19 Jan 2016 07:00
Pre-close Trading Update
MySale Group plc (AIM: MYSL) (the Company) the leading international online retailer is pleased to provide a trading update for the six months to 31 December 2015.
Highlights
· A positive first half with underlying EBITDA of A$1.5 million; a $12.9 million improvement on last year's first half
· Strong revenue momentum; overall growth of 4% at an accelerating rate through the period
· Gross profit increased 16% driven by 250bp margin improvement
· Particular highlight the performance in South-East Asia; 8% revenue growth and significant gross margin gains.
· Good trading momentum to carry into second half
· Strong balance sheet with cash balance of A$30 million and underlying cash position of A$51.1 million, representing c 17 pence per share
The Group has made good progress in the first half of the current financial year. In the six months the Group's revenue has risen 4% to A$128.2 million with a 250bp improvement in gross margin driving a 16% uplift in gross profit.
The rate of sales and gross profit growth strengthened in Q2 versus Q1 and it is anticipated this will continue into the second half of the year driven by a clear focus on providing exceptional value for our customers supported by proven digital marketing channels and continued technology investment.
As a result of these improvements in trading performance and the previously reduced overhead base the Group will generate positive underlying EBITDA of A$1.5 million for the period, in line with expectations and in contrast to the significant losses (-A$11.4 million) incurred in the first half of last year.
All territories have seen increases in revenue and gross profit however it is in South-East Asia 1 that the Group has seen the most significant growth. Our strategy for this territory has been to firstly grow the active member base and then to build profitability. With a profitable model now established South-East Asia is a key element of our growth plan. With a substantial population, increasing disposable income, lack of off-price competition and high mobile penetration this region is well served by our strong branded sales offers and exceptional mobile capability.
The refocus on the core business instigated in early 2015 is also delivering good results in the United Kingdom where, following a refinement to our operations, we are seeing the first signs of encouraging growth and performance.
The Group expects its acquisition of the Australian Online Retail Business from Grays eCommerce Group as announced on 20th November 2015, to complete, as planned, on 31 January 2016 and will provide an exciting opportunity to almost double the active customer base in ANZ and widen the online offer.
Our cash balance closed the period at A$30.0 million; but adjusted for seasonal working capital variations underlying cash position is A$51.1 million. This reflects the Group's strategy of investing more into owned inventory rather than the consignment model. Not only does this improve gross margins, but also gives access to better stock and enables faster delivery to customers. Having said that, consignment inventory will always be an important part of the model and having increased inventory levels considerably in the last 6 months, the Group now expects further growth to be more in line with the business as a whole.
Carl Jackson, Chief Executive Officer, commented
''We have had a good start to FY16. In the first half we have seen improved trading in all our territories which is testimony to the focus and hard work of all our teams over the last 12 months.
'' We carry strong momentum into the second half of the year in all areas of our business and we have a platform which is capable of supporting a much bigger business. The fact that our South-East Asian operation is seeing such strong growth in sales and margin is clear evidence that our strategy is working in this market. South-East Asia represents a huge growth opportunity for our business. The Board is confident the Group is on track to meet its expectations for the financial year as a whole and we will continue to invest to drive growth.
1 South-East Asia: Hong Kong, Malaysia, Singapore, Philippines and Thailand
Enquiries:
MySale Group plc Carl Jackson, Chief Executive |
tel: +61 (0) 414 817 843 tel: + 44 (0) 7895 161 153
|
Graeme Burns, Corporate Development Director
| tel: +44 (0) 777 585 4516 |
Zeus Capital Limited Nick How, Corporate Finance
| tel: +44 (0) 20 3829 5000 |
Maitland Neil Bennett/Dan Yea | tel: +44 (0)20 7379 5151 |
About MySale Group
MySale is a leading international online retailer with established flash sales websites in Australia and New Zealand (ANZ), South-East Asia (SEA) and the United Kingdom, with over 800,000 active members. Founded in 2007, the Group provides members with access to outstanding products at exceptional value whilst providing a unique route for brand partners to manage excess inventory from the Southern Hemisphere. The websites host time limited flash sales in each of its three territories across ladieswear, menswear, childrenswear, health, beauty and homewares.
The Group's online sales are supported by an international network of supply chain infrastructure and technology that enables MySale to source products from around the world for sale and delivery to members.
As a result of this exceptional inventory management solution, MySale has built a unique international brand portfolio and sourcing capability and is able to source product from over 3,000 brand partners.