MySale update delivers bad news but company says it's on right track
Cocosa owner MySale said on Friday that it saw “challenging trading in the first half” and anticipates an underlying EBITDA loss for the period.
It said the six months to December 31 were mainly hurt by the market disruption caused by changes to Australian GST regulation, together with product mix and inventory issues. Revenue has also been impacted by the planned reduction in the group's offline activities during FY19.
The company has offices in the UK, Australia and US, is listed in London and operates flash sales sites across Australia/new Zealand, Asia and Britain.
It has already taken action to accelerate its cost saving programme from those wide-ranging operations with increased technology platform efficiencies and rationalisation. And it said that an “improved product mix and increased local sourcing have also been put in place to improve gross profit margins.”
In the six moths, group revenue fell 17% to A$126 million and online revenue fell 13% to A$120 million. Gross profit was down an even bigger 35% to A$29.5 million and the gross margin dropped to 23.4% from 30.2% a year earlier. Active customer numbers fell 7% to 0.9 million but at least customer average order value (AOV) and order frequency, “remained stable”.
The underlying EBITDA loss will be around A$5 million, much worse that the A$5.5 million profit in the prior year period.
Was there any good news? Well, the group's cash balances grew ahead of expectations and the board said it’s “confident the group's action plans will deliver improved performance in the second half of the financial year and that the full-year outcome will be in line with market expectations.”
CEO Carl Jackson said: ‘"Whilst performance during the first half of the year has been disappointing, we have taken immediate action to address the issues. Our previous plans to streamline and automate the business have been accelerated and these actions are already delivering results. The changes to product strategy are materially under way and will be completed in the second half.”
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