TIDMMYSL
RNS Number : 7949G
MySale Group PLC
31 March 2022
MySale Group plc
("MySale" or "the Group")
Half Year Results
Strong GMV growth underpinned by the marketplace channel
MySale Group plc (AIM: MYSL), the leading international online
retailer, today announces its unaudited interim results for the six
months to 31 December 2021 (H1 FY22).
Kalman Polak, Chief Executive Officer of MySale, commented.
"We have made good operational progress in the last six months
as the new management team continues to scale our marketplace
platform, delivering GMV growth of 36%, despite reported revenue
declining by 6% as a result of the change in channel mix.
"We remain confident in the long term opportunity for the
business in Australia and New Zealand, where we have a significant
addressable market which we can access by expanding our unique
off-price proposition. At the same time, we are being disciplined
in the execution of the growth strategy and have implemented
several initiatives to support working capital, through careful
cost control and by reducing the amount of our own-stock inventory
in an orderly manner."
Financial Overview
-- Gross Merchandise Value (GMV) increased 36% to A$86.7m (H1
FY21: A$63.8m) reflecting the progress in scaling the Group's
off-price marketplace platform
-- Group Revenue decreased by 6% t o A$59.7m (H1 FY21: A$63.8m)
-- Continued improvement in gross margin to 42.3% (H1 FY21: 37.9%)
-- Gross Profit of A$25.3m (H1 FY21: A$24.2m)
-- Group cost base(1) increased by 13% to A$24.3m (H1 FY21: A$21.4m)
-- Fixed costs as a percentage of GMV reduced to 9.4% (H1 FY21: 9.7%)
-- Total costs as a percentage of GMV reduced to 28.0% (H1 FY21:
33.6%). Further costs reductions forecast in H2 FY22
-- Inventory balances A$6.1m (H1 FY21: A$2.6m), expected to reduce during H2 FY22
-- Net cash balance of A$3.8m (H1 FY21: A$15.8m).
-- Underlying EBITDA(2) of A$1.0m (H1 FY21: A$2.7m)
-- Loss before taxation of A$4.5 m (H1 FY21 A$1.0m)
Operational Overview
-- Continued improvement in scaling the marketplace channel
which represents 35% of GMV (H1 FY21: Nil)
-- Own stock (1P) revenue was A$23.9m representing 27.5% of total GMV
-- Opened Melbourne office to support the growth of Marketplace
-- Active suppliers increased to 1,097 (H1 FY21: 1,032)
-- Active customers increased by 14% to 618,000 (H1 FY21: 540,000)
Issue of Convertible Loan Notes
-- Today, the Group announced that it has raised A$2.3m in cash
through the issue and subscription of convertible loan notes ("Loan
Notes") to existing shareholders, including Carl Jackson (Executive
Chair) and Kalman Polak (Chief Executive Officer)
-- The Loan Notes have a maturity date of 30 April 2025 and are
convertible into ordinary shares of the Company at a conversion
price of 1.5 pence (or A$0.02625, with exchange rate fixed at
GBP:AUD rate of 1.75) per ordinary share
-- The net proceeds of the Loan Note issue will be used to fund
the continued development of the Group's marketplace technology
platform and general working capital
[1] Group cost base is the different between gross profit and underlying EBITDA
2 Underlying EBITDA is calculated as EBITDA adjusted for certain
items including impairment losses/reversals related to goodwill and
receivables, share-based payments, reorganisation costs, debt
forgiveness, one-off cost and unrealised foreign exchange
loss/gain. Refer to note 5 for reconciliation to reported loss.
Current Trading and Outlook
Revenues have remained subdued in Q3 due to the prevalence of
the Omicron variant in Australia and the knock-on effect to
consumer demand. In the ten weeks of trading in H2 FY22, GMV was
marginally ahead of prior year, whilst total revenue has continued
to be lower as a result of the changing channel mix
In light of these trading conditions, the Group's inventory
balances remain higher than anticipated and the subdued consumer
demand continues to place pressure on the cash resources of the
Group.
In response, the Group has implemented several initiatives to
support its working capital and is seeking to be disciplined in the
execution of its growth strategy and continue to right size its
cost base whilst reducing the amount of own-stock inventory in an
orderly manner. The Group has also raised A$2.3m in cash through
the issue of Loan Notes, with a view to supporting the Group's
balance sheet, to fund ongoing investment in the Group's
marketplace platform and for general working capital.
The information contained within this announcement is deemed by
the Group to constitute inside information as stipulated under the
Market Abuse Regulations (EU) No. 596/2014 ("MAR") as it forms part
of UK domestic law by virtue of the European Union (Withdrawal) Act
2018. Upon the publication of this announcement via a Regulatory
Information Service ("RIS"), this inside information is now
considered to be in the public domain. The person responsible for
this announcement is Carl Jackson, Executive Chairman.
Enquiries :
MySale Group plc
Carl Jackson, Executive Chairman +61 (0) 414 817 843
Kalman Polak, Chief Executive Officer +61 (0) 410 331 611
Singer Capital Markets (Nominated Adviser and Broker) +44 (0) 20 7496 3000
Mark Taylor
Justin McKeegan
MHP Communications (Financial PR Adviser) +44 (0) 20 3128 8570
Simon Hockridge Mysale@mhpc.com
Pete Lambie
About MySale
MYSALE is an online off-price, retail platform offering a large,
curated selection of branded fashion, beauty and homewares products
through three core websites and associated mobile applications,
including OZSALE.com.au, NZSALE.co.nz and SINGSALE.com.sg.
MYSALE provides a discovery based online shopping experience for
its customers. New sales events are offered daily with a curated
selection of branded products at discounted prices, typically in
limited quantities and for limited time periods, to seek to create
excitement for customers. MYSALE's suppliers are offered a suite of
inventory solutions to fulfil their demand for inventory management
and increase customer awareness of their brands and products.
Executive Chairman's statement
MySale is making operational progress in its strategy,
acknowledging current macro and consumer headwinds, following the
repositioning of the Group as an Off-Price Curated Retail Platform
focused firmly on the ANZ market with a clear and differentiated
proposition to suppliers and customers and execution of the ANZ
First strategy.
The Group operates across three categories, Fashion, Beauty and
Home offering our suppliers direct to customer solutions to
complement existing channels. For our customers, our ambition is to
be a trusted and exciting daily discovery-based shopping
destination for Off-Price Brand Fashion, Beauty and Homewares.
Marketplace
Marketplace GMV grew to A$30.6m (H1 FY21: Nil), which
represented 35.3% of Total GMV. We have recruited a high performing
team and opened a Melbourne office. During the period we had 362
active marketplace sellers (H1 FY21: 62) with continued positive
momentum expected for the rest of the financial year.
Own Stock
In parallel, we continue to scale our higher margin own stock
channel which delivered total revenue of A$23.9m (H1 FY20: A$9.5m),
representing 27.5% of Total Revenue and it is expected that to
remain at 27% by the end of FY22. During the period management took
the decision to invest in additional own-buy inventory. However,
the subdued demand and delays in stock deliveries prior to
Christmas meant that inventory build up to a higher level than
expected. As such, the inventory balance at 31 December 2021 was
A$6.1m (H1 FY21: A$2.6m). Post period end, management actions have
reduced inventory levels to A$5.5m.
Order After Sale
An established channel that provides a low-risk solution to
access a supplier's excess inventory. Total revenue declined to
A$32.2m (H1 FY21: A$54.3m) representing 37% of total GMV.
We continue to focus on better quality revenue, which has meant
being much stricter on which third-party sellers can trade on the
platform resulting in a 443-basis point improvement in gross margin
to 42.3% (H1 FY21: 37.9%).
COVID lockdowns in Q1 accelerated new customer acquisition and
repeat purchases with the transition out of lockdown delivering a
lower growth albeit from a higher base. During the period the cost
of acquisition(3) was $28.31 41.8% below last year (H1 FY21:
$48.66) which has continued into H2. This coincides with
improvements in ROI in paid marketing with margin ROAS(4) being
maintained at 1.39 throughout H1 (H1 FY21:1.0) There was an
increase in the number of orders and average order value as
customers spent across MySale's websites however average order
frequency decreased by 15.6% primarily because of the increase in
the growth of the marketplace channel.
The fixed cost base was A$8.1m (H1 FY21: A$6.2m) which
represented 9.4% of GMV during the period (H1 FY21: 9.7%).
Variable costs decreased to 18.7% of GMV (H1 FY21: 23.9%).
Whilst work to right size the Group's cost base continues, this did
mitigate the changing channel mix which resulted in a gross profit
of A$25.3m (H1 FY21: A$24.2m) and a reduction in Underlying EBITDA
to A$1m (H1 FY21: A$2.5m).
During the period, MySale withdrew its proposed listing on the
ASX and incurred several additional one-off costs as detailed in
note 5 below.
As at 31 December 2022, the Group had a net cash balance of
A$3.8m (H1 FY21: A$15.8m). The Group is utilising an invoice
financing facility with a third party as part of its mitigating
actions to support working capital.
As at 14 March 2022, the Group was operating on a bank debt-free
basis, albeit with the inventory financing facility in place with
balance of $0.9m. At the same time, the Group's gross and net cash
balances were A$1.5m and A$0.6m (after A$0.9m of invoice
financing)
ANZ First Strategy
We continue to progress our ANZ First Strategy. During the
period 72% of GMV was from our marketplace and Order After Sale
channel where we seek to take limited inventory risk and have a
negative working capital profile. During the period, we had 1,097
active third-party partners.
Issue of Convertible Loan Notes
Today, the Company announced it has raised A$2.3m in cash
through the issue and subscription of convertible loan notes ("Loan
Notes") to existing shareholders and new holders, including Carl
Jackson (Executive Chair) and Kalman Polak (Chief Executive
Officer).
The Loan Notes have a maturity date of 30 April 2025 and are
convertible into ordinary shares of the Company at a conversion
price of 1.5 pence per ordinary share, at the election of the Loan
Note holders, at any time prior to maturity. The Loan Notes may be
redeemed by the Group at any time prior to maturity, without
penalty. Interest will be payable at a rate of 7% per annum,
paid-in-kind in ordinary shares in the Group. The Group has
undertaken to exercise reasonable endeavours to procure that
appropriate security is granted by OzSale Pty Ltd (or any other
members of the Group), over the appropriate assets of the Group in
favour of Loan Note holders, as soon as reasonably practicable
following the issue of the Loan Notes.
As highlighted in these results and the Group's trading update
dated 15 February 2022, the Group has been operating in a difficult
trading environment, which has impacted the cash balance of the
Group. To ensure that the Group is able to continue to operate as a
going concern and advance its ANZ First Strategy, the net proceeds
of the Loan Note issue will be used to fund the continued
development of the Group's marketplace technology platform and
general working capital.
Current Trading and Outlook
Revenues have remained subdued in Q3 due to the prevalence of
the Omicron variant in Australia and the knock-on effect to
consumer demand levels. In the ten weeks of trading in H2 FY22, GMV
was marginally ahead of prior year whilst total revenue continued
to be lower as a result of the changing channel mix
In response, the Group is being disciplined and cautious in the
execution of its growth strategy and continues to seek to right
size its cost base, increasing revenue from its higher margin Order
After Sales channel and reducing the amount of own-stock inventory
in an orderly manner, by increasing the promotional mark-down
activity on the website and reducing the forward stock commitments.
As at 14 March 2022, inventory balances have reduced to A$5.5m (H1
FY22: A$6.1m) and are expected to further reduce to A$4.5m by the
year end. At the same time, the Group's gross and net cash balances
were A$1.5m and A$0.6m (after A$0.9m of invoice financing) (H1
FY22: A$3.8m). In addition to this invoice facility, the Group has
obtained further cash resource, having raised A$2.3m in cash
through the issue of Loan Notes, with a view to supporting the
Group's balance sheet, to fund ongoing investment in the Group's
marketplace platform and for general working capital.
The long-term opportunity in the Fashion, Beauty and Home
categories are forecast to be of A$13bn* by 2024. Notwithstanding
current trading conditions, the Board remains confident about the
Group's attractive positioning as an off-price specialist, with a
clear proposition built around STARLING, its proprietary technology
platform. The ambition remains to be the largest curated off-price
marketplace for branded fashion, beauty and home in ANZ taking
advantage of the continued strengthening ANZ off-price channel.
MySale has a small IT contract development team based in Saint
Petersberg, Russia. The immediate risk is the sanctions on the
banks and the ability to action payments. The Group has a business
continuity plan in place that will be activated as needed. The
Board does not expect this to have a material impact on Group
revenue, earnings and cashflow.
The Board remains committed to aligning the Group's ownership
structure with its operations in Australia.
Carl Jackson
Executive Chairman
31 March 2022
3 Customer Acquisition Costs (CAC) represents the cost of
acquiring new customers calculated as the total marketing spend
over total new customers during the relevant period
4 Margin ROAS definition " Margin Return on Advertising Spend
(MROAS) measures the return over a 3-day period (calculated as
total order value and delivery charges less cost of goods sold and
delivery costs) generated from sales where the last marketing
channel clicked on during that period was PPC, divided by the total
dollars of PPC marketing spend during that period
*Source: Frost & Sullivan, New Zealand Post, 2020 New
Zealand eCommerce Review Notes:
Online clothing and footwear sales in Australia are forecast to
increase to almost $10 billion (35.9% of total clothing and
footwear retail sales) by 2024. Frost & Sullivan, The Online
Retail Market, October 2021.
Online beauty and personal care (BPC) sales in Australia are
forecast to increase to $2.8 billion (22.0% of total BPC retail
sales) by 2024. Frost & Sullivan, The Online Retail Market,
October 2021
Online furniture and homewares retail sales in Australia are
forecast to increase to $1.1 billion by 2024. Frost & Sullivan,
The Online Retail Market, October 2021
New Zealand data is for the broader homewares, appliances and
electronics category and hence is not directly comparable with
other markets. Online luxury goods sales are forecast to be $1.3
billion (30% of total personal luxury goods sales) by 2024. (Frost
& Sullivan, The Online Retail Market, October 2021)
Financial review by the Chief Financial Officer
Financial Key Performance Indicators
The Group has continued to make good progress in scaling its
marketplace channel, whilst there was a 6.3% decline in statutory
revenue, the Gross Merchandise value (GMV)(5) increased by 36%
compared to prior period last year.
The reason being that products sold through our marketplace have
lower gross margins but high contribution to the bottom line as we
do not take any inventory risk or operational responsibility.
Reported statutory revenue from the sale of these products is
significantly lower. As we further scale the marketplace channel
this will result in a shift in the proportion of GMV and will
result in a decrease in statutory revenue as a percentage of GMV,
but an increase in gross margin.
Financial Performance
(A$m) H1 FY22 H1 FY21 Change
-------------------------------- --------- --------- -------
Gross Merchandise value (GMV) $86.7 $63.8 36.0%
Statutory Revenue $59.7 $63.8 -6.3%
Gross profit $25.3 $24.2 4.6%
Operating expenses $24.3 $21.4 13.3%
Underlying EBITDA $1.0 $2.7 -63.4%
Underlying EBITDA / Statutory
Revenue (%) 2% 4% -60.9%
Statutory Revenue and Gross Merchandise value (GMV)
(A$m) H1 FY22 H1 FY21 Change
------------------------------- --------- --------- -------
Statutory
Revenue $59.7 $63.8 -6.3%
Less: Commission
Revenue -$3.6 $0.0 NA
Add: Marketplace
Seller $23.4 $0.0 NA
Gross Merchandise value (GMV) $86.7 $63.8 36.0%
GMV increased by 36% to A$86.7m (H1 FY21: A$63.8m), reflecting
progress in scaling the Group's off-price marketplace platform,
which is expected to become the Group's largest sales channel. As a
result of the changing sales mix and growth of the marketplace
channel, statutory revenue declined by 6% to A$59.7m (H1 FY21:
A$63.8m)
Gross Margins
Gross profit was A$25.3m (H1 FY21: A$24.2m), with gross margins
improving to 42.3%, an increase of 410 basis points (H1 FY21:
37.9%). As we scale the marketplace channel this will result in a
shift in the proportion of GMV and will result in a decrease in
statutory revenue as a percentage of GMV, but an increase in gross
margin.
Operating Expenses(6)
Whilst it is not a statutory measure under IFRS, given the
material shift in sales mix from the growth of marketplace,
management considers Gross Merchandise Value (GMV) as key
performance indicators for assessing operating expenses of the
business.
The Group's fixed cost as percentage of GMV has reduced to 9%
(H1 FY21: 10%) and variable costs have reduced to 19% (H1 FY20:
24%). Reduction in variable cost primary came from reduction in
warehouse labour from 5.1% of GMV to 2.9% of GMV and marketing
efficiency from 7.8% to 7.3%.
(A$m) H1 FY22 H1 FY21
----------------------------------- --------- ---------
Fixed cost $8.1 $6.2
Variable cost $16.2 $15.2
Operating expenses $24.3 $21.4
Fixed cost / GMV
(%) 9.4% 9.7%
Variable cost / GMV
(%) 18.7% 23.9%
Operating expenses / GMV (%) 28.0% 33.6%
Fixed cost / statutory revenue
(%) 14% 10%
Variable cost / Statutory revenue
(%) 27% 24%
Operating expenses / Statutory
revenue (%) 41% 34%
(5) Gross merchandise value is total sales volume transacting
through the platform (retail and marketplace).
(6) Operating expenses is the different between gross profit and
underlying EBITDA
Balance Sheet, Cash and Working Capital
The Group's closing net cash balance was A$3.8m (H1 FY21:
A$15.8m) and the Group remains bank debt-free (although, post
period end is utilising an invoice financing facility of A$0.9m in
place. The main cash movements from the A$9.2m cash balance as of
30 June 2021 were Investment in additional own-stock inventory
(A$0.6m), increase in trade receivables (A$1.7m) and a decrease in
trade payables and contract liabilities as a result of change in
the sales mix (A$1.9m).
(A$m)
------------------- ------
Net Cash June
2021 $9.2
Underlying EBITDA $1.0
IFRS-16 (leases) -$0.9
Capex -$0.8
Inventory -$0.6
Trade receivable -$1.7
Payable & Others -$2.4
Net Cash Dec
2021 $3.8
-------------------- ------
Underlying EBITDA
As noted above, the Group manages its operations by looking at
the underlying EBITDA which excludes the impact of several one-off
and non-cash items of a non-trading nature. 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 in note 5 to the financial
statements and outlined below.
H1 FY22 H1 FY21 Change
------------------------------ --------- --------- -------
Reported EBITDA -$1.7 $2.7 -$4.4
Share based payments $0.1 $0.0
One-off costs & discontinued
activities $1.7 $0.4
Unrealised foreign exchange
loss $0.9 -$0.6
$2.7 -$0.2 $2.9
--------- --------- -------
Underlying EBITDA $1.0 $2.5 -$1.5
Included within one-off items are items of a non-trading,
non-recurring nature, including reorganisation costs, IPO adviser
fees, termination charges and other costs described above.
Unrealised foreign exchange loss relates to the revaluation of
foreign currency balance sheet items at period end. The significant
balance in the prior period is attributed to the Australian dollar,
the Group's functional and presentation currency, weakening against
the Group's key trading currencies during the period.
_____________________________
Winky Sarwana
Interim Chief Financial Officer
31 March 2022
MySale Group Plc
Statements of profit or loss and other comprehensive income
For the period ended 31 December 2021
Audited
Unaudited six months year ended
ended 31 December 30 June
Note 2021 2020 2021
A$'000 A$'000 A$'000
Revenue 3 59,725 63,763 117,893
Cost of sales (34,434) (39,587) (71,476)
Gross profit 3 25,291 24,176 46,417
-------- -------- --------
Other operating (losses)/gain, net 4 (894) 613 (1,120)
Interest income 10 78 78
Expenses
Selling and distribution expenses (18,214) (16,338) (31,955)
Administration expenses (10,448) (9,191) (18,267)
Impairment of receivables 7 (6) (204) (217)
Finance costs (279) (158) (299)
-------- -------- --------
Loss before income tax expense (4,540) (1,024) (5,363)
Income tax expense (336) (369) (3,085)
----- ----- -------
Loss after income tax expense for the period
attributable to the owners of MySale Group
Plc (4,876) (1,393) (8,448)
Other comprehensive income/(loss)
Items that may be reclassified subsequently
to profit or loss
Exchange differences on translation of foreign
operations 643 (1,282) 432
Other comprehensive income/(loss) for the
period, net of tax 643 (1,282) 432
------- ------- -------
Total comprehensive income for the period
attributable to the owners of MySale Group
Plc (4,233) (2,675) (8,016)
======= ======= =======
Cents Cents Cents
Basic earnings per share 16 (0.54) (0.16) (0.96)
Diluted earnings per share 16 (0.54) (0.16) (0.96)
The above statements of profit or loss and other comprehensive
income should be read in conjunction with the accompanying
notes
MySale Group Plc
Balance sheets
As at 31 December 2021
Audited
Unaudited six months year ended
ended 31 December 30 June
Note 2021 2020 2021
A$'000 A$'000 A$'000
Assets
Current assets
Cash and cash equivalents 6 3,825 15,840 9,210
Trade and other receivables 7 3,568 3,161 3,001
Inventories 6,115 2,622 5,518
Income tax receivable 4 - -
Other assets 1,190 586 1,695
Total current assets 14,702 22,209 19,424
------ ------ ------
Non-current assets
Property, plant and equipment 685 990 764
Right-of-use assets 8 2,693 4,601 3,487
Intangibles 9 25,232 28,201 26,370
Other assets 1,705 1,107 1,777
Deferred tax 9 3,029 322
Total non-current assets 30,324 37,928 32,720
------ ------ ------
Total assets 45,026 60,137 52,144
------ ------ ------
Liabilities
Current liabilities
Trade and other payables 10 15,403 16,840 14,304
Contract liabilities 11 4,026 6,421 7,047
Lease liabilities 1,596 1,609 1,593
Income tax payable - 16 -
Employee benefits 1,125 1,279 1,116
Provisions 1,037 1,314 1,089
Total current liabilities 23,187 27,479 25,149
------ ------ ------
Non-current liabilities
Lease liabilities 2,794 4,242 3,705
Employee benefits 520 594 584
Total non-current liabilities 3,314 4,836 4,289
------ ------ ------
Total liabilities 26,501 32,315 29,438
------ ------ ------
Net assets 18,525 27,822 22,706
====== ====== ======
Equity
Stated capital 12 338,215 338,215 338,215
Other reserves (123,655) (126,289) (124,350)
Accumulated losses (196,015) (184,084) (191,139)
Equity attributable to the owners of MySale
Group Plc 18,545 27,842 22,726
Non-controlling interest (20) (20) (20)
Total equity 18,525 27,822 22,706
========= ========= =========
The interim financial statements of MySale Group Plc (company number 115584
(Jersey)) were approved by the Board of Directors and authorised for issue
on XX March 2022. They were signed on its behalf by:
___________________________ ___________________________
Carl Jackson Charles Butler
Chairman Senior Independent Director
31 March 2022
MySale Group Plc
Statements of changes in equity
For the period ended 31 December 2021
Stated Other Accumulated Non-controlling
Total
capital reserves losses interest equity
Unaudited six
months ended
31
December A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1
July 2020 328,971 (124,979) (182,691) (20) 21,281
Loss after
income tax
expense
for the period - - (1,393) - (1,393)
Other
comprehensive
income for
the period,
net of tax - (1,282) - - (1,282)
Total
comprehensive
income for
the period - (1,282) (1,393) - (2,675)
Transactions
with owners in
their capacity
as owners:
Contributions
of equity, net
of transaction
costs 9,244 - - - 9,244
Share-based
payments - (28) - - (28)
Balance at 31
December 2020 338,215 (126,289) (184,084) (20) 27,822
======= ========= =========== =============== ===========
Stated Other Accumulated Non-controlling
Total
capital reserves losses interest equity
Unaudited six
months ended
31
December A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1
July 2021 338,215 (124,350) (191,139) (20) 22,706
Loss after
income tax
expense
for the period - - (4,876) - (4,876)
Other
comprehensive
income for
the period,
net of tax - 643 - - 643
Total
comprehensive
income/(loss)
for the period - 643 (4,876) - (4,233)
Transactions
with owners in
their capacity
as owners:
Share-based
payments - 52 - - 52
Balance at 31
December 2021 338,215 (123,655) (196,015) (20) 18,525
======= ========= =========== =============== ===========
MySale Group Plc
Statements of changes in equity
For the period ended 31 December 2021
Stated Other Accumulated Non-controlling
Total
capital reserves losses interest equity
Audited year
ended 30 June A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1
July 2020 328,971 (124,979) (182,691) (20) 21,281
Loss after
income tax
expense
for the period - - (8,448) - (8,448)
Other
comprehensive
income for
the period,
net of tax - 432 - - 432
Total
comprehensive
income/(loss)
for the period - 432 (8,448) - (8,016)
Transactions
with owners in
their capacity
as owners:
Contributions
of equity, net
of transaction
costs 9,244 - - - 9,244
Share-based
payments - 197 - - 197
Balance at 30
June 2021 338,215 (124,350) (191,139) (20) 22,706
======= ========= =========== =============== ===========
MySale Group Plc
Statements of cash flows
For the period ended 31 December 2021
Audited
Unaudited six months year ended
ended 31 December 30 June
Note 2021 2020 2021
A$'000 A$'000 A$'000
Cash flows from operating activities
Loss before income tax expense for the period (4,540) (1,024) (5,363)
Adjustments for:
Depreciation and amortisation 2,739 3,626 7,007
Net loss on disposal of property, plant and
equipment 19 - 155
Net loss on disposal of intangibles - - 4
Share-based payments 52 - 197
Interest income (10) (78) (78)
Interest expense 279 - 299
(1,461) 2,524 2,221
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables (425) 946 1,106
Decrease/(increase) in inventories (597) 139 (2,757)
Decrease/(increase) in other operating assets 431 (226) (1,194)
Increase/(decrease) in trade and other payables 1,774 (3,326) (4,311)
Increase/(decrease) in contract liabilities (3,021) 235 861
Decrease in other provisions (161) (685) (88)
(3,460) (393) (4,162)
Interest received 10 78 78
Interest paid (279) - (299)
Net cash used in operating activities (3,729) (315) (4,383)
------- ------- -------
Cash flows from investing activities
Payments for property, plant and equipment (102) - (135)
Payments for intangibles 9 (659) (672) (1,231)
Proceeds from release of security deposits - 522 -
Net cash used in investing activities (761) (150) (1,366)
----- ----- -------
Cash flows from financing activities
Proceeds from issue of shares, net of transactions
costs - 9,244 9,244
Repayments of lease liabilities (895) (778) (1,007)
Net cash from/(used in) financing activities (895) 8,466 8,237
----- ----- -------
Net increase/(decrease) in cash and cash
equivalents (5,385) 8,001 2,488
Cash and cash equivalents at the beginning
of the financial period 9,210 6,660 6,660
Effects of exchange rate changes on cash - 1,179 62
Cash and cash equivalents at the end of the
financial period 6 3,825 15,840 9,210
======= ====== =====
MySale Group Plc
Notes to the financial statements
31 December 2021
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 dollars.
The principal business of the Group is the operation 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
(Alternative Investment Market), a sub-market of the London Stock Exchange.
The Company is incorporated and registered under the Companies (Jersey)
Law 1991. The Company is domiciled in Australia.
The registered office of the Company is Ogier House, The Esplanade, 44 Esplanade
Street, St.Helier, JE4 9WG, Jersey and principal place of business is at
3/120 Old Pittwater Road, Brookvale, NSW 2100, Australia.
The financial statements were authorised for issue, in accordance with a
resolution of Directors, on 31 March 2022.
Note 2. Significant accounting policies
These financial statements for the interim half-year reporting period ended
31 December 2021 have been prepared in accordance with International Accounting
Standards IAS 34 'Interim Financial Reporting'.
These interim financial statements do not include all the notes of the type
normally included in annual financial statements. Accordingly, these financial
statements are to be read in conjunction with the annual report for the
year ended 30 June 2020 and any public announcements made by the Company
during the interim reporting period.
The principal accounting policies adopted in the preparation of the financial
statements are set out below. These policies have been consistently applied
to all the periods presented, except for the policies stated below.
Going concern
This interim report has been prepared on the assumption that the business
is a going concern. In reaching this assessment, the Directors have considered
a period extending at least 12 months from the date of approval of this
half-yearly financial report. This assessment takes account of the additional
cash resource following the recent completion of the $2.3m raise through
the issue of the Loan Notes and has considered a number of scenarios, taking
account the possible impact of current trading in relation to the revenue
forecast for the next 12 months. The Board has also considered that a number
of unexpected events could occur which impact the cash position and that
there is no guarantee that these internally generated forecasts will be
realised.
The Directors have also considered a downside case, assuming a further 10%
reduction in revenue against current Board forecasts during the next 12
months. Although it is difficult to predict how prolonged the impact of
COVID-19, in particular the Omicron variant, and remaining restrictions
will impact on the Group's markets for the remainder of calendar 2022 and
beyond, these downside scenarios are considered unlikely.
In addition, there are a number of actions which are being implemented to
help mitigate the impact on cash outflows, including but not limited to,
scaling the Order After Sale and Marketplace channels which have a negative
working capital profile, decreasing the amount of Own Stock inventory, further
cost reductions, closing OURPAY the Groups proprietary buy now pay later
service and further factoring and supply chain finance.
Under the scenarios modelled there would be adequate cash available to the
Group up until April 2023
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and
Interpretations issued by the International Accounting Standards Board that
are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not
yet mandatory have not been early adopted.
MySale Group Plc
Notes to the financial statements
31 December 2021
Note 3. Operating segments
Identification of reportable operating segments
The Group's operating segments are determined based on the internal reports
that are reviewed and used by the Board of Directors (being the 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 country's 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.
Operating segment information
Australia
and South-East
New Zealand Asia Total
Unaudited six months ended 31 December - 2021 A$'000 A$'000 A$'000
Revenue
Sales to external customers transferred at a
point in time 53,936 2,189 56,125
Commission revenue recognised at a point in
time 3,601 - 3,601
Total revenue 57,536 2,189 59,725
----------- ---------- --------
Gross profit 25,144 147 25,291
----------- ----------
Other income (894)
Selling and distribution expenses (18,214)
Administration expenses (10,448)
Finance income 10
Finance costs (279)
Impairment of receivables (6)
Loss before income tax expense (4,540)
Income tax expense (336)
--------
Loss after income tax expense (4,876)
--------
Australia
and South-East
New Zealand Asia Total
Unaudited six months ended 31 December - 2020 A$'000 A$'000 A$'000
Revenue
Sales to external customers transferred at a
point in time 60,387 3,376 63,763
Total revenue 60,387 3,376 63,763
----------- ---------- --------
Gross profit 22,647 1,529 24,176
----------- ----------
Other operating gain, net 613
Selling and distribution expenses (16,338)
Administration expenses (9,191)
Finance income 78
Finance costs (158)
Impairment of receivables (204)
Loss before income tax expense (1,024)
Income tax expense (369)
--------
Loss after income tax expense (1,393)
--------
MySale Group Plc
Notes to the financial statements
31 December 2021
Australia
and New South-East
Zealand Asia Total
Audited year ended 30 June 2021 A$'000 A$'000 A$'000
Revenue
Sales to external customers transferred at a
point in time 109,726 7,141 116,867
Commission revenue recognised at a point in time 1,026 - 1,026
Total revenue 110,752 7,141 117,893
Gross profit 43,580 2,837 46,417
--------- ----------
Other (loss)/gain, net (1,120)
Selling and distribution expenses (31,955)
Administration expenses (18,267)
Finance income 78
Finance costs (299)
Impairment of receivables (217)
--------
Loss before income tax expense (5,363)
Income tax expense (3,085)
--------
Loss after income tax expense (8,448)
--------
Note 4. Other operating (losses)/gain, net
Audited
Unaudited six months year ended
ended 31 December 30 June
2021 2020 2021
A$'000 A$'000 A$'000
Net foreign exchange (losses)/gains (921) 661 (921)
Net loss on disposal of property, plant and
equipment (9) (65) (157)
Other income/(losses) 36 17 (42)
Other operating (losses)/gain, net (894) 613 (1,120)
========== ========== ===========
MySale Group Plc
Notes to the financial statements
31 December 2021
Note 5. EBITDA reconciliation (earnings before interest, taxation, depreciation
and amortisation)
Audited
Unaudited six months year ended
ended 31 December 30 June
2021 2020 2021
A$'000 A$'000 A$'000
Loss before income tax includes the
following
specific expenses:
EBITDA reconciliation
Loss before income tax expense (4,540) (1,024) (5,363)
Less: Interest income (10) (78) (78)
Add: Interest expense 122 158 299
Add: Depreciation and amortisation 2,739 3,626 7,007
EBITDA (1,689) 2,682 1,865
Underlying EBITDA represents EBITDA adjusted
for certain items, as outlined below.
Underlying EBITDA reconciliation
EBITDA (1,689) 2,682 1,865
Impairment of receivables 6 204 217
Share-based payments 52 28 197
Reorganisation costs* 121 283 652
One-off costs of non-trading, non-recurring
nature
including ASX listing expenses 1,593 102 357
Unrealised foreign exchange movements 922 (554) 904
Underlying EBITDA 1,005 2,745 4,192
---------- ---------- -----------
* Costs in relation to the closure of overseas operations.
Note 6. Current assets - cash and cash equivalents
Audited
Unaudited six months year ended
ended 31 December 30 June
2021 2020 2021
A$'000 A$'000 A$'000
Cash at bank 3,715 15,730 9,100
Bank deposits at call 110 110 110
3,825 15,840 9,210
========== ========== ===========
MySale Group Plc
Notes to the financial statements
31 December 2021
Note 7. Current assets - trade and other receivables
Audited
Unaudited six months year ended
ended 31 December 30 June
2021 2020 2021
A$'000 A$'000 A$'000
Trade receivables 3,486 2,763 1,783
Less: Allowance for expected credit losses (60) (124) (85)
3,426 2,639 1,698
Other receivables 142 - -
Sales tax receivable - 522 1,303
3,568 3,161 3,001
========== ========== ===========
Trade receivables include uncleared cash receipts due from online customers
which amounted to A$2,059,000 (30 June 2021: A$1,713,000 and 31 December
2020: A$1,858,000).
Allowance for expected credit losses
The Group has recognised a loss of A$6,000 (30 June 2021: A$217,000 and
31 December 2020: A$204,000) in profit or loss in respect of impairment
of receivables for the half-year ended 31 December 2021.
Note 8. Non-current assets - right-of-use assets
Audited
Unaudited six months year ended
ended 31 December 30 June
2021 2020 2021
A$'000 A$'000 A$'000
Property and equipment - right-of-use 6,180 5,362 6,180
Less: Accumulated depreciation (3,487) (761) (2,693)
2,693 4,601 3,487
=========== ========= ===========
Reconciliations
Reconciliations of the written down values at the beginning and end of the
current financial period are set out below:
Property Equipment Total
Unaudited six months ended 31 December A$'000 A$'000 A$'000
Balance at 1 July 2021 3,462 25 3,487
Depreciation expense (787) (7) (794)
Balance at 31 December 2021 2,675 18 2,693
======== ========= ======
MySale Group Plc
Notes to the financial statements
31 December 2021
Note 9. Non-current assets - intangibles
Audited
Unaudited six months year ended
ended 31 December 30 June
2021 2020 2021
A$'000 A$'000 A$'000
Goodwill - at cost 21,239 21,206 21,233
Customer relationships - at cost 3,926 3,850 3,906
Less: Accumulated amortisation (3,926) (3,718) (3,906)
- 132 -
Software - at cost 29,839 28,654 29,189
Less: Accumulated amortisation (25,929) (22,061) (24,203)
3,910 6,593 4,986
ERP system 4,885 4,883 4,885
Less: Accumulated amortisation (4,802) (4,613) (4,734)
83 270 151
25,232 28,201 26,370
========== ========== ===========
Reconciliations
Reconciliations of the written down values at the beginning and end of the
current financial period are set out below:
Customer ERP
Goodwill relationships Software system Total
Unaudited six months
ended 31
December A$'000 A$'000 A$'000 A$'000 A$'000
Balance at 1 July 2021 21,233 - 4,986 151 26,370
Additions - - 654 - 654
Exchange differences 6 - - - 6
Amortisation - - (1,730) (68) (1,798)
Balance at 31 December
2021 21,239 - 3,910 83 25,232
======== ============= ======== ====== =======
Note 10. Current liabilities - trade and other payables
Audited
Unaudited six months year ended
ended 31 December 30 June
2021 2020 2021
A$'000 A$'000 A$'000
Trade payables 8,169 11,487 8,380
Other payables and accruals 4,101 2,800 3,541
Sales tax payable 3,133 2,553 2,383
15,403 16,840 14,304
========== ========== ===========
MySale Group Plc
Notes to the financial statements
31 December 2021
Note 11. Current liabilities - contract liabilities
Audited
Unaudited six months year ended
ended 31 December 30 June
2021 2020 2021
A$'000 A$'000 A$'000
Contract liabilities 4,026 6,421 7,047
========== ========== ===========
Unsatisfied performance obligations
The aggregate amount of the transaction price allocated to the performance
obligations that are unsatisfied at the end of the reporting period was
A$4,026,000 as at 31 December 2021 (A$6,421,000 as at 31 December 2020 and
A$7,047,000 as at 30 June 2021) and is expected to be recognised as revenue
in future periods as follows:
Audited
Unaudited six months year ended
ended 31 December 30 June
2021 2020 2021
A$'000 A$'000 A$'000
Within six months 4,026 6,421 7,047
========== ========== ===========
Contract liabilities represent the Group's obligation to transfer goods
or services to a customer and are recognised when a customer pays consideration,
or when the Group recognises a receivable to reflect its unconditional right
to consideration (whichever is earlier) before the Group has transferred
the goods or services to the customer.
Note 12. Equity - stated capital
On 28 May 2014 the company converted ordinary shares of GBP1 nominal value
to ordinary shares of GBPnil nominal value, in a share-for-share exchange.
In accordance with Companies (Jersey) Law 1991 Paragraph 39A, these issued
shares have been recognised and maintained in a stated capital account.
Unaudited Unaudited
Unaudited six six
Unaudited six months months months Audited
six months ended Audited ended ended year
ended 31 Decemb year ended 31 31 ended
31 December er 30 June December December 30 June
2021 2020 2021 2021 2020 2021
Shares Shares Shares A$'000 A$'000 A$'000
Ordinary
shares
GBPnil
each -
fully
paid 902,465,982 902,465,982 902,465,982 338,215 338,215 338,215
Less:
Treasury
shares (25,533,118) (25,533,118) (25,533,118) - - -
876,932,864 876,932,864 876,932,864 338,215 338,215 338,215
============ ============ ============ ========= ========= =======
Authorised stated capital
959,406,638 (31 December 2020: 959,406,638 and 30 June 2021: 959,406,638)
ordinary shares of GBPnil each.
Ordinary shares
Ordinary shares entitle the holder to participate in any dividends declared
and any proceeds attributable to shareholders should the Company be wound
up in proportions that consider both the number of shares held and the extent
to which those shares are paid up.
MySale Group Plc
Notes to the financial statements
31 December 2021
Treasury shares
The Company has two employee share plans; (i) the Executive Incentive Plan
('EIP') and (i) 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 either 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 or
certain share price hurdles. Share options and loan shares have been granted
over the ordinary share capital of the Company and are accounted for as
share-based payments. That is, the fair value of the accounting expense
in relation to these options and loan shares are recognised over the vesting
period.
Vested and unvested shares under the plans are recorded as treasury shares
representing a deduction against issued capital. When the loans are settled
or the options are exercised, the treasury shares are reclassified as ordinary
shares and the equity will increase accordingly. Treasury shares have no
dividend, or voting, rights.
Note 13. Equity - dividends
There were no dividends paid, recommended or declared during the current
or previous financial period.
Note 14. Contingent liabilities
There was no contingent liabilities as at 31 December 2021, 31 December
2020 and 30 June 2021.
Note 15. Related party transactions
Parent entity
MySale Group Plc is the parent company of the Group.
Transactions with related parties
There were no transactions with related parties during the current and previous
financial period.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties
at the current and previous reporting date.
Loans to/from related parties
Ultimate Controlling party
The directors consider that the Group has no ultimate controlling party.
Note 16. Earnings per share
Unaudited Unaudited
six months six months Audited
ended 31 ended 31 year ended
December December 30 June
2021 2020 2021
A$000 A$000 A$000
Loss after income tax attributable to the
owners
of MySale Group Plc (4,876) (1,393) (8,448)
Underlying EBITDA attributable to the
owners
of MySale Group Plc 1,005 2,745 4,192
----------- ----------- -----------
Number Number Number
Weighted average number of ordinary shares
used
in calculating basic earnings per share 902,465,982 856,147,977 879,350,126
Weighted average number of ordinary shares
used
in calculating diluted earnings per share 902,465,982 856,147,977 879,350,126
MySale Group Plc
Notes to the financial statements
31 December 2021 Cents Cents Cents
Basic earnings per share (0.54) (0.16) (0.96)
Diluted earnings per share (0.54) (0.16) (0.96)
Underlying earnings per share 0.11 0.32 0.48
30 June 2021: 59,122,964 and 31 December 2020: 65,985,501) employee long-term
incentives have been excluded from the diluted earnings calculation as they
are anti-dilutive for the period.
Note 17. Events after the reporting period
The consequences of the Coronavirus (COVID-19) pandemic are continuing to
be felt around the world, and its impact on the consolidated entity, if
any, has been reflected in its published results to date. Whilst it would
appear that control measures and related government policies, including
the roll out of the vaccine, have started to mitigate the risks caused by
COVID-19, it is not possible at this time to state that the pandemic will
not subsequently impact the consolidated entity's operations going forward.
The consolidated entity now has experience in the swift implementation of
business continuation processes should future lockdowns of the population
occur, and these processes continue to evolve to minimise any operational
disruption. Management continues to monitor the situation both locally and
internationally.
The higher-than-expected inventory levels have impacted working capital.
Management have reduced the inventory balances and have, where possible,
cancelled or delayed future orders. The Group has implemented several initiatives
to support its working capital and is also considering strategic financing
options.
No other matter or circumstance has arisen since 31 December 2021 that has
significantly affected, or may significantly affect the Group's operations,
the results of those operations, or the Group's state of affairs in future
financial years.
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