MYSL.L Regulatory News (MYSL)

MySale Group plc - Preliminary results

(London, 15 September 2014) MySale Group plc (AIM:MYSL), a leading online retailer with established flash sales sites in Australia, New Zealand and South-East Asia and an expanding international presence in the US and UK today announces its full year results for the year ending 30 June 2014.

Financial highlights

· Group revenue up 23.3% to A$224.3m (2013: A$181.9m), in line with expectations

o Mobile represents 56% of sales (2013: 51%)

· Average revenue per active customer increased by 7.2% to A$280 per year

· Gross profit A$60.4m (2013: A$54.9m)

· Adjusted EBITDA A$6m (2013: A$7.1m) in line with expectations reflecting heavy investment in UK and US operations

· Gross margins remain robust for a business of this nature reflecting its marketplace model and very low inventory risk.

Operational Highlights

· Membership base increased from 8.3 to 12.5 million during the year

· Number of active customers increased 18.7% to 827,000

o Over 25% of new members acquired through mobile application

· Active annual customer spend increased from $A261 to A$280

· New Buying offices were opened in New York, Florence and London and a new warehouse opened in Orlando, Florida

· 22 per cent Pre-IPO investment by Shelton Capital

Post year-end achievements and Outlook

· Successful IPO on AIM in June raising net funds for international expansion of £35.2m

· New sites launched in the UK, US, Hong Kong and South Korea, gaining an initial 250,000 subscribers

· Acquisition and relaunch of premium flash sales brand Cocosa in the UK with plans to launch internationally at an advanced stage

· Australian joint venture with Sports Direct announced; Sports Direct acquires 4.8% stake

· Acquisition of 60% stake and joint venture with Scandinavia's leading flash sale site Invitetobuy.dk announced today, with plans to launch MySale across Nordic region

Commenting on the results, Jamie Jackson, Founder and Executive Vice-Chairman, said: "Following our IPO earlier this year, I am pleased to present our first set of full year results. The Group has delivered strong membership growth across all regions and continues to expand further internationally. In July we launched dedicated sites in the UK and US and are preparing the Cocosa brand for further international expansion. Today we are pleased to announce a joint venture in Denmark with Invitetobuy and plan to launch dedicated MySale sites in the Nordic region in the coming months. We are well positioned to leverage additional commercial opportunities with Arcadia Group and Sports Direct."

-Ends-

Enquiries:

About the MySale Group

The MySale Group was founded in 2007 by Jamie Jackson and now has over 13 million members and operates websites in 10 countries, employing more than 500 people. Ozsale.com.au nzsale.co.nz and singsale.com.sg were the first flash sale websites in their respective markets and are all now dominant e-commerce businesses. The MySale websites operate in Malaysia, the Philippines and Thailand with plans at an advanced stage to open in Korea, Hong Kong, US and the UK. The group hosts flash sales that run for three days in each core market across ladies wear, menswear, childrenswear, health, beauty and home wares. Only members can access sales. Membership is free.

Business review

During the financial year ended 30 June 2014, an internal reorganisation took place in preparation of the admission of the group on the Alternate Investment Market ('AIM'), a market regulated by London Stock Exchange Plc. This resulted in a newly incorporated company, MySale Group Plc (previously known as MySale Group Limited ('MySale' or the 'company'), together with its subsidiaries, the 'group'. becoming the legal parent of the group.

The commentary below is therefore based on the group's performance for the entire financial year.

Total revenue for the year ended 30 June 2014 was A$224.4 million. This was in line with internal forecasts and represents an increase of 23.3% on the prior year.

Highlights for the year:

· The membership base has increased from 8.3 million to 12.5 million during the year with active members (customers purchasing in the last 12 months) increasing from 696,281 to 826,654; 

· Active customer spend for the year has increased from A$261 in FY13 to A$280 in FY14;

· New Buying offices were opened in New York, Florence and London and a new warehouse was opened in Orlando, Florida;

· Acquisition of Cocosa Lifestyle Limited completed May 2014;

· 22% pre-IPO investment by Shelton Capital Limited, which is ultimately owned by Lady Cristina Green (owner of the Arcadia group); and

· 4.8% post-IPO investment by the Sports Direct Group. 

Financial Review

Gross margin in our core ANZ market remains strong at 28.3%. Overall gross margin is also strong at 26.9% particularly as the company is aggressively expanding the business into Asia. Gross margins remain robust for a business of this nature reflecting its marketplace model and very low inventory risk. Revenue in Asia has increased from A$11.7 million to A$22 million in 2014. 

The business has continued to focus aggressively on international expansion outside the ANZ region leveraging the sourcing and operational investment already made in the US and UK. With all the planned websites successfully launched, the focus is on acquiring new members in those markets, identifying which markets are performing ahead of the our forecast and scaling rapidly.

During 2014, the company significantly increased its international expansion plans, in particular, investing in buying and management teams, opening new facilities and developing relationships with key suppliers, ahead of entering into new markets. Operating costs are within our forecast range, we continue to be vigilant on managing expense growth in the business.

A one-off non-recurring cost related to the AIM admission of A$9.8 million was booked to the profit or loss this financial year. The results were also affected by a non-cash fair value adjustment loss for the preference shares of A$51.2 million.

Investment in capital expenditure for the year was A$3.5 million, an increase of A$1 million in FY13. The company has continued to expand its IT development teams internationally with the key focuses being on mobile platform, data, digital marketing and the ERP system. Additional investment in the company's warehouse and office facilities has also occurred as part of the company's global expansion program.

As at 30 June 2014, MySale had cash balances (including cash equivalents) of A$77.3 million.

Strategy

MySale is pursuing six growth strategies:

1. Continue to grow active membership base

The business has significantly increased its investment in acquiring new members through the use of Google and Facebook marketing during the year. Additional focus in the region on above the line strategies in the first half of FY15 will support the continued growth in the membership base.

2. Expansion into new geographies

Since the listing, the company has opened new MySale online sites in the UK, US, Korea and Hong Kong. In addition, it has relaunched the Cocosa brand, which was acquired in May 2014, in the UK market. Plans are at an advanced stage to launch this brand in the ANZ region.

3. Implement initiatives to increase member activation, repeat purchase, average basket and retention

The company is currently working on initiatives to broaden its activation channels and has implemented a new program focused on member reactivation. We expect to see the benefit of these initiatives in the first half of FY15.

4. Broaden and deepen supplier base and online flash sales events

During the financial year, the group introduced a new travel category on the ANZ websites and also increased the range of products sourced from the UK, US and other European markets. The company also launched flash sale campaigns with the Arcadia group, including Burton Menswear, British Home Stores and TOPSHOP and Sports Direct International. It has completed the integration of Sports Direct and is now powering Sports Direct e-commerce business into the ANZ region.

5. Continue to invest in its mobile platform

The group continues to upgrade the functionality of its mobile platforms to improve the user experience. Recent improvements include push notifications, Android applications and the launch of the new Windows App.

6. Pursue acquisitions and joint venture partner opportunities

Having recently completed the acquisition of Cocosa Lifestyle Ltd and acquiring a controlling stake in a Nordic flash sale business, the group continues to review a number of opportunities.

Current trading and outlook

We remain committed to our strategy of working with our international brand partners providing them with a marketplace solution to access the MySale membership base and dispose of excess inventory. The Group's global membership footprint allows brands to take advantage of Northern and Southern hemisphere contra-seasons opportunities. Strategically the Central hemisphere South East Asia region remains at the core of the long term growth strategy. The business has continued to focus aggressively on international expansion outside the ANZ region leveraging the sourcing and operational investment already made in the US and UK.

Our long term growth prospects are further underpinned by the 22% Pre-IPO investment by Shelton Capital Limited and the 4.8% post-IPO investment by the Sports Direct Group. We are now in the process of leveraging the commercial opportunities with flash sales campaigns launched with Arcadia brands including TOPSHOP. The company is providing e-commerce support and other services to Sports Direct, to support the growth of the Sports Direct brands in ANZ.

The group has executed its strategy in terms of opening new websites and now operates 14 websites in 10 countries, including the launch in the UK and US markets. The UK performance will be further underpinned by the roll-out of the recently acquired Cocosa brand.

The group has also acquired a 60% share in the Danish flash sale website Invitetobuy which gives it a platform to expand the MySale brand into the Nordic markets Denmark, Norway, Sweden and Finland.

Principal risks and uncertainties

The management of the business and the execution of the group's growth strategies are subject to a number of risks which could adversely affect the group's future development. The following is not an exhaustive list or explanation of all risks and uncertainties associated with the group, but those considered by management to be the principal risks:

Membership base

The group needs to attract new 'active' members, in sufficient numbers, especially in markets where the group already has a degree of market penetration, such as ANZ. In order to expand its membership base, the group is appealing to members who have historically used other methods to purchase products, such as in-store, retailers' own websites or the websites of the group's competitors. The 'flash sales' model operated by the group needs to continue to be successful. The group's strategies require existing members to make repeat purchases of products from the group. The group's current 'lapsed client strategy' uses personalised emails, vouchers and prompting emails to attempt to re-engage members to purchase product regularly. If these strategies fail, the group's membership base may be reduced which could have an adverse effect on the group's results of operations, financial condition and financial results.

Cost efficiencies

The group targets a 'cost per acquisition' ('CPA') that is acceptable based on the expected member value and the group's likelihood of recovering the acquisition costs. Increasing the group's membership base is necessary to avoid the group incurring significantly higher marketing expenses and as a result, higher CPA, which could have an adverse effect on the group's results of operations, financial condition and financial results.

Strategies and expansion plans

The group's strategies and expansion plans, particularly into new geographies, may result in unforeseen costs or require significant management attention or resources. The group may not perform to expectations and, in the case of new geographies, prove to be unsuccessful. In new markets, the group is required to develop banking and merchant solutions, delivery solutions and expand its infrastructure of people and information systems and train and manage its expanding employee base. In new jurisdictions, the group may compete with companies already operating in the relevant market, and these companies may understand the local market better than the group. Unsuccessful attempts at expansion into new jurisdictions could damage the group's reputation, incur significant unanticipated costs and as a result, adversely affect the group's business, prospects, results of operations and financial results.

Product inventory

The group requires a continuous source of inventory, from existing suppliers or new suppliers, at favourable prices, on favourable terms, in a timely manner and/or in sufficient volume. A key driver for the group's success is its ability to source product from a wide variety of brands, styles, categories and product types at discounted prices. The group does not have contractual assurances of continued supply, pricing or access to new products from existing suppliers. However, the group maintains strong relationships with suppliers and provide them with an effective mechanism to distribute their products. To maintain its reputation, the group depends on suppliers to provide high quality, genuine, product merchandise that meets with members' expectations. If the group is unable to continue to source such products, member engagement and purchases would likely reduce while costs increase and as a result, the group's results of operations, financial condition and financial results could be adversely affected.

Growth in e-commerce and flash sales

The business of selling products over the internet, particularly on the flash sales model, is dynamic and relatively new. The market segment for the flash sales model has grown significantly, and this growth may not be sustainable. If members cease to find the flash sales model shopping experience fun, entertaining and good value, or otherwise lose interest in shopping in this manner, the group's member base and buying patterns may decline.

Global economy

The group's performance is subject to global economic conditions. Deterioration in these conditions may reduce consumer spending, particularly on discretionary items, which includes the group's merchandise. Adverse economic changes in any of the regions in which the group sells its products could reduce consumer confidence and could negatively affect net sales and have an adverse effect on the group's operating results.

Technology and emails

The group's IT systems are integral to its operations. The technology supports the group's websites and mobile applications, logistics management, product information management, administration management systems, security systems and a third-party data centre hosting facility. If the IT systems do not function properly there could be system disruptions, corruptions in databases or other electronic information, delays in sales events, delays in transaction processing, website slowdown or unavailability, loss of data or the inability to accept and fulfil member orders which, if sustained or regular, could adversely affect the group's business, results of operations, financial condition and financial results.

The group's business is highly dependent on engaging with members via daily emails and other messaging services. These inform members of the day's sales events, prompting them to visit the relevant website and purchase products. The group relies on the successful delivery of emails or other messages to members and also that members actually open and read the emails. Webmail prioritisation, 'spam' and blocking filters and local laws on sending emails could affect the group's business, prospects, results of operations and financial results.

Competition

Competitive pressures, changes in product and fashion and hence consumer demand are continuing risks which could result in the loss of sales. The group manages this risk by the continuous sourcing of new products, adding new sales categories and marketing to stimulate customer interest and by maintaining strong relationships with customers.

The group does not take delivery of products from supplier until after it has been ordered by members and therefore delivery times may be longer than other competitors. If the group seeks to decrease delivery times in order to tackle the competition and meet member demand, additional shipping costs are likely to be incurred. These costs may not be able to be passed on in full or at all to members. Alternatively, the group may be required to change its operations to carry additional inventory and face additional inventory risk. 

Logistics and distribution networks

The group uses a third-party logistics provider to manage and process product sourced from China and to ship product directly to members. There is a risk that the group may experience network interruptions (including third parties' delivery services) which may prevent the timely or proper delivery of products. These could damage the group's reputation, deter repeat customers, deter suppliers from dealing with the group and adversely affect its business, results of operations and financial results.

Loss of people

The group's senior executive team is instrumental in implementing the group's business strategies and executing business plans which support the business operations and growth. The buying teams have strong supplier relationships which are central to the group's ability to source discounted, quality products. Service agreements are in place and the risk of the loss of key personnel is mitigated by regular reviews of remuneration packages (including long term incentive schemes) and succession planning within the team.

Trademarks and brand reputation

Maintaining and enhancing the brand is critical to the group's strategies going forward. If the group fails to meet member (and supplier) expectations, negative publicity, unfavourable member reviews and complaints on social media platforms could damage the brand and reduce consumer use of the group's websites. If the group fails to maintain the brand or if excessive expenses are incurred in this effort, the group's business, results of operations, financial condition and financial results may be materially and adversely affected. As with all brands, the group is exposed to risk from unauthorised use of the group's trademarks and other intellectual property. Any infringement could lead to a loss in profits and have a negative impact on image and continued success. Trademarks are registered and where any infringements are identified, appropriate legal action is taken.

Changes in indirect tax rules

Changes in local indirect tax, such as the Goods and Services Tax ('GST') in Australia, and duty treatment of any of the markets in which the group operates could have an impact on the sales of imported brands in those markets. Reducing the indirect tax threshold on imported goods could reduce the attractiveness of the group's offers and have a material and adverse effect on the group's financial condition and financial results.

Cash

The management of cash is of fundamental importance. The increase in cash in the year reflects the additional funds raised in the listing net of Joint Broker and Joint Bookrunner costs (£35.2 million) less funds used in the business. At the reporting date the group had a cash balance of A$77.3 million (2013: A$15.1 million). As mentioned above, the group was admitted to the AIM and this provided the group with sufficient working capital to carry out its expansion plans. The group is on a firm financial footing and confident of its ability to continue as a going concern.

Corporate social responsibilities

The group's approach is to make a positive difference to the people, environment and communities in which it works. Examples of our approach include engaging not for profit employment agencies, to motivate and upskill the local unemployed community to sustain employment with MySale and investing in warehousing training programs such as a Certificate 3 in Warehousing and Logistics for our Australian staff. To reduce waste and the impact on our environment we do not put copies of customer invoices in our parcels, but rather provide them online.

People

Equal opportunity

The group is committed to an active equal opportunities policy. It is the group's policy to promote an environment free from discrimination, harassment and victimisation, where everyone will receive equal treatment regardless of gender, colour, ethnic or national origin, disability, age, marital status, sexual orientation or religion. Employment practices are applied which are fair, equitable and consistent with the skills and abilities of the employees and the needs of the group.

Disabled employees

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment with the group continues and that appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical with that of other employees.

Employee consultation

The group places considerable value on the involvement of its employees and has a practice of keeping them informed on matters affecting them as employees and on the various factors affecting the performance of the group, which is achieved through formal and informal meetings. Employee representatives are consulted regularly on a wide range of matters affecting their current and future interests.

We would like to thank the entire MySale team for their continued hard work during the financial year and welcome our new shareholders.

By Order of the Board.

_____________________________

David Mortimer AO

Chairman

London

14 September 2014

As the company is admitted to AIM, a market regulated by London Stock Exchange Plc, group is not required to comply with any particular corporate governance code. However, the directors recognise the value and importance of high standards of corporate governance and acknowledge the importance of the principles set out in Quoted Companies Alliance ('QCA') Corporate Governance Code for Small and Mid-sized Quoted Companies 2013 (the 'QCA Code'). The Board will therefore apply the principles of the QCA Code where they consider it appropriate for a company of MySale's size and nature.

The Board of Directors

The company was incorporated on 28 April 2014 and was admitted to AIM on 16 June 2014. On admission, and as at the date of approval of these financial statements, the Board consisted of five directors: three executive and two non-executives. Both non-executive directors are considered independent under the criteria identified in the QCA Code and together they bring considerable knowledge, skills and experience to the Board and its deliberations. The members of the Board are:

David Mortimer AO Independent Non-Executive Chairman

Jamie Jackson Executive Director and Vice Chairman

Carl Jackson Executive Director and Chief Executive Officer

Andrew Dingle Executive Director and Chief Financial Officer

Adrian Mackenzie Independent Non-Executive Director

 Biographies for each of the directors are set out in the Directors' report under 'Directors and their interests'.

On admission, the Board adopted a schedule of matters reserved to its attention which include:

· overall business strategy of the group;

· review of key operational and commercial matters;

· review of key financial matters, including changes to the group's capital structure, borrowing facilities, acquisitions, disposals and material capital expenditure;

· membership of the Board and its standing Committees, including delegation of authority to the Audit and Remuneration Committees;

· approval of full year and half-year financial statements and any interim management statements or other financial disclosures;

· regulatory and shareholder communications; and

· appointment and performance review of key advisors

The Board meets formally on a regular basis to consider strategy, performance and the framework of internal controls. Prior to each meeting, all directors receive appropriate and timely information including briefing papers which enable them to discharge their duties. Directors have access to the advice and services of the company secretary and external legal and financial advisers who together provide guidance and confirmation that Board procedures are followed and applicable rules and regulations are complied with. With the prior approval of the chairman, directors are able to obtain independent professional advice in the furtherance of their duties, at the company's expense.

Details of the service contracts of the executive directors and the letters of appointment of the non-executive directors are set out in the Directors' remuneration report.

In order to facilitate the business of the group, the Board has established an Audit Committee and a Remuneration Committee and has delegated certain of its responsibilities as appropriate and in line with the recommendations of the QCA Code.

Audit Committee

The Audit Committee has the primary responsibility for monitoring the adequacy and effectiveness of the group's systems of internal financial control and risk management, ensuring that the financial performance of the company is properly measured and reported on, reviewing and challenging reports from management and the external auditor relating to the group's accounting and internal controls and appraising the need for an internal audit function, in all cases having due regard to the interests of shareholders. The full terms of reference of the Audit Committee are available on the company's website.

The members of the Audit Committee are:

David Mortimer AO Chair

Adrian Mackenzie Member

The Audit Committee did not meet during the period from admission, being 16 June 2014, to the end of the financial year. The Audit Committee will meet at least three times a year and otherwise as required by the company's financial reporting and audit cycle. The Chief Financial Officer has a standing invitation to attend all meetings of the Audit Committee. The remaining executive directors, other members of the senior management team or the company's advisers may be invited to attend all or part of any Audit Committee meeting where appropriate and minutes of meetings will be circulated to all Board members unless it would be inappropriate to do so.

Remuneration Committee

The Remuneration Committee is responsible for reviewing the performance of the executive directors and for determining the terms and conditions of their employment, level of remuneration including short-term and long-term incentives, having due regard to the interest of shareholders in all matters. The full terms of reference of the Remuneration Committee are available on the company's website.

Details on the structure of the company's remuneration policy and the emoluments paid to the Board members during the financial year are set out in the Directors' remuneration report.

The members of the Remuneration Committee are:

Adrian Mackenzie Chair

David Mortimer AO Member

The Remuneration Committee did not meet during the period from admission, being 16 June 2014, to the end of the financial year. The Remuneration Committee will meet at least twice a year and otherwise as required. The executive directors, head of human relations or the company's advisers may be invited to attend all or part of any Remuneration Committee meeting where required and minutes of meetings will be circulated to all Board members unless it would be inappropriate to do so.

Internal financial controls

The Board place considerable importance on maintaining full control and direction over appropriate strategic, financial, organisational and compliance issues, and have put in place an organisational structure with formally defined lines of responsibility and delegation of authority. There are established procedures for planning and capital expenditure, for information and reporting systems and for monitoring the group's business and its performance. Adherence to specified procedures is required at all times and the Board actively promotes a culture of quality and integrity. Since admission, compliance is monitored by the Audit Committee which, in turn, reports its findings to the Board.

The Board, via delegated authority to the Audit Committee, is also responsible for the group's system of internal control and for reviewing its effectiveness. Such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss. The agreed processes include comprehensive budgeting systems with an annual budget approved by the Board, monthly consideration of actual operational results compared with budgets, forecasts and regular reviews by the Board of year end forecasts. The Board reports to shareholders half‑yearly.

The group's control systems address key business and financial risks. Matters arising are reviewed on a regular basis.

As a company admitted to AIM, MySale is not required to prepare a Directors' remuneration report. The following narrative disclosures are prepared on a voluntary basis for the group and are not subject to audit, unless otherwise specified.

Principles used to determine the nature and amount of remuneration

The objective of the group's remuneration framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns the remuneration for executive directors and key senior management with the achievement of strategic objectives and the creation of value for shareholders. The Board of Directors ('the Board') ensures that the remuneration for executive directors and key senior management satisfies the following key criteria for good reward governance practices:

· is competitive and is acceptable to shareholders;

· aligns executive compensation with company performance and shareholder return; and

· is transparent.

The Remuneration Committee, as detailed in the Corporate governance, is responsible for reviewing the performance of the executive directors and senior employees of the group and for determining the terms and conditions of their employment, level of remuneration including short-term and long-term incentives, having due regard to the interest of shareholders in all matters.

The Remuneration Committee did not meet during the period from AIM admission, being 16 June 2014, to the end of the financial year. The Remuneration Committee will meet at least twice a year and otherwise as required.

Remuneration of directors

The fees payable to the directors shall not exceed an aggregate amount of £1,500,000 per annum or such greater amount as shall be determined by the company by ordinary resolution. This is distinct from any salary, remuneration or other amount which may be payable to the directors.

The directors are entitled, under the Articles, to be paid all reasonable expenses as they may properly incur in attending meetings of the directors or of any committee of the directors or shareholders meetings or otherwise in connection with the discharge of their duties.

Executive directors' remuneration

The group's remuneration policy for executive directors considers a number of factors and is designed to:

· have regard to the director's experience and the nature and complexity of their work in order to pay a competitive salary, in line with comparable companies, that attracts and retains directors of the highest quality;

· reflect the director's personal performance;

· link individual remuneration packages to the group's long term performance and continued success of the group through the award of annual bonuses and share-based incentive schemes;

· provide post‑retirement benefits through contributions to individual's pension schemes; and

· provide employment‑related benefits including the provision of a company car or cash alternative, life assurance, insurance relating to the director's duties, housing allowance, medical insurance and permanent health insurance.

Directors' service agreements, salaries, bonuses and other incentive schemes

Each executive director has a service contract with the group, dated 10 June 2014. The basic annual salaries and key benefits are as follows:

Executive directors' salaries will be reviewed annually in line with the remuneration reviews for all other group employees.

Executive director's employment contracts are continuous. They may be terminated by either party by 6 months' written notice. The company may at its sole and absolute discretion terminate the employment of an executive director by making a payment in lieu of any unexpired notice period equal to their basic salary. Executive directors have agreed to confidentiality undertakings, without limitation as to time, and has agreed to non-compete, non-solicitation of staff and non-interference in supply restrictive covenants that apply for a period of 12 months following termination of employment with the group.

Executive directors are eligible to participate in a discretionary annual bonus scheme on the terms decided by the Remuneration Committee and may also participate in any benefits arrangements the group has in place for categories of employees of which he or she is a member, subject to and in accordance with the terms and/or rules of those arrangements from time to time.

Non-executive directors' remuneration

The remuneration of non-executive directors is a matter for the Chairman of the Board and the executive directors and no director is involved in any decisions as to their own remuneration.

David Mortimer AO and Adrian Mackenzie were appointed as non-executive directors on 28 May 2014, and entered into letters of appointment on 3 June 2014 and 11 June 2014, respectively. Each receives a fee for their services which takes into account the role undertaken. They do not receive any pension or other benefits from the group, nor do they participate in any of the share option or bonus schemes.

With effect from AIM admission, the annual fees for non-executive directors are as follows:

The appointment of any non-executive director is terminable on three months' written notice.

The following information is subject to audit.

Directors' remuneration for the year ended 30 June 2014 was as follows:

* Remuneration from date of appointment as director

** Remuneration for the entire year the group was in operation The company established two employee share plans prior to the AIM listing: (i) the Executive Incentive Plan ('EIP') and (ii) the Loan Share Plan ('LSP').

(i) The Executive Incentive Plan

Andrew Dingle had a previous entitlement to a cash bonus of A$750,000 which became payable on AIM admission. He agreed to defer the payment and take it in the form of a conditional award under the EIP. The award converts the cash due to him into ordinary shares at the Placing Price of £2.26 with an A$75,000 enhancement. Total ordinary shares are 201,115. The award will vest 12 months after AIM admission (16 June 2015) and is not subject to any performance conditions but is subject to continued employment.

(ii) Loan Share Plan

The emoluments disclosed above do not include any amounts for the value of share awards granted to the directors who have been selected to participate in the LSP. The LSP enables employees selected to participate to buy or subscribe for ordinary shares using a loan from the company. The ordinary shares are bought on the market or are subscribed at market value. The loan is then repayable and the ordinary shares may be sold to repay the loan on vesting. The loan is interest-free and recourse is limited to the value of the ordinary shares bought with it. 50% of the ordinary shares will vest two years after and the balance three years after AIM admission however vesting is subject to the Remuneration Committee being satisfied that the underlying performance of the group justifies vesting. In determining this the Remuneration Committee will have regard to revenue and Earnings Before Interest, Tax, Depreciation and Amortisation ('EBITDA') included in the company's internal forecasts as at the date of allocation.

Shares granted under the approved Loan Share scheme are as follows:

Share price information

The market price of MySale Group Plc ordinary shares at 30 June 2014 was £2.13 and the range during the period from AIM admission, 16 June 2014 to 30 June 2014 was between £1.87 and £2.27.

The directors present their report, together with the financial statements and independent auditor's report, on the consolidated entity (referred to hereafter as the 'consolidated entity' or 'group') consisting of MySale Group Plc and its subsidiaries at the end of, or during, the year ended 30 June 2014.

Directors

The directors who have served on the Board of MySale Group Plc during the period from incorporation (28 April 2014) and up to the date of this report are set out below:

Information on directors and their interests

Biographies for the directors in position as at 30 June 2014 and the date of this report, and their interests in the ordinary shares of the company, are shown below.

Directors' beneficial interests in the shares of the company:

Details of share options or share awards granted to the executive directors are disclosed in the Directors' remuneration report.

Information on company secretary

Results and dividends

The results for the year are set out in the statement of profit or loss and other comprehensive income. No dividend has been paid during the financial year and the directors do not recommend a final dividend in respect of the year ended 30 June 2014.

In the process of finalising the financial statements for the financial year ended 30 June 2014, MySale identified an error in the calculation of unearned revenue reported in the financial statements for the year ended 30 June 2013. The error overstated the revenue and profit before tax by A$1,746,000. There was no impact on the profit or loss and balance sheet for the current financial year. The comparatives in these financial statements have been adjusted from the numbers reported in the AIM admission document. The error had no impact on the statement of cash flows.

Going concern

The group's business activities, together with the factors likely to affect its future development, performance and financial position are given in the Business review and Directors' report. In addition, the notes to the financial statements include details on the group's borrowing facilities and its objectives, policies and processes for managing its capital; its financial risk management objectives; and its exposures to credit risk and liquidity risk.

The group has considerable financial resources together with a customer base split across different geographic areas. The group's forecasts and projections, taking into account reasonably possible changes in trading performance, show that the group should be able to operate within the level of its current facility. As a consequence, the directors believe that the group is well placed to manage its business risks successfully.

The directors have, at the time of approving the financial statements, a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the Annual Report and financial statements.

Substantial shareholdings

At year end the company had been notified of the following interests of 3% or more of the share capital of the company, other than those of the directors above:

Charitable and political donations

The group made charitable donations of A$112,827 (2013: A$15,570) during the financial year. The group made no political donations.

Auditor

In the case of each of the persons who are directors of the company at the date when this report was approved:

· so far as each of the directors is aware, there is no relevant audit information of which the company's auditor is unaware; and

· each of the directors has taken all the steps that he ought to have taken as a director to make himself aware of any relevant audit information and to establish that the company's auditor is aware of that information.

PricewaterhouseCoopers were appointed auditors during the financial year and have expressed their willingness to continue as auditor and a resolution to re-appoint them will be proposed at the forthcoming Annual General Meeting.

By Order of the Board.

David Mortimer AO 

Chairman

14 September 2014

The directors are responsible for preparing the financial statements of the group in accordance with applicable law and International Financial Reporting Standards ('IFRSs') as adopted by the European Union and financial statements of the parent company in accordance with applicable law and United Kingdom Accounting Standards.

The Companies (Jersey) Law 1991 requires the directors to prepare financial statements for each financial year that they give a true and fair view of the state of affairs of the group and the parent company and of the profit or loss of the group for that period.

In preparing those financial statements, the directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and accounting estimates that are reasonable and prudent;

· state whether IFRSs as adopted by the European Union and applicable United Kingdom Accounting Standards have been followed for the group and the parent company respectively, subject to any material departures disclosed and explained in the group and parent company financial statements;

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the parent company will continue in business.

The directors confirm they have complied with all the above requirements in preparing the financial statements.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the parent company and the group and enable them to ensure that the financial statements comply with the Companies (Jersey) Law 1991. They have general responsibility for taking such steps as are reasonable open to them to safeguard the assets of the parent company and the group and to prevent and detect fraud and other irregularities.

So far as the directors are aware, there is no relevant audit information of which the parent company and group auditors are unaware, and each director has taken all steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the parent company and the group's auditors are aware of that information.

The directors are responsible for the maintenance and integrity of the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The directors consider that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess a company's performance, business model and strategy.

Each of the directors, whose names and functions are listed in the Directors' report confirm that, to the best of their knowledge:

· the group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and loss of the group;

· the Directors' report includes a fair review of the development and performance of the business and the position of the group; and

· the Strategic report contains a description of the principal risks and uncertainties that the group faces.

Report on the financial statements

Our opinion

In our opinion:

· the financial statements, give a true and fair view of the state of the group's and of the parent company's affairs as at 30 June 2014 and of the group's loss and cash flows for the year then ended;

· the group financial statements have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union;

· the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

· the financial statements have been properly prepared in accordance with the requirements of the Companies (Jersey) Law 1991.

This opinion is to be read in the context of what we say below.

What we have audited

The group and parent company financial statements and (the "financial statements"), which are prepared by MySale Group plc, comprise the:

· Balance sheet as at 30 June 2014;

· Parent company balance sheet as at 30 June 2014;

· Statement of profit or loss and other comprehensive income for the year then ended;

· Statement of cash flows for the year then ended;

· Statement of changes in equity for the year then ended; and

· Notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.

The financial reporting framework that has been applied in the preparation of the group financial statements comprise applicable law and IFRSs as adopted by the European Union. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards.

In applying the financial reporting framework, the directors have made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.

What an audit of financial statements involves

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) ("ISAs (UK & Ireland)"). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error.

This includes an assessment of:

· whether the accounting policies are appropriate to the group's and the parent company's circumstances and have been consistently applied and adequately disclosed;

· the reasonableness of significant accounting estimates made by the directors; and

· the overall presentation of the financial statements.

In addition, we read all the financial and non-financial information in the Annual Report and Financial Statements and the company financial statement to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on other matter prescribed by the Companies (Jersey) Law 1991

In our opinion the information given in the Strategic report, Corporate governance, Directors' remuneration report and Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Other matters on which we are required to report by exception

Adequacy of accounting records and information and explanations received

Under the Companies (Jersey) Law 1991 we are required to report to you if, in our opinion:

· we have not received all the information and explanations we require for our audit; or

· adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

· the parent company financial statements are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Responsibilities for the financial statements and the audit

Our responsibilities and those of the directors

As explained more fully in the Directors' responsibility statement set out on page 16, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and ISAs (UK & Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

This report, including the opinions, has been prepared for and only for the company's members as a body in accordance with Article 113A of the Companies (Jersey) Law 1991 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Christopher Burns (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

London

14 September 2014

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

The above statement of changes in equity should be read in conjunction with the accompanying notes

The above statement of cash flows should be read in conjunction with the accompanying notes