TIDMMYSL
RNS Number : 7682R
MySale Group PLC
26 September 2017
MySale Group plc (AIM: MYSL) (the "the group"), the leading
international online retailer, is pleased to announce its audited
preliminary results for the year to 30 June 2017.
Year to 30 June (A$ million) FY17 FY16 change
------------------------------- ------ ------ -------
Revenue 268.4 252.3 +6%
Online Revenue(1) 238.7 217.9 +10%
Gross Profit 76.0 66.7 +14%
+191
Gross Margin 28.3% 26.4% bp
Underlying(2) EBITDA 8.7 5.5 +59%
Underlying profit before tax 3.3 1.1 +226%
Reported profit/(loss) before
tax (1.5) 0.2
Underlying basic earnings
per share (cents) 2.5 0.4 +500%
Financial highlights
-- Underlying basic earnings per share increased 500% to 2.5 cents
-- Underlying EBITDA increased by 59% to A$8.7 million
-- Gross profit increased 14% to A$76 million, as gross margins increased 190bp
-- Online revenue grew by 10%, to A$238 million, driven by the growing active customer base
-- Group revenue grew 6% to A$268 million (CER(3) growth 9%)
-- Underlying profit before tax increased 226% to A$3.3 million (FY16: A$1.0 million)
-- Reported loss before tax of A$1.5 million (FY16: A$0.2 million)
Strategic highlights
-- Technology, supply and customer developments significantly strengthen our capability
-- Expansion of our marketplace platform
-- Creation of our Endless Aisle concept to leverage platform and supply-side strengths
-- Further long-term partnerships formed with notable global retail brands
-- M&A activity increased and Identity Direct acquired at end of the year
Technology highlights
-- Accelerated investment into our data-driven proprietary technology
-- New platform launched including a scalable and flexible marketplace
to leverage the large customer database
-- Single live view of all global inventory available to all websites
-- Launch of Ourpay a proprietary 'buy-now, pay-later' payments system
Operational highlights
-- Active customer base like-for-like increase of 11% to 0.9 million
-- Including Identity Direct active base now increased to 1.0 million
-- Strategic plan to increase own-buy inventory continues - now 17% of online revenue
-- Integration of Identity Direct business progressing ahead of schedule
KPI's
-- Continued focus on activating customers with higher lifetime-value
o Average order value (AOV) stable at A$87
o Robust average revenue per active customer A$292
o Steady average frequency of 3.3x
-- Mobile activity continues growing and represented 59% of orders
-- Returns rate remains at low level of only 5%
Outlook
-- Good start to current year - revenue growth accelerating and
underlying profitability growing strongly
-- Underlying EBITDA for the year expected to be at least in
line with upper end of market expectations
Carl Jackson, Chief Executive Officer commented;
"We are very pleased with the group's progress during the year
and the improved financial performance, which delivered
significantly increased underlying EBITDA. Sustained focus on our
strategic goals has delivered yet another year of growing revenue
and, more importantly, increasing profitability.
"Our new partnerships are testament to the strength and quality
of our international marketplace platform demonstrating further
progress in our strategy of working with global brands and
retailers to provide our customers with unrivalled value as well as
the best possible choice and service. Our partners include some of
the largest, most successful international fashion, sports and
general retailers.
"There is a structural shift underway in how online and offline
retail brands manage their inventory cycle with increased
integration and efficiency key criteria. MySale's established
international platform is uniquely placed to partner with these
brands and deliver the integrated inventory solutions and new sales
channels that they seek.
"Investment into our proprietary technology has accelerated and
this year saw the launch of a brand new platform which will support
all the group's activities, including marketplace, in the future.
This enhanced, data-driven, platform transforms our opportunities
with brands and customers. We have a fully customisable, integrated
proposition for brands to seamlessly support all their needs. We
have even greater data insights to our customers' needs and now
they have access to our 'Endless Aisle' with an even greater choice
of products at compelling discounted prices.
"The Endless Aisle combines our increasingly long tail of
inventory, now over 300,000 SKU, with our new, single live view of
that global inventory, to which all our websites are linked,
providing increased customer choice and merchandising
opportunities.
"We also launched Ourpay the group's proprietary 'buy-now,
pay-later' payment solution. This further enhances our value
proposition and initial experience suggests it is popular with our
customers. We anticipate we will see further take-up within our own
customer base and also have the potential strategic option to
leverage Ourpay, as a standalone product, with others. We shall
shortly launch a subscription-delivery model for customers which
will be fully integrated to the Ourpay platform.
"We carried good momentum into this year and have a number of
exciting strategic initiatives that will support our continued
growth in revenue and profitability. This year has started well
with revenue growth accelerating from last year and strong growth
in underlying profitability. Whilst our peak trading period is
still ahead of us we expect that underlying EBITDA for the year
will be at least in line with the upper end of market
expectations."
(1.) Online: the group's online web-based retail activities
(A$238 million of total group revenue A$268 million)
(2.) Underlying: is the group's EBITDA, profit after tax expense
or earnings per share calculated having excluded certain
expenditure of a one-off, non-trading or non-cash nature in order
to allow clearer understanding of the underlying performance of the
year. Full details are contained within Notes 6, 7 and 27 to the
financial statements. EBITDA: earnings before interest, taxation,
depreciation and amortisation
(3.) CER: measure of annual growth based on constant exchange
rates
Enquiries:
MySale Group plc
Carl Jackson, Chief Executive Officer +61 (0) 414 817 843
Graeme Burns, Corporate Development Director +44 (0) 777 585 4516
Zeus Capital Limited (Nominated Adviser
& Joint Broker) +44 (0) 20 3829 5000
Giles Balleny, Corporate Finance
Benjamin Robertson, Corporate Broking
N+1 Singer (Joint Broker) +44 (0) 20 7496 3000
Mark Taylor
Maitland +44 (0) 20 7379 5151
Dan Yea
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 websites. 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
Australia, New Zealand 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
Whilst the financial year 2015-16 was all about restoring the
business to underlying profitability, this year our aim was to
demonstrate that we could build on this as well as producing real
step change improvements in our proprietary technology
platform.
I am delighted to report a 59% improvement in underlying EBITDA
to A$8.7milllion which was ahead of the market expectations at the
beginning of the period. Furthermore we increased our technology
investment from $4.0 million to $7.5 million which has allowed us
to launch a significantly enhanced marketplace platform, an
in-house payments solution ("OurPay") and multiple improvements in
marketing automation.
In the last 12 months we have signed notable new brand
partnerships, including gilt.com. Global brands and retailers
recognise the strength of our international/contra-seasonal
platform and our ability to support their inventory management and
to connect them to new customers. They increasingly want to deal
with a smaller number of regionally dominant partners with leading
technology platforms. We are ideally placed to deliver this.
We have made no secret of the fact that strategic acquisitions
are a core element of our growth strategy and we continue to refine
our process and criteria in this regard. Essentially, we are
targeting deals which can either widen the range of products which
our existing customers are likely to want to buy or which grow our
routes to market in our core geographies. Ideally both.
During the year, we acquired the trade and assets of Identity
Direct in Australia and New Zealand. This has opened a new vertical
for us in product personalisation; a sector we have been targeting
for some time given its attractive margin structure, strong
underlying growth and differentiated product set. It has also
provided further evidence of our ability to integrate acquisitions
onto our platform and add value through cost and revenue
synergies.
We have started the current financial year very well and whilst
there is much to accomplish both revenue and underlying
profitability have grown strongly. Our plans for this year are
ambitious and our new partnerships, product verticals and platform
enhancements will support these growth plans.
Whilst we are very much a technology focussed business the group
owes its success to the ability, intelligence and drive of the
hundreds of team members working 24-7 in our global operations and
I would like to place on record the board's appreciation of their
exceptional hard work.
_____________________________
Iain McDonald
Chairman
25 September 2017
Review of operations by the Chief Executive Officer
MySale Group Plc ('the group') has made excellent progress in
the year to 30 June 2017. Planned strategic initiatives have
delivered another year of improved financial performance and
positioned the group for further, profitable, growth.
The year's success was delivered by; our relentless focus on
providing customers with exceptional value, choice and service and;
our excellence in delivering unique sales channels and world-class
inventory management to brand partners; whilst simultaneously
leveraging the significant strength and efficiency of our
proprietary technology platform and international logistics
network.
The group's focus on customer engagement saw the active customer
base grow 11% and in turn online revenue, which represents 90% of
the group total, grew 10%, to A$238.7 million (FY16: A$217.9
million). Following the acquisition of Identity Direct, covered in
more detail below, the group now has over 1 million active
customers.
Total group revenue for the year rose 6% to A$268.4 million
(FY16: A$252.3 million) which reflects the strong online growth
referred to above, together with a planned reduction in lower
margin offline revenue. The group's focus on growing gross profit
has delivered an increase of 14% to A$76.0 million (FY16: A$66.7
million) which was underpinned by a 190 bp increase in gross margin
to 28.3% (FY16: 26.4%).
A$ m FY17 FY17 Growth FY16
Revenue Gross Profit GP% Revenue Gross Profit Revenue Gross Profit GP%
------------- -------------- ------ -------- ------------- -------- ------------- ------
Group 268.4 76.0 28.3% +6% +14% 252.3 66.7 26.4%
---------- ------------- -------------- ------ -------- ------------- -------- ------------- ------
ANZ 221.5 65.7 29.6% +5% +15% 210.7 57.1 27.1%
S-E Asia 33.8 8.1 23.9% +7% +7% 31.6 7.5 23.9%
ROW 13.1 2.3 17.8% +31% +14% 10.0 2.1 20.5%
This improved trading performance is driven primarily by the
group's clear plan to prioritise the growth of gross profit and
secure higher lifetime-value customers. Key elements of this plan
include localised merchandising and pricing, increased proportion
of own-buy inventory and reduced delivery promotions. The increased
levels of revenue and gross profit combined with a carefully
controlled cost base delivered a 59% increase in underlying EBITDA
to A$8.7 million (FY16: A$5.5 million).
This 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 within the group's three core
territories. The operational achievements and significantly
improved financial performance of FY17 represent another step on
the group's path of profitable growth, with further significant
growth anticipated in the current financial year.
Total underlying operating expenses increased 10% to A$67.4
million (FY16: A$61.2 million) reflecting the increased activity
and volumes of trade during the year. The group made a planned
investment into additional staff members in key senior management
and departments such as buying, merchandising and marketing in
order to ensure that the choice and service we provide to customers
is maintained as we grow. The same increases are not anticipated in
future years and the group will be able to leverage its fixed cost
base which represents around 56% of the total operating
expenses.
During the period, and across all territories, the group
continued to dedicate its marketing resources and spend, which was
circa 7% 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 and with stable
purchasing metrics.
During the year the group diversified the digital marketing
spend, notably in Australia and New Zealand (ANZ), by increasing
the emphasis of spend into customer re-engagement activity. The
early results of this diversification were encouraging as marketing
efficiency improved. This has led to a re-calibrated marketing plan
for the entire group. From the beginning of the current financial
year marketing objectives have been refocused based on these
learnings, and improved data analysis capabilities, to better
measure marketing costs and returns per purchase and buyer. Whilst
early in this revised programme the initial results have been
positive and further improvements in marketing efficiency are
anticipated during the year.
Technology Development
During the year the group increased capital expenditure, as
planned, in order to further develop its proprietary technology
capabilities. An important phase of work reached a conclusion and
saw the release of a new and enhanced version of the group's
technology platform during the year. This new platform's
functionality supports our key objectives of increasing revenue and
decreasing costs with more efficiency.
This new, marketplace enabled, platform allows fuller
integration across all the group's sales channels and to date all
of the group's websites, other than the recently acquired Identity
Direct, have 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 our
websites simultaneously. Similarly the platform allows a single
live view of each customer and their individual journeys allowing
us to better serve their preferences across all websites and mobile
device apps. As always the mobile buyer is at the heart of our
capabilities and this channel accounted for 59% of orders received
in the past year.
A key element of the 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. 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 in the customer proposition to drive
revenue, one example being the development of Ourpay, a 'buy-now,
pay-later' programme. This instalment payment option helps
customers manage their finances and has been shown to increase both
the spend and the frequency of those customers accepted to the
programme. This payment solution was developed in-house in order 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$1.8 million at the year
end and is anticipated to grow as transaction volumes increase.
The initial trials of Ourpay have been very positive. Customer's
average spend increased 19% and the frequency of purchase increased
by around 30%. Ourpay shall now be rolled out to all territories
and websites where legislation currently allows. In addition we
shall shortly launch a subscription-delivery model for customers
which will be fully integrated to the Ourpay platform.
Brands and Strategic Partnerships
The group has secured a number of new brand partners during the
last 12 months, the most notable being the launch of a strategic
relationship with gilt.com, a US based online retailer which is
part of The Hudson's Bay Company. This and other strategic
partnerships have already provided significant additional product
choice to customers in all the group's territories.
The partnership launched with Sports Direct with access to more
than 150,000 products from their inventory is now operational and
the group commenced live sales on its retail marketplace during the
year. Good progress has been made. We have direct inventory feeds,
tailored merchandising and volumes continue to grow.
Forging partnerships with flagship retail brands such as
Gilt.com and Sports Direct is a strong endorsement of the group's
capabilities in supporting brands in establishing new sales
channels as well as in inventory management. The retail landscape
is undergoing some 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.
We have invested more time and funds into product selection
during the year, ensuring customers have the best possible choice
available and by the end of the year we had more than doubled
listed SKU's to over 300,000. Nearly all of the increased product
selection has come from relationships with 3P suppliers and thus
the group does not take any inventory risk as the terms of business
are on a consignment or dropship basis. In order that customers can
easily find and navigate to their favourite brands and products the
group delivers highly personalised experiences and communications
to each customer.
Aligned with this materially increased product selection has
been an expansion of the product categories in which we have
excellent coverage. Refurbished technology is one such example of a
category that the group has launched and which resonates strongly
with our existing customer base. Finally, the acquisition of
Identity Direct has brought significant licensing expertise and
licensing relationships with global brands to the group and this is
a revenue opportunity the group plans to develop further.
Marketplace
The group's new technology platform ensures that the retail and
flash websites 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 will allow the group to substantially increase
the range of products available via our websites, particularly 3P
inventory, whilst minimising variable costs.
This platform facilitates the group's marketplace and allows the
integration of all websites directly with brands and retailers,
whether that be as part of supporting an inventory clearance or
providing a brand with a new retail channel. It also has created
the group's Endless Aisle concept.
The group has always offered a wide range of products but the
marketplace development now means that this range shall be
significantly expanded and as we now have a live feed of global
inventory to all websites, there is an opportunity to extend the
length of time products are available and merchandised to customers
- our Endless Aisle. Importantly the expansion of this very long
tail of product inventory will be driven by 3P vendor relationships
which incur limited marginal cost to the group.
The retail websites within the group's marketplace,
predominantly operate on a 3P supplier drop-ship basis and serve
the product verticals of sports (dealsdirect), home (oo), gifting
(topbuy) and personalised goods (Identity Direct) and are founded
on the acquisitions undertaken in ANZ over the last two years. The
experience gained during the successful integration and launch of
these sites will serve the group well as further verticals are
added in the future. As over 80% of our revenues are derived from
3P product listings the group has a relatively light working
capital requirement and further reductions in this requirement are
targeted in the future.
The creation of the retail marketplace platform represents a
step change in the potential addressable audience and in future
revenue opportunities of the group. Designed with mobile commerce
at its heart and to be simple and intuitive for vendors to use,
this platform will further support our brand partners and their
sales ambitions. Increasingly brands use marketplace solutions to
support their international sales as it provides local knowledge,
existing audiences, and a cost-effective launch in a new
territory.
Operations
In FY15 the group began implementing a strategy to increase the
proportion of inventory that is purchased outright as 'own-buy'
(1P), rather than on a consignment basis (3P) and during this year
1P goods increased to 17% of orders, consistent with that strategy.
Whilst the vast majority of goods sold are still done so on a
consignment or drop-ship basis, this 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.
During the year the group's highly efficient platform processed
record numbers of transactions. The volumes are remarkable and
underline the efficient processes and systems that the group has in
place to support brands and serve customers; on average more than
20,000 new products were launched daily and 180,000 digital images
were created or edited each month. In the year 2.9 million orders
were processed and 12 million units shipped which was only possible
due to high levels of automation and streamlined workflows. The
strength and capability of this platform will be leveraged to
further improve efficiency in coming years as our volumes increase
further.
The combination of the group's high quality sourcing, compelling
consumer value, product selection and reliable service means that
returns remain at industry leading levels of only 5% overall.
Investment in the development of the group's capabilities
continues and this year saw a number of key senior hires strengthen
the executive team and also enhancement of staff within our
marketing, data science and merchandising teams.
Acquisition of Identity Direct
The group acquired the business of Identity Direct, in ANZ,
during the fourth quarter of the financial year. Identity Direct is
a retailer of personalised products with strong licensing
relationships, particularly with entertainment brands, such as
Disney and Marvel. In relation to the group it is a relatively
small business, with annual revenues of circa A$10 million. 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 childrens and sports categories which
fits well with existing MySale customer base. There are good
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 development of its product licensing capability will
lead to significant opportunities to generate incremental revenue
in the medium term.
The integration of the Identity Direct business is ahead of plan
and, with property and resources now rationalised, cost savings and
synergies will accrue to the group in the current year. Operational
integration will be complete shortly allowing the group to
capitalise on the fourth calendar quarter when Identity Direct
generates around 60% of its annual revenues. This is the second
integration to our platform undertaken in the last two years and
the positive results give the group confidence it can successfully
execute further, larger integrations in the future.
Australia & New Zealand (ANZ)
Within this operating territory the group has continued to
successfully implement its strategic initiatives and delivered much
improved gross profit, up by 15% to A$65.6 million (FY16: A$57.1
million) and gross margin to 29.6% (FY16: 27.1%) whilst also
growing revenue by 5% to A$221.5 million (FY16: 210.7 million). The
significant increase in AOV to c. $85 achieved in FY16 has been
maintained by continued focus on a localised offer with strong
merchandising, pricing and overall ANZ customer proposition.
As noted above the group's nascent retail marketplace was
launched in ANZ at the end of the prior year and is an opportunity
to significantly increase the group's addressable market in the
region. To date the group has already seen in excess of 500
suppliers join this marketplace. The first flagship retailer to
join this marketplace, as a 3P vendor, was Sports Direct and they
are now fully integrated to the group's platform allowing our ANZ
team to efficiently market and merchandise the 150,000 products
available. The sporting goods market in ANZ is estimated to be
worth in excess of A$3 billion annually and the strong value offer
provided by Sports Direct combined with group's experience in
connecting customers with brands is anticipated to create a
compelling proposition in this vertical in the medium term.
The group is one of the pre-eminent online, off-price retailers
in ANZ and has further attractive growth possibilities due to both
the lower levels of internet penetration, in comparison to
territories such as the United Kingdom and the USA, and this
region's relative lack of off-price retailers. In ANZ the group has
a small network of physical outlets which is used both to clear the
group's own surplus inventory and test brands and products in that
offline channel.
The group is actively looking 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 South-East Asia had revenue growth of 7% to
A$33.8 million (FY16: A$31.6 million) and a corresponding 7%
increase in gross profit to A$8.1 million (FY16: A$7.5 million). On
a CER basis the underlying revenue growth was 11%. The continued
growth in revenue and profitability has been driven by the group's
localisation plan which ensures that merchandising, pricing,
payment and shipping solutions are all tailored to the needs of
local consumers.
Here the strategy has been to grow the active customer base, so
acquisition marketing is a priority, to build gross profitability
and then leverage this increasing scale to use resources more
efficiently and achieve lower shipping rates. With a more
profitable local model now established and first mover advantage
South-East Asia is an important element of the group's long-term
profitable growth.
In the medium to long term this region is anticipated to be
increasingly significant as the group grows its customer base and
demand for branded products, particularly European and USA brands,
continues to increase. With a substantial addressable population,
increasing disposable income, lack of off-price competition and
high mobile penetration this region is well served by the group's
strong value, branded sales offer and exceptional mobile commerce
capability.
Rest of World
This territory comprises the group's operations within the
United Kingdom, which trade predominately under the Cocosa brand,
relaunched in FY15, which provides customers with compelling value
in premium branded products.
The United Kingdom had a good year, as revenue increased by more
than 30%, thereby achieving revenue of A$13.1 million (FY16: A$10.0
million). On a CER basis the underlying revenue growth was 59%.This
growth was underpinned by increased numbers of active customers
which is our key objective in a newer territory. Gross margin was
lower than the previous year as the group used products and pricing
as promotional tools to develop the customer base. This form of
promotion is used by the group much more in an early stage
territory than in established territories.
These are encouraging results and position the business for
further growth in the current financial year. Whilst currently a
relatively small part of the group's overall activities, this
business operates in the UK's large and well developed online
marketplace where engaged and active consumers can be acquired
successfully and cost effectively. Given there is no online flash
sale operator of scale in the UK the group has targeted becoming a
leading operator in the country.
The group has a material presence in the UK as it an important
centre for the group's product sourcing team for both UK and
European brands. Brands from these territories, along with USA,
have grown their weighting within group revenues over the past few
years and now account for over half worldwide revenue.
Outlook
The group had an excellent FY17 with significantly improved
financial performance and great progress against our strategic
goals. Increasing numbers of active customers are driving revenue
and efficiency forward.
We have a unique set of brand partners which in turn means that
we are able to offer our loyal customers access to a fantastic
range of goods and products. When this is combined with our
flexible and efficient business platform it gives customers an
easy-to-use, compelling value, shopping experience.
The group has carried good momentum into the current year and
built on the excellent foundations and initiatives put in place
last year. This year has started well with revenue growth
accelerating from last year and strong growth in underlying
profitability. Whilst our peak trading period is still ahead of us
the board has confidence in the current year's prospects and
expects that underlying EBITDA for the year will be at least in
line with the upper end of market expectations.
_____________________________
Carl Jackson
Chief Executive Officer
25 September 2017
Financial review by the Chief Financial Officer
Revenue and Gross Profit
For the year ended 30 June 2017 group revenue increased by 6% to
A$268.4 million (FY16: A$252.3 million) and gross profit increased
faster, by 14%, to reach A$76.0 million (FY16: A$66.7 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 higher, at 9% and 16% respectively, reflecting
the strengthening of the group's reporting currency AUD during the
year.
Operating Expenses
The increase in activity and gross profit led underlying
operating expenses to increase 10% to A$67.4 million (FY16: A$61.2
million) in the period. During the year the group increased staff
resources in a number of operational departments to support further
growth and ensure the group delivers outstanding service to its
customers. This increase included a number of key hires within the
senior management team.
Profit/Loss before Tax
The underlying profit before tax for the year is A$3.3 million
(FY16: A$1.1 million) and the reported loss before tax for the
period is A$1.5 million (FY16: A$0.2 million profit). This reported
loss is after the inclusion of a number of one-off and non-cash
items which are shown in more detail in note 6 to the financial
statements in order to provide greater insight as to the underlying
profitability of the group.
Profit/Loss after Tax and earnings per share
The underlying profit after tax for the year is A$3.9 million
(FY16: A$0.6 million) and the reported loss after tax for the
period is $A1.0 million (FY16: A$0.2 million). This reported loss
is after the inclusion of a number of one-off and non-cash items
which are shown in more detail in note 6 to the financial
statements in order to provide greater insight as to the underlying
profitability of the group.
Note 27 shows the detailed calculations of basic earnings per
share for the financial year which increased by 500% to 2.5 cents
per share (FY16: 0.4 cents) on an underlying basis and was 0.6
cents loss (FY16: 0.1 cents loss) on a reported basis.
Taxation
The group has recorded a tax benefit of A$0.6 million for the
year (FY16: tax expense of A$0.4 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 9 to the financial statements. The group has total tax losses
of A$30 million (FY16: A$31 million) with the majority located in
Australia. The entire tax loss has been recognised with the
provision of a deferred tax asset of A$10.5 million (FY16: A$10.3
million).
Balance Sheet, Cash and Working Capital
The group's closing cash balance was A$19.0 million (FY16:
A$34.0 million) and the net cash balance was A$8.9 million (FY16:
A$27.5 million).
The closing cash balance reflects a number of significant
working capital outflows which occurred towards the end of the
financial year which are temporary in nature and will reverse in
the following period. The group's strategic plan allows for
selective investment into inventory balances and other working
capital deployments to ensure the group is able to take advantage
of commercially beneficial opportunities. The group anticipates
that working capital balances will normally lie between 1-3% of
annual revenue.
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$8.5 million
(FY16: A$4.0 million).
During the period the group's acquisition activity was focused
around the purchase of Identity Direct, a personalisation business,
for consideration of A$2.9 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$13.1 million. In addition the group has
finance facilities of A$0.2 million with ANZ Bank. All facilities
are renewed on an annual basis.
Underlying Basis
As noted above the group manages its operations by looking at
the underlying EBITDA which excludes the impact of a number of
one-off and non-cash items of a non-trading nature as this, in the
Board's opinion, provides a more representative measure of the
group's performance. A reconciliation between reported profit
before tax and underlying EBITDA is included at note 6 to the
financial statements and outlined below.
A$ million FY17 FY16
Reported EBITDA 3.8 4.6
Share based payments 1.1 0.4
Discontinued activities 0.3 0.3
One-off costs 2.4 2.0
Unrealised foreign exchange gain / (loss) 1.0 (1.8)
4.8 0.9
Underlying EBITDA 8.7 5.5
Depreciation & Amortisation 5.3 4.4
Net interest expense 0.1 (0.0)
Underlying profit before tax 3.3 1.1
------ ------
Reported profit / (loss) before tax (1.5) 0.2
====== ======
Included within one-off items acquisition expenses,
post-acquisition reorganisation costs, charges arising from system
migration and IPO costs.
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), average revenue
per active customer (RPAC), and underlying EBITDA.
_____________________________
Andrew Dingle
Chief Financial Officer
25 September 2017
Note 2017 2016
A$'000 A$'000
Revenue
Revenue from sale of goods 4 268,387 252,289
Cost of sale of goods (192,344) (185,633)
Gross profit 76,043 66,656
--------- ---------
Other operating (loss)/gains, net 5(1,334) 2,173
Finance income 105 125
Finance costs 7 (223) (97)
Finance (costs)/income, net (118) 28
Expenses
Selling and distribution expenses (44,040) (37,460)
Administration expenses (32,109) (31,126)
Share of loss of joint venture - (104)
-------- --------
(Loss)/profit before income tax benefit/(expense) (1,558) 167
Income tax benefit/(expense) 9576 (364)
--- -----
Loss after income tax benefit/(expense) for the year (982) (197)
Other comprehensive income
Items that may be reclassified subsequently to profit
or loss
Net change in the fair value of cash flow hedges taken
to equity, net of tax 23 259 (1,068)
Foreign currency translation 23 (1,751) (2,161)
------- -------
Other comprehensive income for the year, net of tax (1,492) (3,229)
------- -------
Total comprehensive income for the year (2,474) (3,426)
======= =======
Loss for the year is attributable to:
Non-controlling interest - (20)
Owners of MySale Group Plc (982) (177)
----- -----
(982) (197)
===== =====
Total comprehensive income for the year is attributable
to:
Non-controlling interest - (20)
Owners of MySale Group Plc (2,474) (3,406)
(2,474) (3,426)
======= =======
Cents Cents
Basic earnings per share 27 (0.65) (0.12)
Diluted earnings per share 27 (0.65) (0.12)
Note 2017 2016
A$'000 A$'000
Assets
Current assets
Cash and cash equivalents 10 19,027 34,005
Trade and other receivables 11 16,951 9,058
Inventories 12 38,042 35,473
Other 13 4,949 7,973
Total current assets 78,969 86,509
-------- ----------
Non-current assets
Property, plant and equipment 14 2,711 2,226
Intangibles 15 35,572 29,765
Deferred tax 16 10,544 10,295
Total non-current assets 48,827 42,286
-------- ----------
Total assets 127,796 128,795
-------- ----------
Liabilities
Current liabilities
Trade and other payables 17 28,586 29,548
Borrowings 18 10,014 6,476
Derivative financial instruments 788 1,047
Income tax payable 193 1,104
Provisions 19 2,283 2,163
Deferred revenue 10,222 11,677
Total current liabilities 52,086 52,015
------ ------
Non-current liabilities
Borrowings 20 143 -
Provisions 21 332 368
Total non-current liabilities 475 368
------ ------
Total liabilities 52,561 52,383
------ ------
Net assets 75,235 76,412
====== ======
Equity
Share premium account 306,363 306,363
Other reserves 23 (125,958) (125,763)
Accumulated losses (105,150) (104,168)
Equity attributable to the owners of MySale Group
Plc 75,255 76,432
Non-controlling interests (20) (20)
Total equity 75,235 76,412
========= =========
The financial statements of MySale Group Plc (company number 115584) were
approved by the Board of Directors and authorised for issue on 25 September
2017. They were signed on its behalf by:
___________________________ ___________________________
Carl Jackson Andrew Dingle
Director Director
Share
premium Other Accumulated Non-controlling
Total
account reserves losses interest equity
A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1
July 2015 306,363 (122,931) (103,991) - 79,441
Loss after
income tax
expense
for the year - - (177) (20) (197)
Other
comprehensive
income for
the year, net
of tax - (3,229) - - (3,229)
Total
comprehensive
income for
the year - (3,229) (177) (20) (3,426)
Transactions
with owners in
their capacity
as owners:
Share-based
payments (note
23) - 397 - - 397
Balance at 30
June 2016 306,363 (125,763) (104,168) (20) 76,412
========= ========= =========== =============== =========
Share
premium Other Accumulated Non-controlling
Total
account reserves losses interest equity
A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1
July 2016 306,363 (125,763) (104,168) (20) 76,412
Loss after
income tax
benefit
for the year - - (982) - (982)
Other
comprehensive
income for
the year, net
of tax - (1,492) - - (1,492)
Total
comprehensive
income for
the year - (1,492) (982) - (2,474)
Transactions
with owners in
their capacity
as owners:
Share-based
payments (note
23) - 1,297 - - 1,297
Balance at 30
June 2017 306,363 (125,958) (105,150) (20) 75,235
========= ========= =========== =============== =========
Note 2017 2016
A$'000 A$'000
Cash flows from operating activities
(Loss)/profit before income tax benefit/(expense)
for the year (1,558) 167
Adjustments for:
Depreciation and amortisation 5,275 4,383
Net loss/(gain) on disposal of property, plant and
equipment (15) 30
Share of loss - joint ventures - 104
Interest income (105) (125)
Interest expense 223 97
3,820 4,656
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables (7,893) 14,167
Increase in inventories (2,529) (17,593)
Decrease/(increase) in other operating assets 3,190 (3,153)
Increase/(decrease) in trade and other payables (1,167) 155
Increase in other provisions 1,207 486
(Decrease)/increase in deferred revenue (1,455) 530
(4,827) (752)
Interest received 105 125
Interest paid (223) (97)
Income taxes (paid)/refunded (575) 832
Net cash from/(used in) operating activities (5,520) 108
-------- ----------
Cash flows from investing activities
Payment for purchase of business, net of cash acquired (3,090) (5,300)
Payments for property, plant and equipment 14 (1,184) (782)
Payments for intangibles 15 (7,308) (3,248)
Payments for security deposits - (120)
Proceeds from disposal of property, plant and equipment 68 153
Proceeds from disposal of intangibles - 8
Proceeds from release of security deposits 103 -
Net cash used in investing activities (11,411) (9,289)
-------- -------
Cash flows from financing activities
Proceeds from borrowings 13,234 9,089
Repayment of borrowings (9,671) (3,775)
Repayments of leases (28) (91)
Additional lease finance 146 -
Net cash from financing activities 3,681 5,223
------- -------
Net decrease in cash and cash equivalents (13,250) (3,958)
Cash and cash equivalents at the beginning of the
financial year 34,005 39,853
Effects of exchange rate changes on cash and cash
equivalents (1,728) (1,890)
Cash and cash equivalents at the end of the financial
year 10 19,027 34,005
======== =======
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 and generally rounded
to the nearest thousand.
The principal business of the group is the operating of online shopping
outlets for consumer goods like 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
(Alternate 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 Unit 5, 111
Old Pittwater Road, Brookvale, NSW 2100, Australia.
The financial statements were authorised for issue, in accordance with a
resolution of directors, on 25 September 2017. The directors have the power
to amend and reissue the financial statements.
Note 2. Significant accounting policies
Basis of preparation
This condensed consolidated financial information for the year
ended 30 June 2017 has been prepared in accordance with the
recognition and measurement criteria of International Financial
Reporting Standards as adopted by the European Union ("Adopted
IFRSs"), IFRS IC Interpretations and the Companies (Jersey) Law
1991.
The financial information contained in this preliminary
announcement for the years ended 30 June 2017 and 30 June 2016 does
not comprise the group's statutory financial statements within the
meaning of Companies (Jersey) Law 1991. Statutory accounts for the
year ended 30 June 2017 will be filed with the Jersey Companies
Registry in due course. The auditors' report on the statutory
accounts for each of the years ended 30 June 2017 and 30 June 2016
is unqualified, does not draw attention to any matters by way of
emphasis and does not contain any statement under any matters that
are required to be reported by exception under Companies (Jersey)
Law 1991.
Going concern
The directors have reviewed the group's forecast and
projections, including assumptions concerning capital expenditure
and expenditure commitments and their impact on cash flows, and
have a reasonable expectation that the group has adequate financial
resources to continue its operations for the foreseeable future.
For this reason they have continued to adopt the going concern
basis in preparing the financial statements.
In preparing the preliminary announcement, the directors have
also made reasonable and prudent judgements and estimates and
prepared the preliminary announcement on the going concern basis.
The preliminary announcement and strategic report contained herein
give a true and fair view of the assets, liabilities, financial
position and profit and loss of the group.
Changes to accounting standards
There have been no changes to accounting standards during the
year which have had or are expected to have any significant impact
on the group.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make
judgements, estimates and assumptions that affect the reported amounts in
the financial statements. Management continually evaluates its judgements
and estimates in relation to assets, liabilities, contingent liabilities,
revenue and expenses. Management bases its judgements, estimates and assumptions
on historical experience and on other various factors, including expectations
of future events, management believes to be reasonable under the circumstances.
The resulting accounting judgements and estimates will seldom equal the
related actual results. The judgements, estimates and assumptions that have
a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities (refer to the respective notes) within the next
financial year are discussed below.
------------------------------------------------------------------------------------------------
Provision for obsolete and slow moving inventories
The provision for obsolete and slow moving inventories assessment requires
a degree of estimation and judgement. The level of the provision is assessed
by taking into account the recent sales experience, the ageing of inventories
and other factors that affect inventory obsolescence.
Estimation of useful lives of assets
The group determines the estimated useful lives and related depreciation
and amortisation charges for its property, plant and equipment and finite
life intangible assets. The useful lives could change significantly as a
result of technical innovations or some other event. The depreciation and
amortisation charge will increase where the useful lives are less than previously
estimated lives, or technically obsolete or non-strategic assets that have
been abandoned or sold will be written off or written down.
Goodwill
The group tests annually, or more frequently if events or changes in circumstances
indicate impairment, whether goodwill has suffered any impairment, in accordance
with the accounting policy stated in note 2. The recoverable amounts of
cash-generating units have been determined based on value-in-use calculations.
These calculations require the use of assumptions, including estimated discount
rates based on the current cost of capital and growth rates of the estimated
future cash flows. No impairment charge was required in 2017 (2016: A$nil).
Impairment of non-financial assets
The group assesses impairment of non-financial assets at each reporting
date by evaluating conditions specific to the group and to the particular
asset that may lead to impairment. If an impairment trigger exists, the
recoverable amount of the asset is determined. This involves fair value
less costs of disposal or value-in-use calculations, which incorporate a
number of key estimates and assumptions.
Income tax
The group is subject to income taxes in the jurisdictions in which it operates.
Significant judgement is required in determining the provision for income
tax. There are many transactions and calculations undertaken during the
ordinary course of business for which the ultimate tax determination is
uncertain. The group recognises liabilities for anticipated tax audit issues
based on the group's current understanding of the tax law. Where the final
tax outcome of these matters is different from the carrying amounts, such
differences will impact the current and deferred tax provisions in the period
in which such determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences
only if the group considers it is probable that future taxable amounts will
be available to utilise those temporary differences and losses.
Note 4. 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.
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.
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 countries website. Similar types of goods are sold
in all segments. The group's operations are unaffected by seasonality.
Intersegment transactions
Intersegment transactions were made at market rates and are eliminated on
consolidation.
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 balance sheet for group
assets and liabilities.
Major customers
During the year ended 30 June 2017 there were no major customers (2016:
none). A customer is considered major if its revenues are 10% or more of
the group's revenue.
Operating segment information
Australia Rest of
and South-East the
New Zealand Asia world Total
- 2017 A$'000 A$'000 A$'000 A$'000
Revenue
Sales to external customers 221,451 33,806 13,130 268,387
Total revenue 221,451 33,806 13,130 268,387
----------- ---------- ------- --------
Gross profit 65,662 8,058 2,323 76,043
----------- ---------- -------
Other operating (loss)/gains, net (1,334)
Selling and distribution expenses (44,040)
Administration expenses (32,109)
Finance income 105
Finance costs (223)
Loss before income tax benefit (1,558)
Income tax benefit 576
--------
Loss after income tax benefit (982)
--------
Australia Rest of
and South-East the
New Zealand Asia World Total
- 2016 A$'000 A$'000 A$'000 A$'000
Revenue
Sales to external customers 210,710 31,590 9,989 252,289
Total revenue 210,710 31,590 9,989 252,289
----------- ---------- ------- --------
Gross profit 57,060 7,546 2,050 66,656
----------- ---------- -------
Other operating gains, net 2,173
Selling and distribution expenses (37,460)
Administration expenses (31,126)
Finance income 125
Finance costs (97)
Share of loss of joint venture (104)
Profit before income tax expense 167
Income tax expense (364)
--------
Loss after income tax expense (197)
--------
Note 5. Other operating (loss)/gains, net
2017 2016
A$'000 A$'000
Net foreign exchange (loss)/gain (1,425) 2,177
Net gain on disposal of property, plant and equipment 15 19
Other income/(expense) 76 (23)
Other operating (loss)/gains, net (1,334) 2,173
======= ======
Note 6. EBITDA reconciliation (earnings before interest, taxation, depreciation
and amortisation)
2017 2016
A$'000 A$'000
EBITDA reconciliation
(Loss)/profit before income tax (1,558) 167
Add: Share of loss of joint venture - 104
Less: Interest income (105) (125)
Add: Interest expense 223 97
Add: Depreciation and amortisation 5,275 4,383
EBITDA 3,835 4,626
======= ======
Underlying EBITDA represents EBITDA adjusted for one-off, non-trading items.
2017 2016
A$'000 A$'000
Underlying EBITDA reconciliation
EBITDA 3,835 4,626
Share-based payments 1,132 397
Reorganisation and discontinued operations 320 265
One-off costs of non-trading, non-recurring nature including
IPO and acquisition expenses 2,434 1,997
Unrealised foreign exchange loss/(gain) 953 (1,819)
------ -------
Total one-off, non-trading items 4,839 840
Underlying EBITDA 8,674 5,466
====== =======
Note 7. Expenses
2017 2016
A$'000 A$'000
(Loss)/profit before income tax includes the following
specific expenses:
Sales, distribution and administration expenses:
Staff costs (note 8) 34,254 29,716
Marketing expenses 18,119 16,714
Occupancy costs 5,575 5,617
Merchant and other professional fees 5,764 5,936
Depreciation and amortisation 5,275 4,383
Other administration costs 7,162 6,220
Total sales, distribution and administration expenses 76,149 68,586
Underlying operating expenses
Total sales, distribution and administration expenses 76,149 68,586
Add: Realised foreign currency loss/(gain) 472 (359)
Add: Other (expense)/income (76) 23
Add: Gain on disposal of fixed assets (15) (19)
Less: Share-based payments, one-off costs and reorganisation
and discontinued operations (3,886) (2,559)
Less: Depreciation and amortisation (5,275) (4,383)
Less: Share of loss in joint venture - (104)
------- -------
Total underlying operating expenses 67,369 61,185
-------
Finance costs
Interest and finance charges paid/payable 223 97
Occupancy costs include:
Minimum operating lease payments 4,568 4,372
Cost of inventories recognised as an expense in 'cost
of sales' in profit or loss 152,426 149,297
------- -------
Note 8. Staff costs
2017 2016
A$'000 A$'000
Aggregate remuneration:
Wages and salaries 27,064 24,463
Social security costs 2,380 2,095
Long term employee incentive plan 1,297 397
Other staff costs and benefits 3,513 2,761
Total staff costs 34,254 29,716
====== ======
2017 2016
The average monthly number of employees (including executive
directors and those on a part-time basis) was:
Sales and distribution 363 357
Administration 181 186
544 543
==== ====
Details of directors' remuneration and interests are provided in the audited
section of the Directors' remuneration report and should be regarded as
part of these financial statements.
Note 9. Income tax (benefit)/expense
2017 2016
A$'000 A$'000
Income tax (benefit)/expense
Current tax 624 759
Deferred tax - origination and reversal of temporary differences (397) (413)
Adjustment recognised for prior years (803) 18
Aggregate income tax (benefit)/expense (576) 364
Deferred tax included in income tax (benefit)/expense
comprises:
Increase in deferred tax assets (note 16) (397) (413)
Numerical reconciliation of income tax (benefit)/expense
and tax at the statutory rate
(Loss)/profit before income tax benefit/(expense) (1,558) 167
Tax at the statutory tax rate of 30% (467) 50
Effect of overseas tax rates 183 -
Tax effect amounts which are not deductible/(taxable)
in calculating taxable income:
Non-deductible expenses 22 218
Tax-exempt income - (26)
Current year tax losses not recognised - 58
Change in recognised deductible temporary difference 489 -
Adjustment recognised for prior years (803) 64
Income tax (benefit)/expense (576) 364
======= ======
The tax rates of the main jurisdictions are Australia 30% (2016: 30%), Singapore
17% (2016: 17%), New Zealand 28% (2016: 28%), United Kingdom 20% (2016:
20%) and United States 42.8% (2016: 42.8%).
Note 10. Current assets - cash and cash equivalents
2017 2016
A$'000 A$'000
Cash at bank 12,314 28,805
Bank deposits at call 6,713 5,200
19,027 34,005
====== ======
Note 11. Current assets - trade and other receivables
2017 2016
A$'000 A$'000
Trade receivables 16,800 9,058
Less: Provision for impairment of receivables (86) -
16,714 9,058
Other receivables 237 -
16,951 9,058
====== ======
Trade receivables include uncleared cash receipts due from online customers
which amounted to A$2,515,000 (2016: A$2,473,000).
Note 12. Current assets - inventories
2017 2016
A$'000 A$'000
Goods for resale 35,403 35,395
Obsolete and slow moving inventory provision (895) (456)
34,508 34,939
Stock in transit 3,534 534
38,042 35,473
====== ======
Write-downs of inventories to net realisable value recognised as an expense
during the year ended 30 June 2017 amounted to A$281,000 (2016: A$789,000).
This expense has been included in 'cost of sales' in profit or loss.
Note 13. Current assets - other
2017 2016
A$'000 A$'000
Prepayments 1,419 984
Prepaid inventory 3,030 6,271
Other deposits 333 435
Other current assets 167 283
4,949 7,973
====== ======
Prepaid inventory relates to the costs of goods for resale that have been
paid for by the group but not delivered to its distribution centres for
further dispatch to the customers who placed the orders as at the reporting
date. The corresponding cash received in advance from customers are accounted
for within deferred revenue category in the balance sheet which includes
the total amount of cash received for the goods not delivered to customers
at the reporting date.
Note 14. Non-current assets - property, plant and equipment
Reconciliations
Reconciliations of the written down values at the beginning and end of the
current and previous financial year are set out below:
Leasehold Plant and Fixtures Motor
improvements equipment and fittings vehicles Total
A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1 July
2015 379 2,058 380 206 3,023
Additions 71 427 284 - 782
Disposals (4) (74) (3) (102) (183)
Exchange differences (4) (30) (11) (5) (50)
Depreciation expense (233) (914) (153) (46) (1,346)
Balance at 30 June
2016 209 1,467 497 53 2,226
Additions 477 154 306 286 1,223
Additions through
business
combinations - 489 - - 489
Disposals (7) (5) (12) (25) (49)
Exchange differences (3) (37) (1) - (41)
Depreciation expense (169) (729) (189) (50) (1,137)
Balance at 30 June
2017 507 1,339 601 264 2,711
============ ========= ============ ======== =======
Note 15. Non-current assets - intangibles
Reconciliations
Reconciliations of the written down values at the beginning and end of the
current and previous financial year are set out below:
Customer ERP
Goodwill relationships Software system Total
A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1 July 2015 16,849 1,529 2,912 2,227 23,517
Additions - - 2,408 840 3,248
Additions through business
combinations 4,655 1,495 - - 6,150
Disposals - - (8) - (8)
Exchange differences - (94) (11) - (105)
Amortisation expense - (954) (1,385) (698) (3,037)
Balance at 30 June 2016 21,504 1,976 3,916 2,369 29,765
Additions - - 6,851 492 7,343
Additions through business
combinations 2,515 124 - - 2,639
Disposals - - (3) - (3)
Exchange differences - (33) (9) 8 (34)
Amortisation expense - (1,141) (2,133) (864) (4,138)
Balance at 30 June 2017 24,019 926 8,622 2,005 35,572
======== ============= ======== ====== =======
Amortisation expense is included in 'administration expenses' in profit
or loss.
Note 16. Non-current assets - deferred tax
2017 2016
A$'000 A$'000
Deferred tax asset comprises temporary differences attributable
to:
Amounts recognised in profit or loss:
Tax losses 8,876 9,324
Accrued expenses 485 701
Provisions 784 847
Sundry 673 269
Property, plant and equipment 4 (253)
Intangibles (278) (593)
Deferred tax asset 10,544 10,295
Movements:
Opening balance 10,295 10,320
Credited to profit or loss (note 9) 397 413
Additions through business combinations - (360)
Exchange loss (148) (78)
Closing balance 10,544 10,295
====== ======
Deferred income tax assets are recognised for tax losses, non-deductible
accruals and provisions and capital allowances carried forward to the extent
that realisation of the related tax benefits through future taxable profits
is probable.
Note 17. Current liabilities - trade and other payables
2017 2016
A$'000 A$'000
Trade payables 23,460 22,464
Other payables and accruals 4,450 6,168
Payable to other related party 58 50
Sales tax payable 618 866
28,586 29,548
====== ======
Note 18. Current liabilities - borrowings
2017 2016
A$'000 A$'000
Bank loans 5,200 5,200
Bank loans under interchangeable facilities including
letters of credit 4,775 1,212
Finance lease liability 39 64
10,014 6,476
====== ======
Refer to note 20 for further information on assets pledged as security and
financing arrangements.
Note 19. Current liabilities - provisions
2017 2016
A$'000 A$'000
Employee benefits provision 1,115 770
Lease make good provision 173 182
Gift voucher provision 433 699
Sales returns provision 562 512
2,283 2,163
====== ======
Note 20. Non-current liabilities - borrowings
2017 2016
A$'000 A$'000
Finance lease liability 143 -
====== ======
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
2017 2016
A$'000 A$'000
Bank loans 5,200 5,200
Bank loans under interchangeable facilities including
letters of credit 4,775 1,212
Finance lease liability 182 64
10,157 6,476
====== ======
Note 21. Non-current liabilities - provisions
2017 2016
A$'000 A$'000
Employee benefits provision 332 368
====== ======
Note 22. Equity - share capital
2017 2016 2017 2016
Shares Shares A$'000 A$'000
Ordinary shares GBPnil each (2016:
GBPnil)
- issued and fully paid 151,331,652 151,331,652 - -
=========== =========== ====== ======
Authorised share capital
200,000,000 (2016: 200,000,000) ordinary shares of GBPnil each.
Note 23. Equity - other reserves
2017 2016
A$'000 A$'000
Foreign currency reserve 2,187 3,938
Hedging reserve - cash flow hedges (788) (1,047)
Share-based payments reserve 5,399 4,102
Capital reorganisation reserve (132,756) (132,756)
(125,958) (125,763)
========= =========
Movements in reserves
Movements in each class of reserve during the current and previous financial
year are set out below:
Foreign Share-based Capital
currency Hedging payments reorganisation Total
A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1 July
2015 6,099 21 3,705 (132,756) (122,931)
Foreign currency
translation (2,161) - - - (2,161)
Cash flow hedge - (1,068) - - (1,068)
Share-based
payments - - 397 - 397
Balance at 30 June
2016 3,938 (1,047) 4,102 (132,756) (125,763)
Foreign currency
translation (1,751) - - - (1,751)
Cash flow hedge - 259 - - 259
Share-based
payments - - 1,297 - 1,297
Balance at 30 June
2017 2,187 (788) 5,399 (132,756) (125,958)
======== ======= =========== ============== =========
Note 24. Equity - dividends
There were no dividends paid, recommended or declared during the current
or previous financial year.
Note 25. Contingent liabilities
The group has reduced its bank guarantees issued by ANZ Bank Limited ('ANZ'),
in respect of lease obligations amounting to A$nil (2016: A$874,000).
The group also issued a bank guarantee through its banker ANZ Bank New Zealand
Limited, in respect of customs and duties obligations amounting to NZ$150,000
(2016: NZ$150,000) and lease obligations to NZ$nil (2016: NZ$22,000).
The group issued bank guarantees through its banker, Hong Kong and Shanghai
Banking Corporation ('HSBC'), in respect of lease obligations amounting
to A$979,000 (2016: A$nil).
Note 26. Commitments
2017 2016
A$'000 A$'000
Lease commitments - operating
Committed at the reporting date but not recognised as
liabilities, payable:
Within one year 3,324 3,494
One to five years 9,138 10,167
12,462 13,661
Lease commitments - finance
Committed at the reporting date and recognised as liabilities,
payable:
Within one year 51 65
One to five years 149 -
Total commitment 200 65
Less: Future finance charges (18) (1)
Net commitment recognised as liabilities 182 64
Representing:
Finance lease liability - current (note 18) 39 64
Finance lease liability - non-current (note 20) 143 -
182 64
Sub-lease receivable - operating
Committed at the reporting date but not recognised as
assets, receivables:
Within one year 269 559
One to five years 289 585
558 1,144
====== ======
The group leases office space, land and buildings and warehouses from non-related
parties under non-cancellable operating lease agreements. The leases have
varying terms, escalation clauses and renewal rights.
The group leases certain plant and equipment, and motor vehicles from non-related
parties under finance leases. The lease agreements do not have renewal clauses
but provide the group with options to purchase the leased assets at nominal
values at the end of the lease term.
The carrying amounts of plant and equipment and motor vehicles held under
finance leases are A$nil (2016: A$29,000) and A$182,000 (2016: A$35,000)
respectively at the reporting date.
The company also subleases some of its office and warehouse space to related
and non-related parties. The subleases have varying terms and expiry dates.
Note 27. Earnings per share
2017 2016
A$'000 A$'000
Loss after income tax (982) (197)
Non-controlling interest - 20
Loss after income tax attributable to the owners of MySale
Group Plc (982) (177)
Add back items of a one-off, non-trading nature (note
6) 4,839 840
Underlying profit after income tax attributable to the
owners of MySale Group Plc 3,857 663
----------- -----------
Number Number
Weighted average number of ordinary shares used in
calculating
basic earnings per share 151,331,652 151,331,652
Weighted average number of ordinary shares used in
calculating
diluted earnings per share 151,331,652 151,331,652
=========== ===========
Cents Cents
Basic earnings per share (0.65) (0.12)
Diluted earnings per share (0.65) (0.12)
Underlying earnings per share 2.50 0.40
8,615,909 (2016: 5,539,326) employee long term incentives have been excluded
from the 2017 (2016) diluted earnings calculation as they are anti-dilutive
for the year.
Note 28. Share-based payments
The company established two new employee share plans prior to the AIM admission;
(1) the Executive Incentive Plan ('EIP') and (2) the Loan Share Plan ('LSP').
In accordance with the terms of each plan 100% of the ordinary shares will
vest three years from grant date subject to the achievement of the Underlying
Earnings Before Interest, Tax, Depreciation and Amortisation ('EBITDA')
included in the company's internal forecasts set by the Board in the year
of the grant.
In July 2015, 3,000,000 options over the ordinary share capital of the company
were granted to the Chairman with an exercise price of GBP0.53. 1,000,000
options will vest when the company's share price reaches GBP1.50, a further
1,500,000 shall vest when the company's share price reaches GBP2.26 and
a further 500,000 shall vest when the company's share price reaches GBP2.75.
The options expire five years after the grant date. Other than the vesting
conditions, all other terms are the same as the EIP. The fair value of the
accounting expense in relation to these options are recognised over the
vesting period.
Set out below are summaries of share and options granted under the plans
for directors and employees:
2017
Balance Balance
at Expired/ at
the start the end
Exercise of forfeited/ of
Grant date Expiry date price the year Granted Exercised other the year
16/06/2019
28/05/2014 *** GBP2.26 111,499 - - - 111,499
18/08/2020
18/08/2015 *** GBP0.51 2,027,806 - - - 2,027,806
18/08/2020
18/08/2015 ** GBP0.51 400,021 - - - 400,021
27/07/2020
27/07/2015 *** GBP0.53 3,000,000 - - - 3,000,000
19/08/2021
19/08/2016 *** GBP0.65 - 1,959,599 - - 1,959,599
19/08/2021
19/08/2016 ** GBP0.65 - 1,116,984 - - 1,116,984
5,539,326 3,076,583 - - 8,615,909
--------- --------- --------- ---------- ---------
** EIP - Options
*** LSP
2016
Balance Balance
at Expired/ at
the
start the end
Exercise of forfeited/ of
the
Grant date Expiry date price year Granted Exercised other the year
16/06/2015
28/05/2014 * GBP0.00 684,042 - (684,042) - -
16/06/2019
28/05/2014 *** GBP2.26 111,499 - - - 111,499
18/08/2020
18/08/2015 *** GBP0.51 - 2,027,806 - - 2,027,806
18/08/2020
18/08/2015 ** GBP0.51 - 400,021 - - 400,021
27/07/2020
27/07/2015 *** GBP0.53 - 3,000,000 - - 3,000,000
795,541 5,427,827 (684,042) - 5,539,326
------- --------- --------- ---------- ---------
* EIP - Share rights
** EIP - Options
*** LSP
The weighted average remaining contractual life of the share plan outstanding
at the end of the financial year was 4 years (2016: 4 years).
The share-based payment expense for the year was A$1,297,000 (2016: A$397,000).
Note 29. Events after the reporting period
The group's borrowing facility with Hong Kong and Shanghai Banking Corporation
increased to $13,353,000 (previously $13,120,000) in July 2017. The facility
is secured by a Corporate Guarantee.
The group's borrowing facility with ANZ Bank Limited reduced to $174,000
(previously $11,576,000) in July 2017. The facility is secured by a term
deposit security.
All bank guarantees with ANZ were released in August 2017.
No other matter or circumstance has arisen since 30 June 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR KELFLDKFLBBK
(END) Dow Jones Newswires
September 26, 2017 02:01 ET (06:01 GMT)
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