22 Jan 2015 07:00
MySale Group plc: H1 Trading update
MySale Group plc ("MySale" or the "Company" or the "Group") today issues the following trading update for the six months ended 31 December 2014.As a result of a focus on operational execution and the positive impact of the Group's expanded marketing programme, revenues accelerated in December. As a result, revenues for the first half of the financial year will be 8% up on the same period last year, an improvement on the growth rate announced on 15 December 2014 for the first five months of the financial year.MySale incurred a number of one-off investments in marketing and other product initiatives in the first five months of the financial year to stimulate revenue growth and enter new markets. As a result of these one-off investments, the Company incurred an EBITDA loss in the period. However, the Board anticipates that the EBITDA margin in the second half will be positive as the one-off marketing will not be repeated and management has taken steps to reduce general promotion and operating expenses.
The Group's financial position remains strong thanks to its low inventory business model and cash resources. At 31 December 2014 the Company's cash balances were A$59 million (£31.2 million) and remain broadly unchanged today.
Following a review of first half performance, the Company has decided to focus on its key markets of Australia and New Zealand ("ANZ"), its high growth South-East Asian operations, and the UK, where it has enjoyed strong revenue growth since launch last year.In the US, where the Group also launched during 2014, member acquisition costs have been higher than expected. As a result the Company has closed its US website for the time being. Existing buying and warehouse operations in the US, which fulfil US sourced product globally, remain unaffected.The Company has also decided to withdraw from the South Korean market for similar reasons and therefore its South Korean website has also been closed until further notice. These two closures will result in a significant reduction in the Company's cost base, whilst enabling it to focus on its most attractive markets.OutlookRevenues for the full year to 30 June 2015 are expected to grow at a similar rate to the first half of the financial year. During the second half, management will focus on improving the efficiency of marketing and promotional spending, further optimising the cost base and converting the new members acquired during the first half into active customers.As a result, management expect the Company to generate positive EBITDA in the second half of the year.A further update will be given at the time of the announcement of the Company's Half-Yearly Report for the six months to 31 December 2014, which is expected to be published on 27 February 2015.Carl Jackson, Chief Executive commented: ''We had a challenging first half, brought on in part by our rapid expansion. Despite this our core business model remains sound and we have delivered strong growth in members which will contribute to the turnaround in financial performance in the second half. The Group is well insulated with a strong cash position and its low inventory business model where the vast majority of revenue is generated on a consignment basis.''"Our focus in 2015 will be on excellent sourcing, flawless execution, cost discipline and continued member conversion to maximise our EBITDA performance. We continue to see substantial growth opportunities for the business, particularly in the high growth South- East Asian markets and also in the UK, where we now have almost 1.8 million members."
Enquiries:
MySale Group plc
Jamie Jackson, Executive Director and Vice-Chairman
Carl Jackson, Chief Executive
+61 (0) 414 817 843
+44 (0) 7895 161 153
Graeme Burns, Corporate Development
+44 (0) 777 585 4516
Nominated Adviser and Joint Broker
Macquarie Capital (Europe) Limited
+44(0)20 3037 2000
Ken Fleming
Nicholas Harland
Financial Public Relations
Maitland
+44 (0)20 7379 5151
Neil Bennett
Dan Yea