view this as a key part of our growth strategy going forward and the economics are compelling.
Finally, I would like to take the opportunity to thank our teams for their continued efforts in driving MySale forward. The hard work behind the scenes is often overlooked, but we are very conscious of the debt of gratitude we owe to everyone in our business.
_____________________________
Iain McDonald
Chairman
5 March 2018
Review of operations by the Chief Executive Officer
MySale has made excellent progress in the six months to 31 December 2017. Our continued focus on the Group's strategic plan has delivered a record first half performance and positioned the Group for further profitable growth.
Total active customer numbers grew by 12% to 1.0 million (H1 FY17: 870,000), with a stable average order value (AOV) of A$87 (H1 FY17: A$86). The rollout of new features on the Group's technology platform combined with new and existing international and local strategic partnerships has continued to increase the product range, the majority on a low risk third-party basis.
For the sixth consecutive half year period, gross margins increased. During the period, the Group's gross margin saw a 200bp improvement to 30.1% (H1 FY17: 28.1%), contributing a 19% uplift in gross profit to A$45.7 million (H1 FY17: A$38.4 million). The Group's sourcing initiatives, including its increased own-buy inventory, are drivers of the continuing increase in margin.
The Group's proprietary 'buy-now, pay-later' solution, Ourpay, is now used for 17% of orders and has improved average order value and conversion rates with those customers. We are exploring how we might further commercialise this product by working with third party retailers.
MySale's strong first half performance means underlying EBITDA was significantly higher, by 80%, than the prior year at A$5.5 million (H1 FY17: A$3.0 million).
Revenue and Margin by segment | |||||||||
| H1 FY18 | H1 FY17 | Growth vs PY | ||||||
A$ million | Revenue | Gross profit | GP% | Revenue | Gross Profit | GP% | Revenue | Gross profit | GP Bp |
Group | 151.9 | 45.6 | 30.1% | 136.7 | 38.4 | 28.1% | +11% | +19% | +200 |
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ANZ | 125.8 | 38.9 | 30.9% | 112.3 | 32.8 | 29.2% | +12% | +18% | +169 |
S-E Asia | 17.5 | 4.6 | 26.4% | 17.4 | 4.5 | 25.8% | +1% | +3% | +57 |
ROW | 8.6 | 2.1 | 24.5% | 7.0 | 1.1 | 15.8% | +24% | +92% | +869 |
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This improved trading performance is driven primarily by the Group's clear strategic plan to prioritise the growth of gross profit and secure higher lifetime-value customers. Key elements of this plan include localised merchandising and pricing, an increased proportion of own-buy (1P) inventory and reduced delivery promotions. This strategic plan was established 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. Since then, the Group has achieved six consecutive half years of profitable growth.
During the period, and across all territories, the Group continued to dedicate its marketing resources and spend, which was circa 8% of revenue, almost exclusively into measurable, digital channels to attract and engage both new and existing customers. Our ongoing communication programme has seen those loyal and engaged customers continue to spend with reliable frequency (averaging 3.3x) and with stable purchasing metrics.
Technology Development
During the period the Group continued the investment into its proprietary technology platform to enhance its capabilities. Following the release of a new and enhanced version of the platform towards the end of the last financial year, it has been rolled out across all territories and many operational activities during this period. The new platform's functionality supports the Group's aims of enhancing customer experience, increasing revenue opportunities and driving efficiency.
The marketplace enabled platform allows for fuller integration across all the Group's sales channels. All websites, other than the recently acquired Identity Direct, have already migrated to this platform. The Group now has a single, live view of global inventory and both 1P (owned) and 3P (consignment or drop-ship) products can be sold by any of the websites simultaneously. Similarly, the platform allows a single live view of each customer and their individual journeys, allowing the Group to better serve customer preferences across all websites and mobile device apps. As always, mobile buyers remain at the heart of the Group's technology platform and this channel accounted for 60% of orders received in the period, supported by cumulative app downloads of 7.5 million as at 31 December 2017.
The platform also facilitates the Group's marketplace offer and allows the integration of all websites directly with brands and retailers, whether that be as part of supporting a partner's inventory clearance or providing a brand with a new retail channel. It also has created the Group's Endless Aisle offer which allows easy, continuous access to products by customers.
A key element of MySale's technology development has been to enhance the Group's data capabilities for better collection and analysis, improved machine learning and automation which in turn is driving improved customer experiences, increased revenue and more efficiency. The platform allows for campaigns to be launched faster and more efficiently as well as providing seamless user interaction across all devices. Meanwhile, the platform's new automated update process, has delivered a record number of updates over the period. These developments provide a step change in capability which will support further growth.
The Group has also continued to use its technology innovation for tactical improvements to the customer proposition to drive revenue, one example being the development of Ourpay, our 'buy-now, pay-later' programme. This instalment payment option helps customers manage their finances and has been shown to increase both the spend and order frequency of those customers accepted to the programme. This payment solution was developed in-house to deliver a more flexible, cost-efficient and integrated system, which is better suited to the Group's requirements than that provided by third parties. The system automates all aspects of the programme including credit scoring and monitoring; an aspect of the programme where the Group has adopted a conservative policy. The debtor balance associated with Ourpay was A$3.3 million at the period end and is anticipated to grow as transaction volumes increase.
The initial implementation of Ourpay has been very positive. Customers' average spend and frequency of purchase increased for those using Ourpay and it has now been rolled out to all territories and websites where legislation currently allows. In addition, during this period, the Group launched Ourpay Select, a new subscription-delivery model that further enhances the customer proposition and is fully integrated to the Ourpay platform. Again, the initial experience of this development's influence on customer engagement has been encouraging.
The Group's technology platform allows all websites and suppliers to operate on the same platform which provides numerous advantages including: better sharing of data; more efficient use of resources; greater visibility of inventory; and reduced buying administration. This has allowed the Group to substantially increase the range of products available via our websites, particularly 3P inventory, whilst minimising variable costs.
Brands and Strategic Partnerships
The Group has established strategic partnerships with leading retailers including gilt.com, a US based online retailer which is part of The Hudson's Bay Company, and Sports Direct Group the international sporting and apparel retailer.
These strategic partnerships have already provided significant additional product choice to customers across all of MySale's international territories and average online SKU availability now exceeds 700,000. We continue to pursue additional strategic partnerships that will add further value to our proposition as this even wider product selection to customers supports our continued revenue growth initiatives.
Forging partnerships with flagship retail brands such as Gilt.com and Sports Direct is a strong endorsement of the Group's proven capabilities in supporting brands in both establishing new sales channels as well as inventory management solutions.
The retail landscape is undergoing significant structural change and increasingly large brands recognise the benefits that more integrated inventory partnerships can bring to their operations. The Group's well established international network, flexible and scalable technology platform and resources in key territories means it is an ideal partner for international brands and retailers. Our platform allows us to customise our integration with any brand thus delivering a tailored solution to their requirements.
Operations
The strategy to increase the proportion of inventory that is purchased outright as 'own-buy' (1P), rather than on a consignment basis (3P) continued and during this period 1P goods increased to 20% of online revenue, consistent with that strategy. Whilst the vast majority of goods sold are still done so on a consignment or drop-ship basis, the 1P strategy supports deeper relationships with brand partners, slightly higher gross margins and wider product selection for customers. 1P activity is focused on staple, branded goods.
The combination of the Group's high-quality sourcing, compelling consumer value, product selection and reliable service means that product returns remain at industry-leading levels of just 5% overall.
Identity Direct
The Group acquired the business of Identity Direct, in ANZ, during the fourth quarter of the last financial year. Identity Direct is a retailer of personalised products with strong licensing relationships, particularly with entertainment brands, such as Disney and Marvel. The long term commercial opportunity in this complementary vertical is very attractive and generates high gross margin, in excess of 60%. The products are strong in children's and sports categories, which fits well with the existing MySale customer base. There are also opportunities to leverage efficiencies by deploying the Group's scale and platform and also growing revenue with enhanced marketing and cross selling between the two customer bases. The Group believes that the development of its product licensing capability will lead to opportunities to generate incremental revenue in the medium term.
The initial phase of the integration of the Identity Direct business was completed during the period under review and its performance has been in line with the Board's expectations. This is the second integration to our platform undertaken in the last few years and the positive results give the Group confidence it can successfully execute further, larger integrations in the future.
Australia & New Zealand (ANZ)
The Group is one of the pre-eminent online, off-price retailers in ANZ and continues to successfully implement its strategy, delivering an excellent increase in gross profit, up by 19% to A$38.9 million (H1 FY17: A$32.8 million) with gross margin up by 169bps to 30.9% (H1 FY17: 29.2%) whilst also growing revenue by 12% to A$125.8 million (H1 FY17: A$112.3 million). The Group continues to focus on providing a localised offer, with strong merchandising, wide product selection and compelling pricing, to its ANZ customers.
As this is by some way the Group's largest operation, we regularly review initiatives to expand further the breadth and depth of our online and offline sales channels in this region in order to fully leverage our customer base, physical resource, buying power and expertise.
South-East Asia
During the period the territory of South-East Asia delivered revenue growth of 1% to A$17.5 million (H1 FY17: A$17.4 million) and a corresponding 3% increase in gross profit to A$4.6 million (H1 FY17: A$4.5 million).
Having seen strong gross profit and gross margin growth in the prior year this period has been one of consolidation. The Group launched its existing partnership with Sports Direct in this region at the end of the period and has a number of further strategic partnerships in development which shall support this territory's future growth.
Rest of World
This territory comprises the Group's operations within the United Kingdom, which trade predominately under the Cocosa brand which in turn is focussed on providing customers with compelling value in premium branded products.
The United Kingdom had a good first half, as revenue increased by more than 24% A$8.6 million (H1 FY17: A$7.0 million), but more importantly gross profit increased by over 90% to A$2.1 million (H1 FY17: A$1.1 million) as this operation achieved the step change in gross margin anticipated by its strategic plan. As the territory moved from the start-up phase it has been able to lift margins nearer to those of the Group's more established territories.
The Group has a material presence in the UK as it is an important centre for the Group's product sourcing team for both UK and European brands. Brands from these territories, along with those from the USA, have grown their weighting within Group revenues over the past few years and now account for over half of MySale's worldwide revenue.
Outlook
Following a record first half the Board is confident in the Group's strategic progress and notwithstanding continued investment into customer acquisition, technology and service, anticipates that underlying EBITDA for the year will be at least at the top end of market expectations.
_____________________________
Carl Jackson
Chief Executive Officer
5 March 2018
Financial review by the Chief Financial Officer
Revenue and Gross Profit
For the six months ended 31 December 2017, Group revenue increased by 11% to A$151.9 million (H1 FY17: A$136.7 million) and gross profit increased faster, by 19%, to reach A$45.6 million (H1 FY17: A$38.4 million). This improved performance came as a direct result of the strategic plan implemented by the Group in 2015.
On a constant currency basis, the growth rates of revenue and gross profit were marginally higher, at 12% and 20% respectively, during the period.
Operating Expenses
The increased activity and 19% increase in gross profit led underlying operating expenses to increase 13.6% to A$40.2 million (H1 FY17: A$35.4 million) in the period. To support further growth and ensure that the Group delivers outstanding service to its customers, we increased staff resources in a number of operational departments during the first half. As in prior years, the Group's marketing spend is weighted to the first half of the financial year.
Profit/Loss before Tax
The underlying profit before tax for the period is A$2.3 million (H1 FY17: A$0.6 million) and the reported loss before tax for the period is A$0.1 million (H1 FY17: A$1.3 million). The reported loss is after the inclusion of a number of one-off and non-cash items. These items are excluded in calculating underlying profit before tax in order to provide greater insight as to the underlying profitability of the Group. A reconciliation of these items is shown in more detail in note 4 to the financial statements
Profit/Loss after Tax and earnings per share
The underlying profit after tax for the period is A$3.0 million (H1 FY17: A$1.7 million) and the reported profit after tax for the period is $A0.6 million (H1 FY17: A$0.3 million loss). This reported profit 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.
Note 14 shows the detailed calculations of basic earnings per share for the period which increased by 82% to 2.0 cents per share (H1 FY17: 1.1 cents) on an underlying basis and was 0.4 cents (H1 FY17: 0.2 cents) on a reported basis.
Taxation
The Group has recorded a tax benefit of A$0.7 million for the period (H1 FY17: A$1.0 million) which diverges from the Group's long-term guidance of an effective tax rate of approximately 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$32.8 million (H1 FY17: A$31.0 million) with the majority located in Australia. The entire tax loss has been recognised with the provision of a deferred tax asset of A$11.1 million (H1 FY17: A$10.9 million).
Balance Sheet, Net Cash and Working Capital
The Group's closing net cash balance at 31 December 2017 was A$8.3 million slightly down versus A$8.9 million at the beginning of the period (H1 FY17: A$29.1 million).
The closing net cash balance reflects a number of significant working capital outflows which occurred at the end of the first half which are of a short and medium term nature and it is anticipated shall reverse in the next 12 months. The Group's strategic plan provides for selective investment into inventory and other working capital deployments to ensure the Group is able to take advantage of commercially beneficial opportunities. In December 2017 a number of significant inventory opportunities arose and therefore the net cash balance is lower than it would otherwise have been.
Capital expenditure increased, as planned, as the Group invested principally in the development of its proprietary technology platform together with expenditure related to property and equipment upgrades. Total capital expenditure was A$4.3 million (H1 FY17: A$3.2 million).
Banking Facilities
The Group has significant cash balances, held principally with HSBC with whom the Group currently has trade finance multi option debt facilities of A$23.5 million. In addition, the Group has finance facilities of A$0.2 million with ANZ Bank. All facilities are renewed on an annual basis.
Underlying Basis
As noted above, 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 and outlined below.
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) and underlying EBITDA.
_____________________________
Andrew Dingle
Chief Financial Officer
5 March 2018
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| Basic earnings per share | 14 | 0.41 |
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| Diluted earnings per share | 14 | 0.41 |
| (0.23) | (0.65) |
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The above statements of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
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The above balance sheets should be read in conjunction with the accompanying notes
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The interim financial statements of MySale Group Plc (company number 115584) were approved by the Board of Directors and authorised for issue on 5 March 2018. They were signed on its behalf by:
__________________________ ___________________________ Carl Jackson Andrew Dingle Director Director
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The above statements of changes in equity should be read in conjunction with the accompanying notes
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The above statements of cash flows should be read in conjunction with the accompanying notes
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, 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, St. Helier, JE4 9WG, Jersey and principal place of business is at Level 3, 120 Old Pittwater Road, Brookvale, NSW 2100, Australia.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 5 March 2018. The directors have the power to amend and reissue the financial statements.
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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 2017 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 2017 and any public announcements made by the company during the interim reporting period.
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. 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 2017 and are not expected to have any significant impact for the full financial year ending 30 June 2018.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
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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.
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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.
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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.
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Intersegment transactions Intersegment transactions were made at market rates and are eliminated on consolidation.
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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.
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Operating segment information
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| Australia and |
| South-East |
| Rest of the |
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|
| New Zealand |
| Asia |
| world |
| Total |
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| Audited year ended 30 June - 2017 |
| A$'000 |
| A$'000 |
| A$'000 |
| A$'000 |
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| Revenue |
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| Sales to external customers |
| 221,451 |
| 33,806 |
| 13,130 |
| 268,387 |
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| Total revenue |
| 221,451 |
| 33,806 |
| 13,130 |
| 268,387 |
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| Gross profit |
| 65,662 |
| 8,058 |
| 2,323 |
| 76,043 |
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| Other operating (loss)/gains, net |
|
|
|
|
|
|
| (1,334) |
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| Selling and distribution expenses |
|
|
|
|
|
|
| (44,040) |
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| Administration expenses |
|
|
|
|
|
|
| (32,109) |
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| Finance income |
|
|
|
|
|
|
| 105 |
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| Finance costs |
|
|
|
|
|
|
| (223) |
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| Loss before income tax benefit |
|
|
|
|
|
|
| (1,558) |
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| Income tax benefit |
|
|
|
|
|
|
| 576 |
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| Loss after income tax benefit |
|
|
|
|
|
|
| (982) |
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Note 4. EBITDA reconciliation (earnings before interest, taxation, depreciation and amortisation)
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Note 5. Income tax (benefit)
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The tax rates of the main jurisdictions are Australia 30% (2016: 30%), Singapore 17% (2016: 17%), New Zealand 28% (2016: 28%), United Kingdom 20% (2016: 20%) and United States 42.8% (2016: 42.8%).
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Note 6. Current assets - cash and cash equivalents
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Note 7. Non-current assets - property, plant and equipment
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Note 8. Non-current assets - intangibles
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Note 9. Non-current assets - deferred tax
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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.
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Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss.
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Note 10. Current liabilities - borrowings
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The group has a A$173,000 (30 June 2017: A$11,576,000 and 31 December 2016: 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 has a A$23,483,000 (30 June 2017: A$13,120,000 and 31 December 2016: GBP£3,000,000) borrowing facility with Hong Kong and Shanghai Banking Corporation Plc ('HSBC') which is secured by a Corporate Guarantee.
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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 2.4% (30 June 2017: 2.59% and at 31 December 2016: 1.9%).
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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.
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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)
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There were no transfers between levels during the financial period.
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Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying amounts of trade receivables and trade payables are assumed to approximate their fair values due to their short-term nature. The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate that is available for similar financial instruments. Also, there is no material difference between the fair value of cash and cash equivalents and the carrying amounts.
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Note 12. Contingent liabilities
The group has reduced its bank guarantees issued by ANZ Bank Limited ('ANZ'), in respect of the lease obligations amounting to A$nil (30 June 2017: A$nil and 31 December 2016: A$979,000). The group has issued a bank guarantee through ANZ Bank Limited ('ANZ'), in respect of the merchant facility obligations amounting to A$200,000 (30 June 2017: A$nil and 31 December 2016: A$nil).
The group has also reduced its bank guarantees issused by ANZ Bank New Zealand Limited, in respect of customs and duties obligations amounting to NZ$nil (30 June 2017: NZ$150,000 and 31 December 2016: NZ$150,000).
The group has issued bank guarantees through its banker, Hong Kong and Shanghai Banking Corporation ('HSBC'), in respect to: · Lease obligations NZ$155,000 (30 June 2017: NZ$69,000 and 31 December 2016: NZ$nil); · Customs and duty obligations NZ$150,000 (30 June 2017: NZ$nil and 31 December 2016: NZ$nil); and · Lease obligations A$1,235,000 (30 June 2017: A$979,000 and 31 December 2016: NZ$nil).
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Note 13. Related party transactions
Parent entity MySale Group Plc is the parent company of the group.
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Transactions with related parties The following transactions occurred with related parties:
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Receivable from and payable to related parties The following balances are outstanding at the reporting date in relation to transactions with related parties:
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Loans to/from related parties There were no loans to or from related parties at the current and previous reporting date.
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Terms and conditions All transactions were made on normal commercial terms and conditions and at market rates.
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Note 14. Earnings per share
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Comment at 31 December 2017 10,855,345 employee long term incentives have been excluded from the diluted earnings calculation as they are anti-dilutive for the period.
Comment at 30 June 2017 8,615,909 employee long term incentives have been excluded from the diluted earnings calculation as they are anti-dilutive for the year.
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.
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Note 15. Events after the reporting period
No matter or circumstance has arisen since 31 December 2017 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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